John Tulin, Chairman of the Board and Chief Executive Officer of SWANK INC reported net sales and operating results for the Company's third quarter and nine months ended September 30, 2007.
Income before income tax for the quarter ended September 30, 2007 decreased to $1,528,000 from $3,154,000, and for the nine months ended September 30, 2007 decreased to $2,702,000 from $4,179,000. Net income for the quarter ended September 30, 2007 was $830,000 compared to $3,095,000, and for the nine months ended September 30, 2007 was $1,494,000 compared to $4,095,000, in both cases, compared to the corresponding periods last year.
The decrease in net income and income before income tax for the third quarter was mainly due to a 5.7% reduction in net sales as well as lower gross margins due to a shift in product mix. The decrease in net sales during the third quarter combined with the change in sales mix offset some of the favorable effect of higher net sales during the first half of the year as compared to the prior year.
Net income for the quarter and nine-month periods ended September 30, 2007 reflect income tax provisions of $698,000 and $1,208,000, respectively, compared to $59,000 and $84,000 in each of the corresponding periods last year. We recorded a minimal tax provision on our operating income before taxes during the first three quarters of fiscal 2006 reflecting the utilization of net operating loss carryforwards to offset then current tax liability.
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