REVENUE & OPERATING EXPENSES
THREE MONTHS ENDED JUNE 30, 2007 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2006
Total sales were at approximately $1,742,000 for the three months ended June 30, 2007 compared to $156,000 for the prior period a year earlier, an increase of over 1010%. This increase was a primary result of the acquired operations of Marshall Distributing wholesale natural products distributor and continued efforts of management to seek out opportunities to provide value for a broad customer base.
The Company's gross profit for the three months ended June 30, 2007 compared to 2006 increased to $1,291,000 from $140,000. Gross profit as a percentage of sales decreased to 74% in 2007 from 89% in 2006. This is a result of lower margins in the wholesale distribution business.
Total operating expenses (selling, general and administrative expenses) for the three months ended June 30, 2007 compared to 2006 decreased by $301,000 to $921,000 from $1,222,000 in the prior period. This was primarily due to a significant decrease in services paid with stock issuances for professional fees of the Company during the period.
Income from operations for the three months ended June 30, 2007 increased to an income of $ 369,000 from a loss of $(1,083,000) compared to the same period 2006, an increase of $ 1,452,000. The Company's increase in the operating income was primarily the result of the increase in gross profit from the acquisition of Marshall Distributing operations adding contribution margin to help service the general and administrative expenses of the company. Sales will need to continue at this rate in order for the company to cover the Company's operating needs.
Interest expense for the three months ended June 30, 2007 was $78,000 as compared to the same period in 2006 of $33,000, up $45,000. The interest expense increased as a result of the acquisition of Marshall Distributing assets and operations.
Net income increased $1,472,000 from a loss of $(1,116,000) to a gain of $ 356,000 for the six months ended June 30, 2007 and 2006 respectively. This net increase is primarily attributable to the increase in sales and the decrease of professional services paid with stock.
