IVC Industries Suffers 2Q Loss

IVC Industries Suffers 2Q Loss

FREEHOLD, N.J.--IVC Industries Inc.(NASDAQ:IVCO) recorded a net loss on declined sales for its second quarter ended Jan. 31. Revenues slid 34 percent to $19.6 million from $29.6 million sold in the same quarter the year prior. Gross margin fell by seven percent, while operating expenses decreased by 36.9 percent (approximately one percent of sales) from comparable expenses posted in the equivalent period last year. On the bottom line, the company recorded a net loss of $.53 million or $.25 per share, compared to a $.46 million or $.22 per share net gain earned in the same quarter a year ago.
Management reported that the decrease in net sales was primarily due to a decline in private label and branded sales to existing customers, which resulted from the softness in the overall market for vitamins, herbs and supplements. It also cited increased price and product competition as factors in the decline. As for margins, the company noted that costs of sales increased by six percent as a percentage of revenues, compared to the prior year's period. This resulted from higher overhead costs, less than ideal utilization of capacity and a different product mix. Meanwhile, the decrease in operating expenses was attributed to lower salary costs due to staffing cuts. Management also pointed to lower promotional, commission and distribution costs due to reduced sales levels.