Tempe, Ariz. — Rockford reported a profit for the quarter, ended September 30 vs. the same time last year, but lower net sales.
Net income for the three months was $100,000 compared with a net loss of $3 million for the period last year. Net income for the nine month period was $0.2 million compared with a net loss of $4.1 million last year.
Net sales for the quarter decreased 11.9 percent to $18.7 million compared with $21.2 million for the same period in 2006. This was due primarily to lower OEM sales and lower sales in the mass retail and independent specialist distribution channels. These reductions were partially offset by higher royalty revenue, said Rockford.
Rockford president Bill Jackson said, “Our leaner, more efficient business model is allowing us to weather a difficult retail environment. Our expenses continue to be down and our margins are improving. The economics should continue to improve as we complete the transition to an out-sourced model in 2008.”
He added, "The car audio aftermarket business continues to be very tough. Our dealers reported slower retail traffic patterns for the third quarter. The impact was felt most strongly at the mass retail level, with some impact at the specialist level. Our royalty revenue continues to track upwards due to increased sales of Rockford Fosgate-branded OEM systems."
Gross margin for the quarter increased to 33.6 percent compared with 28.4 percent for the same period in 2006 due to higher royalty revenue, lower manufacturing variances and lower product costs.
Operating expenses for the quarter decreased 32.2 percent to $5.8 million.
Rockford also announced today that its board has appointed Jackson as one of Rockford's directors.