Lacrosse posted a disappointing first quarter with sales falling 20.3% to $18.9 million compared to $23.7 million last year. The decline was due in large part to weaker military orders. Sales for the first quarter of 2004 included $4.3 million from General Services Administration delivery orders to the U.S. Military and $1.7 million from the discontinued PVC boot line. Taking military contracts and the discontinued PVC business out of the picture, Lacrosse actually posted a sales increase of 6.8% for the quarter.
Sales to the outdoor market were $6.9 million for the first quarter of 2005, up 4% from $6.6 million for the same period in 2004. Lacrosses work division took the brunt of the military impact; sales were $12.0 million for the first quarter, compared to $17.1 million for the same period in 2004.
Gross margin was 37.1% of net sales for the first quarter of 2005, up 660 basis points from 30.5% in 2004. Management stated that this was due to the companys continued focus on higher margin business and the strategic exit from the PVC business. Operating expenses jumped 890 basis points to 34.2% of sales, compared to 25.3% last year.
Lacrosse was also hit with a considerable increase in their tax rate. This brought net income down to $300,000 compared to $1.1 million last year. The reduction in net income also reflects the margins related to the GSA delivery orders in Q1 last year. Lacrosse reported diluted EPS of 5 cents per common share compared to 18 cents per common share in 2004.
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