With a 45.5 percent jump in sales, Polk Audio Inc. cut its traditional fiscal first-quarter loss by more than two-thirds, positioning the company for increased profits for the rest of the year.
"We're delighted with the sales growth and we think that bodes quite well for the year that we're now starting on," said George M. Klopfer, president and chief executive of the Baltimore company that manufactures high-quality stereo speakers.
During the first quarter that ended July 2, Polk saw sales increase to $9.7 million compared with $6.7 million during the same period a year ago. The company's net loss declined to $104,802, or 6 cents a share, less than a third of the loss of $340,255, or 21 cents a share, the company had in the previous first quarter.
The company's stock fell 25 cents a share yesterday to close at $11.
The spring and summer months of the company's first quarter are traditionally a slow period for speaker sales, Mr. Klopfer said. "We're in a very seasonal business," he said.
Because the sales were up so strongly in the first quarter, Mr. Klopfer said he was optimistic about its fall and winter business.
While the company saw sales increases for all its products, the "star performers" were automobile speakers and exports, Mr. Klopfer said.
He said profits were also improved by a few percentage points by the company's decision in March to move most of its remaining manufacturing production from Baltimore to its operations in Tijuana, Mexico, and San Diego to cut labor costs.
Sales should also be stimulated early next year when Polk introduces its new Eoson speakers, which are designed by Arnie Nudell of Genesis Technologies. Aimed at the home theater market, the speakers will be sold exclusively through Best Buy Co. Inc. in the United States.