— Net Income more than doubles on 11% Sales Increase —
RANDOLPH, Vt., Jan. 10 /PRNewswire-FirstCall/ — Vermont Pure (AMEX:VPS) announced unaudited financial results for its fiscal year ending October 31, 2002 today. Sales revenue for fiscal year 2002 increased 11% to $71.7 million from $64.9 million the previous year.
Net income increased 125% from $1.2 million in fiscal year 2001 to $2.5 million in fiscal year 2002. Earnings per share were $.12 in fiscal year 2002 compared to $.06 the previous year.
“We are pleased with our results particularly in this difficult economic and retail market environment. Our focus this year has been to grow the business while managing the cost structure to enhance profitability while continuing to provide excellent customer service,” said Tim Fallon Chairman and CEO.
Retail sales increased 31% in fiscal year 2002 from $17.3 in fiscal year 2001 to $22.7 million in 2002. Private label sales more than doubled and represented 64% of retail sales and 20% of total Company sales. Sales of the Company’s branded products, Vermont Pure and Hidden Spring, decreased 22% in fiscal year 2002 compared to the previous year. “The current competitive retail PET environment will continue to pressure our branded sales. However, our position as a leading provider of natural spring water to the private label market should enable us continue to increase sales in the segment,” continued Fallon.
Sales in the home and office segment increased 3% to $49.1 million in fiscal year 2002 from $47.6 million in the previous year primarily as a result of the acquisition of Iceberg Springs at the beginning of the year. “Our Home & Office delivery business mirrors the softness in the economy. The Connecticut region which represents 60% of total Home & Office sales has been particularly affected by a decrease in the manufacturing sector and by higher vacancy rates in the small office segment,” said Peter Baker President of Vermont Pure Holdings, Ltd.
Operating Income increased 32% in fiscal year 2002 to $9.1 million from $6.9 million the previous year. The increase in operating earnings is primarily attributable to a decrease in operating costs that was a result of a significant decline in amortization costs for the year based on implementation of FASB 141 and 142.
The Company has adopted new accounting provisions that change the way it accounts for promotional costs. Such costs are now deducted (as allowances) from gross sales instead of being included in advertising and promotional expense. This reclassification has been made in prior years as well for comparability. It has no effect on operating income or net income.