TAUNTON, Mass. – Marine engine and air conditioning manufacturer Westerbeke saw a decrease in net sales of $5,571,300 or 21.8 percent in fiscal 2003 as compared to fiscal 2002, the company reported in its SEC form 10K, released today.
The decrease in net sales resulted primarily from the loss of the company’s exclusive agreement with a major customer, as announced on April 19, 2002. The agreement with this customer expired on June 30, 2002.
International sales were $2,651,800 in 2003, representing 13.3 percent of net sales, as compared to $2,687,800 in 2002 or 10.5 percent of net sales, according to the company.
Gross profit decreased $1,084,200 or 19.5 percent in fiscal 2003 as compared to fiscal 2002. Gross profit as a percentage of sales was 22.4 percent in fiscal 2003 and 21.8 percent in fiscal 2002.
Selling, general and administrative expense (SGA) decreased $454,100 or 9.1% in fiscal 2003 as compared to fiscal 2002. The decrease was primarily the result of decreases in warranty costs, according to the company. In addition, there were no bonuses paid in fiscal 2003 as compared to fiscal 2002.
The company said it has incurred $670,300 of costs to date associated with the proposed merger of the company with and into Westerbeke Acquisition Corp., as announced on May 5, 2003. Due to uncertainty as to whether the proposed merger transaction will ultimately be completed, the costs incurred to date have been expensed in SGA.
Westerbeke reported a net loss of $1,061,500 in fiscal 2003 as compared to net income of $2,886,000 in fiscal 2002. The net loss in fiscal 2003 was primarily attributable to the gross profit lost as a result of the decreased sales volume and also the $670,300 of costs expensed relating to the proposed merger, according to the company. The net income in fiscal 2002 was primarily attributable to the receipt and recognition of the arbitration award against one of the company’s former suppliers.