Revenues in the first fiscal quarter ended March 29, 2015 slid 12.8 per cent year over year at Checkpoint Systems, a developer of solutions for the retail industry like loss prevention, etc.
According to a Checkpoint press release, its sales dipped to $128.5 million, down 12.8 per cent from $147.4 million in the first quarter of fiscal 2014.
“Foreign currency translation effects resulted in an $11.5 million or 7.8 per cent decrease in net revenues,” Checkpoint said.
During the reporting quarter, gross profit margins grew to 44.0 per cent, an increase of more than 170 basis points compared to the same period last year.
Selling, general, and administrative (SG&A) expenses in the first quarter of 2015 slipped 3.0 million, or 5.6 per cent year on year to $51.3 million.
Operating loss in the quarter under review amounted to $0.3 million as against net income of $2.2 million same period last fiscal.
For the first quarter of fiscal 2015, net loss per diluted share stood at $0.02, versus nil per diluted share in the first quarter of fiscal 2014.
Despite lower revenue driven by foreign currency headwinds and the sunset of its significant 2014 EAS hardware rollouts, Checkpoint added that it reported its highest first quarter gross profit margin in 21 years.
CEO George Babich said, “As we previously outlined, 2015 will be a challenging year as we work to secure our next significant rollout and begin to drive organic revenue growth.”
“We are making good progress on both fronts, and I am gaining confidence that we will secure at least one signed contract for an additional new hardware rollout beginning later this year,” he too added.
“I am also encouraged that our spending on certain strategic initiatives will begin to take root in 2016,” he observed.
In the first quarter, Checkpoint significantly increased its rate of investment year-over-year in both R&D and capital expenditures, both of which were up $0.7 million and $2.5 million, respectively.
SG&A spending in constant dollar terms is up nearly $1 million as well, although masked by the $4 million SG&A benefit from foreign currency translation effects.
It has also added strategic headcounts in sales and product management to target underserved vertical markets.
It has engaged consultants to complement its in-house expertise to focus on its supply chain optimisation project.
“We have invested in new equipment and IT systems to enhance our capabilities and increase automation in our Apparel Labeling business,” Babich informed.
