NEW YORK — Costs associated with consolidating production facilities continued to impact earnings for recently acquired Del Laboratories Inc. in the second quarter.
“We continued to experience high manufacturing costs as we recover from the first-quarter start-up production problems,” said Dan K. Wassong, chairman, president and chief executive officer, in a statement. The company’s decision to relocate manufacturing operations from New York to Rocky Point, N.C., has hampered results since the first quarter.
For the three months ended June 30, the Uniondale, N.Y.-based cosmetics manufacturer saw earnings tumble 23.9 percent to $3.8 million, or 36 cents a diluted share, compared with earnings of $4.9 million, or 49 cents, in the year-ago period, while sales for the period advanced 5.1 percent to $102.9 million from $98 million.
Effects of the move and the slow pace of getting new operations up and running had an even greater impact on results for the first half of the year, sending earnings plunging 52.1 percent to $4.4 million, or 43 cents a share, compared with earnings of $9.3 million, or 93 cents, in the same period a year ago. Sales declined 2.8 percent to $186 million from $191.3 million.
On July 2, the company announced it had reached an agreement to be acquired by DLI Holding Corp. for $465 million. Under terms of the deal, which is expected to close sometime during the fourth quarter, DLI will offer $385 million in cash and assume approximately $80 million in debt.
As part of the merger, Wassong will retire and be replaced by current executive vice president of marketing William McMenemy.
— Ross Tucker