Profits up, sales down at Starrett
Improved margins and lower expenses helped put tool manufacturer L.S. Starrett back in the black in the quarter that ended March 31, though revenue for the Athol-based company fell slightly.
The company said in a filing Monday with the U.S. Securities and Exchange Commission that it turned a profit of $1.7 million, or 24 cents per share, in the third quarter of its 2014 fiscal cycle. That’s up from a loss of $1.5 million, or 22 cents per share, in the same quarter last year.
However, Starrett said sales fell from $59.9 million last year to $58.3 million this year as lower shipments and unfavorable exchange rates in South America more than offset strong growth in China and increased demand for precision hand tools and capital equipment metrology products in North America.
Specifically, North American sales increased by $900,000 and Chinese sales grew by $700,000, but overall international sales declined by $2.5 million due to reduced Latin American demand of $500,000 and currency-related losses in Brazil of $2.5 million.
Expenses fell from $17.7 million in 2013 to $16.3 million this year, stemming primarily from a $600,000 cut in salaries and benefits and a $400,000 decline in information technology, professional fees and marketing expenses.
Increased efficiencies in manufacturing and improved sales of high-margin capital equipment boosted gross margins from $15.9 million – or 27 percent of sales – last year to $19.3 million – or 33 percent of sales – in 2014.
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