Swank Inc reports lower net income for Q4 2007

27 Feb '08

3 min read

John Tulin, Chairman and Chief Executive Officer of Swank Inc reported net sales and net income for the Company's quarter and year ended December 31, 2007.

Net income for the quarter ending December 31, 2007 was $3,453,000 compared to net income of $9,894,000 for the corresponding quarter last year. For the 12-month period ending December 31, 2007, net income was $4,947,000 compared to net income of $13,989,000 last year. Income before income taxes for the Company's fourth quarter was $5,827,000 compared to $5,607,000 last year and for the 12-month period was $8,529,000 compared to $9,786,000 in 2006.

During the quarter ended December 31, 2006, the Company recorded a non-recurring income tax benefit of approximately $5,000,000 resulting from the reversal of a valuation allowance which had been recorded in a previous year against the Company's net deferred tax asset. In addition, the Company recorded no income tax provision during most of 2006 due to net operating loss carryforwards that were not fully utilized until late in the year.

The Company recorded an income tax provision throughout 2007 at approximately statutory rates in the amount of $3,582,000. The difference between the income tax provision recorded during the 12 months ended December 31, 2007 and the income tax benefit recorded during the prior year accounted for $7,785,000 of the overall decrease in net income for 2007.

Commenting on the results for the quarter and fiscal year, John Tulin, Chairman and Chief Executive Officer, said, "We are particularly pleased with our fourth quarter results, which we achieved despite an increasingly difficult economy that resulted in a challenging holiday season for most retailers compared to last year. The difficult retail environment took a toll on margin, however, as we aggressively sought to maintain market share during the second half of 2007.

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