Action Products' sales off 10 percent in Q1
By Staff -- Playthings, 5/12/2008 8:39:00 AM
ORLANDO, Fla.—Action Products International said in an SEC filing that a 10 percent drop in net sales during the first three months of 2008 helped balloon its net loss for the quarter 65 percent to $905,800.
Net sales during the period were $1.22 million, down from $1.36 million for the three months ended March 31, 2007, a decrease attributed to lower sales of its Curiosity Kits products—blamed on a transition to new product packaging planned for rollout mid-year—and a decrease in sales of its I Dig line.
During the quarter, gross profit decreased 27 percent to $158,300, while gross profit percentage decreased from 43.2 percent in 2007 to 35.4 percent for the most recent period. The decrease in gross profit percentage was “almost entirely attributable to sales of certain quantities of slow moving product at approximately net realizable values previously recorded and higher importation costs,” the company said.
Selling, general and administrative expenses increased 15 percent to $1.33 million due primarily to: an increase in compensation and related benefit costs, principally as the result of an increase in stock based compensation; an increase in professional services of primarily resulting from Sarbanes-Oxley compliance consulting services, legal and investor relations services; and an increase in bad debt expense of $24,200.
SG&A increases were partially offset by a decrease in brand licensing expenses and lower advertising and promotion costs.
On May 5, the NASDAQ Stock Market notified the company that for the previous 30 consecutive trading days, API’s common stock closed below the minimum $1.00 bid price per share required by its listing rules. The company has been given until Nov. 3, 2008, to regain compliance by having its stock price close at or above $1.00 per share for a minimum of 10 consecutive trading days.
In response, API said it “intends to actively monitor the bid price for its common stock between now and November 3, 2008, and evaluate various options available to the company if its common stock does not trade at a level that is likely to regain NASDAQ compliance.”
