Merida Industry Co. Ltd, the Taiwanese company that manufactures bicycles for Specialized and many other U.S. and European brands, reported net revenue growth slowed by more than half in second quarter ended June 30.
The bicycle manufacturing company reported revenues reached TWD7.04 billion ($234 mm) during the period, up 4.0 percent from a year earlier. Revenues had grown 9.3 percent in the first quarter and grew an average of 12 percent a year over the five prior fiscal years.
Gross profit slipped 1.6 percent to TWD1.23 billion ($41 mm), or 17.5 percent of revenues, down from 18.5 a year earlier. However, Merida cut selling and administrative expenses 23.5 percent to just 6.5 percent of net revenues, down from 8.8 percent of net revenues in the second quarter of 2014. As a result, net operating income rose 18.4 percent to TWD845.1 million ($28 mm).
The company reported a one-time gain of TWD64.3 million ($2 mm) on the sale of assets, but that was wiped out by a TWD51.5 million loss from a joint venture that had reported TWD206.7 million in profits a year earlier. The negative impact of foreign currency exchange rates grew 11.8 percent compared with a year earlier to shave another TWD19.0 million off profits.
As a result, net income attributable to owners of the company fell 16.4 percent to TWD585.2 million ($19 mm).
Merida ended the period with total inventories valued at TWD396 billion ($13 mm), up 15.1 percent from a year earlier, and accounts receivables of TWD505.1 million ($17 mm), up 28 percent from a year earlier.
