Gross profit margin improves to 37.3% at Hirsch

12 Aug '08

4 min read

Revenue for the six-month period ended June 30, 2007, decreased 16.4% to $21.9 from revenue of $26.2 million for the six months ended June 30, 2007.

Gross Margin as a percentage of net revenue decreased to 33.3% for the three months ended June 30, 2008 as compared to 37.4% for the three months ended June 30, 2007. The Company's gross margin decreased by $1.2 million or 26.1% for the three months ended June 30, 2008 to $3.4 million compared to gross margin of $4.6 million June 30, 2007.

For the six-month period ended June 30, 2008, gross margin as a percentage of net revenue decreased to 33.6% compared to 37.8% for the comparable period in 2007. Gross margin decreased by $2.6 million or 26.3% to $7.3 million for the six-month period ended June 30, 2008, compared to gross margin of $9.9 million June 30, 2007.

Exchange rate fluctuations of the dollar against the yen continue to affect machine sales pricing competitiveness. These fluctuations have caused embroidery machine prices to change in U.S. dollars.

Operating Expenses for the three months ended June 30, 2008, were $4.4 million, an increase of $0.7 million as compared to the three months ended June 30, 2007 and for the six months ended June 30, 2008, were $9.1 million, an increase of $0.7 million from operating expenses of $8.4 million for the six months ended June 30, 2007.

The increase in operating expenses for the three and six months ended June 30, 2008 is a result of increased marketing and selling costs incurred in the current period as well as an offset to operating expenses for the three and six months ended June 30, 2007 due to the recognition of $450,000 in income associated with the settlement agreement with Sheridan Square.

Hirsch International Corp

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