Universal Power Group, Inc. (NYSE MKT: UPG), a Texas-based distributor and supplier of batteries and related power accessories, and a third-party logistics provider, today announced financial results for the second quarter and six months ended June 30, 2012.
For the second quarter, UPG reported income from continuing operations of $406,000, or $0.08 per diluted share, on net sales of $23.6 million, compared with income from continuing operations of $189,000, or $0.04 per diluted share, on net sales of $21.6 million for the second quarter of 2011. UPG’s Monarch Outdoor Adventures, LLC (Monarch) subsidiary was sold on May 4, 2012, and results from Monarch have been reported as discontinued operations. Including the results from Monarch, UPG reported a net loss of $97,000, or ($0.02) per diluted share compared with net income of $125,000, or $0.03 per diluted share, in the second quarter of 2011.
“Our results for the second quarter were affected by the loss incurred on the sale of our Monarch subsidiary, but we generated solid operating improvement in our results from continuing operations when compared to the prior year,” stated Ian Edmonds, UPG’s President and Chief Executive Officer. “Our results were also enhanced by improved performance of our supply chain, as increased deliveries from our Chinese suppliers enabled us to satisfy customer demand and rebuild inventories that had been depleted since the second quarter of 2011.”
Second Quarter and Six Month Results
Net sales for the second quarter increased 9.3%, to $23.6 million from $21.6 million in the second quarter of 2011. The increase in net sales in the 2012 second quarter was primarily driven by an increase in sales of batteries and related power accessories, as well as growth from ProTechnologies, Inc. (PTI), which UPG acquired on April 20, 2011.
Gross profit decreased to $4.2 million in the quarter, compared with $4.4 million in the second quarter of 2011, due mainly to supply chain disruptions in China over the past year. As a percent of sales, gross margin decreased to 17.8% in the second quarter of 2012, from 20.2% in the prior year. Operating expenses decreased 10.1% to $3.5 million in the second quarter of 2012, from $3.9 million in the second quarter of 2011. The decrease in operating expenses included lower personnel costs, reduced professional fees, and decreased marketing, travel and facility expenses.