Everlast Worldwide Inc.s second quarter net revenues were down 4.9% to $9.8 million from $10.3 million in the same period in 2005. Net licensing revenues for the quarter increased 3.4% to $3.0 million from $2.9 million last year. Revenues from sporting goods decreased 6.8% to $6.8 million from $7.3 million in 2005. Management attributed the sporting goods decline to a tough comparison against last years quarter, which saw the airing of the first season of The Contender.
Gross margin for the quarter improved 330 basis points to 45.7%, compared with 42.4% in the second quarter a year ago. The higher gross profit margin was achieved from an increased mix of licensing revenues as well as improved margin on sporting goods equipment due to some operational efficiencies as well as production cost reductions.
The company was able to leverage its margin improvement into a 31.4% improvement on the bottom line, reporting net income of $402,000 for the quarter, up from $306,000 last year. Adjusted earnings per diluted share, excluding the 3 cents effect of stock based compensation, for the second quarter was 13 cents per diluted share, up from 8 cents per diluted share last year.
The company expects net revenues for the year to range between $46 million to $48.5 million with diluted earnings per share between 68 cents and 73 cents.
