Smith Corona reported a loss and lower sales for its fiscal year, but was profitable for the fourth quarter.
For the year ending June 30, the company reported a net loss of $15.9 million on sales of $43.7 million compared with a loss of $6.6 million on sales of $58.9 million for the same period last year.
Results this year included nonrecurring restructuring expense of $1.3 million, while last year's results included gains of $3.9 million from the sale of manufacturing operations and $1.2 million from favorable claims resolution, the company said.
Sales declines in typewriters and related supplies were partially offset by newly sourced product sales of $6 million for the year compared with new product sales of $3.8 million last year.
Expenses improved during 1999 to 42.9% of sales from 44.8% of sales last year. Gross margins for fiscal 1999 were 2.7% of sales compared to 23% last year, due to clearance sales for telephone and fax products, as well as inventory-related writedowns and manufacturing contract penalties, the company said.
During the fourth quarter Smith Corona reported net income of $600,000 on sales of $7.9 million compared with a loss of $4.4 million on sales of $12 million last year.
The fourth quarter results reflect an approximate 50% reduction in expenses, as well as $300,000 gain from the sale of the former headquarters and tax benefits of $2.6 million from the final liquidation of one of the company's international subsidiaries. Gross margins were 15.6% of sales versus 8.4% for the same period last year.
"We are extremely pleased with our fourth quarter results, which are indicative of the many improvements that have taken place at Smith Corona this year,' said John Bermingham, president/CEO. "As expected, the fourth quarter shows the benefits of the company's year-long restructuring program and return to our core business."
Bermingham said he is pleased with a new licensing agreement with Office Depot which, "will bring increased market exposure of the Smith Corona name and new product sales that will add royalty dollars direct to the bottom line in calendar year 2000."
Smith Corona is in the process of introducing a new product line of inkjet replacement cartridges, called Inkjet Solutions, and an expanded line of headsets called TelEspirit.