Redken Laboratories said its net income was off 94% for the second quarter, largely as a result of poor domestic sales, the cost of a new factory in Kentucky and $600,000 in severance expenses.
The Canoga Park hair-care and cosmetics maker reported net income of $118,000, or 5 cents a share, for the quarter ended Jan. 31, down from $2.0 million, or 74 cents, for the same period a year ago. The company said revenue was down 7% to $25.2 million because of increased competition and lower new-product sales.
Chairman John E. Meehan said the results prompted the company's recent organizational changes and staff reductions that led to 50 firings at the company's Canoga Park headquarters and laboratories and 20 dismissals at other company locations in the United States.
Company officials said they remain committed to pursuing growth in the industry through acquisitions. Toward that end, Redken has established a $20 million line of credit from Security Pacific Bank.