Plagued by high costs, Redken Laboratories finished a year of reduced earnings and sales with 87% lower net income for its fourth quarter ended July 31.
Redken earned $311,000 in the quarter, or 10 cents a share, versus $2.4 million, or 81 cents a share, a year ago. The poor showing came on sales that inched up 1%, to $28.5 million, a record for Redken.
David Auchterlonie, chief financial officer, said profits were reduced in the quarter because of $400,000 in termination expenses associated with the company's recent management shake-up and $1.5 million in television advertising.
For the fiscal year, Redken posted 76.6% lower earnings on 4.9% lower sales. Net income was $2.0 million, or 65 cents a share, versus $8.4 million, or $2.77 a share, in the previous year. Sales were $103.3 million, down from $108.5 million.
Auchterlonie said domestic sales have suffered because of increased competition and that profits have been hurt throughout the year by expenses at Redken's new factory in Kentucky.