Whitewing Labs Sales Drop, Losses Continue

Whitewing Labs Sales Drop, Losses Continue

MISSION HILLS,Calif.--Whitewing Labs Inc. (OTC BB:WWLI) reported decreased sales and continuing losses for its fourth quarter and fiscal year ended Dec. 31. For the quarter, revenues fell to $.20 million from $.35 million sold in the comparable quarter the year prior. Gross margin inched up two percent, but operating expenses rose by nearly 50 percent as a percentage of sales, compared to the same period in 1999. Net loss widened to $.20 million or $.07 per share from $.17 million or $.06 per share lost in the equivalent 1999 quarter.
For the year, net sales sank 48 percent to $.85 million from $1.7 million sold the previous year. Gross margin, at 82 percent of sales, was off one percent from 1999, while operating expenses rose by six percent of sales compared to the year prior. A net loss of $.42 million or $.14 per share was six percent better than $.71 million or $.24 per share it lost in 1999.
According to management, its customer base grew by 11 percent, but much of that growth consisted of single, one-time buyers. Thus, the decreased sales were the result of increased competition, according to the company. It added that it sold a good number of lower margin packages that combined its two top selling products. WWLI did make cost-saving adjustments to its operating expenses, cutting print advertising in favor of direct, in-house electronic marketing. Management noted that during fiscal 2000, it invested $.58 million from proceeds gained in its 1996 initial public offering on such direct response media, but those expenditures have not yet produced a comparable increase in revenues.