Global market leads to Starrett earnings plunge
Athol-based tool manufacturer L.S. Starrett felt the bite of the international market’s downturn in its fiscal year 2015 report with a decline in sales and a large drop in net earnings.
Net sales for fiscal year 2015 declined $5.6 million, or 2 percent, compared to fiscal year 2014, with gains in North America offset by lower sales elsewhere, caused principally by a stronger U.S. dollar when measured against other currencies, Starrett reported in its annual 10-K filing with the U.S. Securities and Exchange Commission. Net sales in North America increased six percent, to $137.3 million in fiscal year 2015, while international sales fell 11 percent to $104.4 million. The company said that 90 percent of that decline, $12.1 million, was due to a weaker Brazilian Real.
“A significant amount of our manufacturing and production operations are located, or our products are sourced from, outside the United States. As a result, our business is subject to risks associated with international operations,” the company stated in the filing. “Sales declined as an economic recovery in Europe and strong gains in Asia was offset by a continued weakening of the … Real against the U. S. dollar.”
Operating profit for the company fell 27.7 percent from $11.9 million in fiscal 2014 to $8.6 million in 2015. Net earnings were down 22.4 percent from $6.7 million to $5.2 million.
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