Option-NFA Inc., manufacturer of the Option Snowboard and NFA Outerwear brands, saw revenues for the second quarter decrease 46% to CA$745,607 ($664,000) from CA$1.4 million ($1.1 mm) for the same quarter last year. Management attributed the decrease to an inability to produce and ship softgoods, specifically outerwear, early. The company did note, that despite the sharp downturn in Q2 revenues, the year to date losses were slightly improved over the previous years results.
Gross margin on all sales has dropped to 15% in Q2 2006 from 25% in Q2 2005. Year-to-date gross margin is 25% in 2006 and 17% in 2005. The company expects margins will continue to show signs of improvement as sales year to date have consisted mainly of lower margin distributor and OEM customers.
Tighter expense controls reduced overhead by CA$28,410 ($25,000) in the second quarter, CA$69,080 ($60,600) year-to-date. All overhead items, with the exception of salaries and professional fees, were improved from last year. Both salaries and professional fees were slightly increased and were the direct result of severance payments owing to long term employees.
EBITDA for the first half was CA$686,489 ($603,000), down from CA$806,187 ($653,000) last year, while the net loss slimmed to CA$792,379 ($696,000) from CA$897,110 ($727,000) in 2005.
The company reported a fully diluted loss per share of CA4 cents (3.5 cents) in Q2 2006, double the loss of CA2 cents (1.6 cents) in Q2 2005.