Net earnings from continuing operations in the second quarter ending June 29, 2014, soared at NYSE listed Checkpoint Systems to $0.23 per diluted share versus $0.02 per diluted share in the same period of last year.
This was due to operating income in the second quarter of 2014 shooting up by more than 100% to $13.0 million, $6.6 million higher, compared with $6.4 million in the same period of last fiscal year. At the same time, foreign currency translation effects resulted in a $0.6 million reduction in operating income.
Net revenues from continuing operations in the second quarter of 2014 fell marginally by 0.8%, to $170.9 million from $172.3 million in the same quarter of 2013. Foreign currency translation effects resulted in a $1.0 million or 0.6% increase in net revenues.
During the quarter, gross profit margins were 42.4% compared with 40.6% in the corresponding second quarter of 2013.
Selling, general, and administrative (SG&A) expenses in the second quarter under review fell $1.8 million or 3.2% to $55.4 million from $57.2 million in the same quarter of 2013. The second quarter of 2014 included approximately $2.4 million ($1.6 million in SG&A) of additional cost reductions from global restructuring initiatives.
Net earnings from continuing operations in the second quarter of 2014 were $0.23 per diluted share versus $0.02 per diluted share in the same period last year.
Adjusted Non-GAAP operating income from continuing operations was $13.3 million in the second quarter of 2014, $4.1 million higher when compared with $9.2 million in the same period last year.
Adjusted EBITDA was $21.0 million in the second quarter of 2014, $3.1 million higher when compared with $17.9 million in the second quarter of 2013. Adjusted Non-GAAP net earnings from continuing operations in the second quarter of 2014 was $0.25 per diluted share compared to $0.11 per diluted share in the same period last year.
Checkpoint Systems' President and Chief Executive Officer, George Babich, said, "I am pleased with our second quarter performance as we continue to execute our three-year plan. Gross profit margins increased almost 200 basis points over the second quarter last year, and nearly 400 basis points year to date, over the first half of 2013.
“Gross profit margins were again higher across nearly all core product lines, driven by continued manufacturing cost reductions, the benefits of Project LEAN and manufacturing and supply chain efficiencies. Gross margins were also favorably impacted by the mix of revenues toward EAS consumables, reflecting the recurring portion of our recent market share gains.” Mr. Babich added.
Checkpoint Systems' said it will continue to develop additional cost savings and margin enhancement initiatives over and above those in the global restructuring initiatives and that the value of these opportunities currently is expected to be $12 million to $15 million by the end of 2014, with an annualized benefit of $15 million to $20 million.
