Tempe, Ariz. – Rockford boosted net income and gross margins in
its fiscal third-quarter and year-to-date periods on a 0.7 percent decline in
third-quarter sales and a 12.3 percent rise in year-to-date sales.
Sales fell in the third quarter primarily because of declining
revenue from Japanese automakers whose supply chains were interrupted by the
Japan earthquake earlier this year, the company said.
“We feel good about our overall performance and market, [and] we
continue to be cautiously optimistic about the car audio market and our ability
to grow in it,” said president/CEO William Jackson.
Net
sales for the three months, ended Sept. 30, were down 0.7 percent to $14.2
million compared with the year-ago $14.3 million. Net sales for the first nine
months of the fiscal year rose 12.3 percent to $47.8 million compared with a
year-ago $42.6 million.
Net income for the third
quarter rose 71 percent to $1.2 million from a year-ago $700,000, and for the
nine-month period, net income rose 68 percent to $4.2 million from a year-ago
$2.5 million.
As percent
of net sales, gross margins increases during both periods, rising in the
quarter to 37.4 percent from a year-ago 36.9 percent. For the nine-month
period, gross margin increased to 38.5 percent from the year ago 37 percent.
Operating expenses for the three months fell to $4.1 million from
a year-ago $4.5 million but were up for the nine-month period to $14.1 million
from a year-ago $13.1 million.
The increase in operating expenses for the nine-month period was
due primarily to higher variable expenses, such as outbound freight and
commissions, resulting from higher sales as well as from increased sales and
promotional expenditures, the company said.
OEM revenues were down for the quarter as well as for the
nine-month period, with nine-month OEM revenues falling to $2 million compared
with a year-ago $2.2 million, because of interrupted production by Japanese
automaker customers. Nonetheless, said Jackson, the company’s “OEM business
remains stable, and our Japanese based partners have returned to normal
production after the earthquake and tsunami that reduced their operations in
the second quarter.”
All of the company’s distribution channels “remain stable and have
shown growth year to date,” Jackson added. The U.S. market “continues to be bumpy,”
he said. “Several dealers and distributors have reported improving retail
trends, but a lack of floor traffic and fears about general consumer confidence
are an ongoing concern.”
In other comments, Jackson said the company’s “overall supply
chain remains in good condition,” although Rockford is “experiencing some
difficulty with selective part outages, but not to the level of the past 12 to
18 months.”
Referring to the continued strengthening of the Chinese currency,
he said the rise “may cause additional cost pressures heading into 2012.”
In outlining the company’s aftermarket performance, Jackson said
Rockford Fosgate products “continue to do well in all of our channels” and that
its “core line of amplifiers and speakers is tracking up in all channels year
to date.” The company’s Lightning Audio and Brax/Helix brands “continue to gain
new dealers every month,” he added.
