By  on March 30, 2010

Swank Inc.’s fourth-quarter profits came up against a year-ago benefit and wound up being cut in half, but the men’s accessories firm registered improvements in sales, gross margin and its cash and debt positions.

In the three months ended Dec. 31, net income fell 50.9 percent to $1.3 million, or 22 cents a diluted share, from $2.6 million, or 44 cents, in the year-ago quarter. Excluding a $2 million insurance settlement in the 2008 period, profit before income taxes rose 24 percent to $2.8 million from $2.2 million.

Sales moved up 2.5 percent to $35.7 million from $34.8 million as gross margin increased to 33.9 percent of sales from 31.4 percent. Selling and administrative expenses were up 9.5 percent to $9.2 million, with the increases attributed to start-up costs for the company’s women’s accessories division, expenses related to the company’s representative office in China and increases in some advertising expenses.

The New York-based firm ended the year with no borrowings under its revolving credit facility. Cash and cash equivalents rose to $571,000 from $343,000 at the end of 2008.

John Tulin, chairman and chief executive officer, told WWD, “We planned all year to manage our assets, receivables and payables and make sure we had our inventories under control, and we’re very satisfied with how that came out.”

Recently, retailers’ enthusiasm and store traffic have proved a pleasant surprise. “There’s just a better feeling that, even if the economy isn’t exactly rebounding, it’s kind of bottomed out,” Tulin said. “I’m also seeing that international business has picked up a bit — customers who were scared to death last year are less scared, and have less inventory.”

For the full year, net income declined 14.9 percent to $1.8 million, or 31 cents a diluted share, from $2.1 million, or 35 cents, in 2008. Sales ticked up 0.1 percent to $114.8 million from $114 million, with gross margin for the year rising to 31.7 percent of sales from 31.4 percent.

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