Tempe, Ariz. —Rockford Corp. posted a small profit amidst declining sales for the first quarter ended March 31.
Net income was $25,000, compared to a net loss of $100,000 for the comparable period in 2008.
Net sales decreased 21.6 percent to $14.5 million compared with $18.4 million for the year ago quarter due to lower sales of Rockford's mass-market Lightning Audio products, lower OEM sales and royalty revenue, lower sales to international customers, and higher discounts due to end-of-life sales.
However, Rockford said it is encouraged by recent reports from car stereo specialists. "Our specialty retailers in the U.S. reported seeing improved floor traffic during March and the specialty channel showed encouraging performance for the first quarter. Some of this performance may result from the removal of the Circuit City chain from the marketplace, but we also benefited …” said Rockford president Bill Jackson.
As a percent of net sales, gross margin for the quarter decreased to 30.6 percent compared with 34.5 percent for the year ago period. The shortfall was primarily due to lower royalty revenue and higher discounts as a percent of sales.
Operating expenses decreased 23.7 percent to $4.8 million compared with $6.2 million for the year ago quarter.
Jackson said the company’s recent restructuring is showing positive results and the company expects to benefit from it new Rockford line of car audio products which has begun shipping. He noted that the world economy however, is impacting Rockford’s retailer and distributors as well as OEM partners.
"Considering the challenging circumstances during the last six months, we believe we are beginning to see some signs of encouragement in the market and are working hard to take advantage of the opportunities these signs suggest," he said.