Despite a 9.7 percent increase in sales, Polk Audio Inc. earnings dropped 76.1 percent during its fiscal second quarter because of delays in introducing new products.
"Sales went up, but not as much as we planned them to because we were late on a couple of new products," said George M. Klopfer, president and chief executive officer of the Baltimore-based maker of high-quality stereo speakers. But the drop should be made up by increased sales in October, he said.
Polk, which manufactures most of its products in Tijuana, Mexico, saw its sales increase to $11.3 million during the 13 weeks that ended Oct. 1, compared with revenues of $10.3 million for the same period a year ago. But net income slid to $120,018, or 7 cents a share, compared with $501,540, or 30 cents a share, during the previous second quarter. The delays, which affected new bookshelf speakers, home speaker systems, and automotive products, were caused by a variety of factors, including the company's efforts to develop a new line of sophisticated speakers called Eoson, Mr. Klopfer said.
"Minor latenesses sort of accumulated on you and all of a sudden you find yourself a couple weeks behind the eight ball," he said. "None of this is particularly catastrophic, it just louses up your quarterly earnings."