Euless, Texas - The loss of the Staples account was the primary reason revenue for the Consumer Products segment at Warrantech dropped 52 percent during its fiscal third quarter, reaching $4.3 million, compared with $9 million in the year-ago period. The decrease was partially offset by increased volume from new and existing customers.
The Consumer Products segment at the service contracts and after-market warranties company reported a pre-tax loss of $221,108 in the third quarter ended Dec. 31, compared with a $2 million profit in the third quarter of the previous year. This was due to the loss of the Staples account, partially offset by reductions in Selling, General and Administrative (SG&A) expenses.
SG&A overall at Warrantech declined 19 percent in the third quarter, down to $7.4 million, compared with $9.2 million in the same quarter in 2000. For the nine months, SG&A was $22.4 million, a decrease of 23 percent from the $29 million recorded in the year-ago period.
Warrantech, which announced a renewed five-year contract with Ultimate Electronics during the third quarter, reported that overall company revenue in the third quarter was $8.5 million, down from $11.7 million in the year-ago three months.
Net income reached $491,204 in the third quarter - Warrantech's seventh consecutive profitable quarter - compared with net income of $909,927 in the same period a year ago.
Overall revenue in the nine months was $27 million, down from $37 million in the prior-year nine months, while net income in the nine months reached $1.2 million, compared with $1.8 million in the same period in 2000.