Sales fell by 16.9 percent to $4.9 million for the third quarter ended July 31 at Signature Eyewear. Though the net income was down by just over a quarter at $115,000, the company noted that this was the 19th consecutive quarter of profitability. The company said the drop in sales was because of the deepening recession, as well as production delays at its Chinese manufacturing facilities caused by labor shortages. These delays will probably continue into the next quarter. The net income fell because of the lower sales, but higher margins helped keep the drop from being too drastic, as did lower operating and interest expenses.
The company's debt had fallen to $3.1 million as of July 31, down from $4.2 million on Oct. 31, 2009. The current figure is its lowest level in more than a decade.
On June 30, Signature's licenses for Bebe and Hummer eyewear expired. Signature said it would probably sell its existing inventory through the end of this year in the U.S., and Bebe globally through the end of 2011. The company said the loss of these licenses would adversely affect revenues, though the company was looking at other ways to compensate, including coming up with other fashion accessories. (See news brief on Bebe's new licensee.)