Third quarter brings optimism

Inventronics has published its 2003 third quarter financial results.

Inventronics has published its 2003 third quarter financial results.

Inventronics' sales of $3,457,000 in the third quarter of 2003 were consistent with the $3,531,000 achieved in the second quarter of this year.

Sales have remained at or near this level throughout 2003, providing further evidence that infrastructure spending in the industries the company serves has stabilised.

Third-quarter 2003 sales were $3,007,000 less than the $6,464,000 achieved in same period last year.

However, almost $1.7 million of this difference is the result of changed purchasing practises of a major customer, which reduces Inventronics' sales and expenses with no net income effect.

The balance of the change is a direct reflection of the reduced activity in the markets served by Inventronics across North America.

Inventronics has remained focused throughout 2003 on reducing fixed costs to align them with current sales levels.

Third-quarter fixed costs were reduced approximately $750,000 compared with the same period in 2002, bringing the nine-month total reduction in fixed costs to more than $1.9 million compared with last year.

This programme of targeted cost reductions will produce benefits for the company as sales begin to recover from their current low levels.

Evidence of strengthening sales in the latter part of the third quarter of 2003 has continued into the fourth quarter, as some of Inventronics' communications customers gradually increase their infrastructure spending after more than two years of very tight, industry-wide spending constraints.

In the third quarter, the company incurred $234,000 of one-time employee severance and other costs.

These reductions are expected to result in cost savings of more than $300,000 per quarter.

The one-time severance and other costs were responsible for half of the third-quarter net loss of $475,000 ($0.07 per share), which is an improvement over the loss of $2.5 million ($0.36 per share) for the same period in 2002.

The nine-month loss is $1.2 million ($0.18 per share) in 2003 compared with $4.4 million ($0.97 per share) in 2002.

"Inventronics' cost-reduction initiatives, in response to a prolonged downturn in telecommunications industry spending, have significantly reduced our losses and brought us closer to renewed profitability", said Dan Stearne, President and CEO.

"The additional cost reductions we undertook in the third quarter, when combined with our strengthening sales, are providing cause for optimism regarding the coming quarters".

Back to top