Rockford Sales Down, While Income Gains
By Amy Gilroy -- TWICE, 8/4/2006
Tempe, Ariz. — Rockford reported a 16.5 percent net sales decline for the second quarter, ended June 30, due to a continued soft market in mobile audio, but net income improved.
Net sales decreased to $31.7 million, down from $37.9 million for the quarter in 2005, but net income improved to $0.9 million, compared with a net loss in quarter a year ago of $0.3 million.
Operating income improved by 133 percent to $1.4 million for the quarter, compared with operating income of $0.6 million in the year-ago period, said the company.
Rockford said gross margin in the second quarter increased to 32.8 percent, compared with 30.9 percent in the second quarter of 2005. The improvements were due to outsourcing, higher royalty revenue and a reduction in expenses, primarily due to cost control.
Rockford said its 3Sixty integration device “has been extremely well received” and that the company has trained over 650 installers and sales people on the product, according to CEO Gary Suttle.
He noted, “We continue to achieve results by focusing on the OEM market, as shown by our recent announcements of expanded relationships with Nissan and Mitsubishi, our new package for the Hummer by Predator Motorsports, and our new, exclusive worldwide relationship for marine audio systems with Malibu Boats. While this is an excellent development, the overall after-market and mass retail markets continue to trend downward."
For the second half, Suttle said Rockford expects gross margin, as a percentage of net sales, will continue to improve, but it expects lower sales due to the “persistent softness in the market, which will result in an operating loss in the second half of the year and for full-year 2006.”
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