Decorize posts quarterly sales growth, operating loss

The Springfield-based home-accent designer, manufacturer and distributor had $3.7 million in sales for its first quarter, up from $3.2 million in the same quarter last year.

After $2.6 million in cost of sales and total operating expenses of $1.2 million, the company had an operating loss of about $190,000, slightly more than the $186,000 loss reported a year ago.

Decorize produced a gross profit of $1.04 million, compared to $947,000 a year ago, but had a quarterly net loss of $371,000 for the quarter, compared to $312,000 last year.

The company also showed a loss in earnings per share – they were negative 1 cent per share, unchanged from a year ago. Outstanding weighted-average shares numbered about 26.6 million for the quarter, up from 25.2 million last year.

Three factors played into the quarterly loss, according to a company news release:

• The company moved into an expanded plant in Merapi, Indonesia, which required a two-week halt in production. Square footage at the plant increased by 50 percent, and wholesale sales capacity tripled;

• The company spent the quarter working on a new outsourced freight system that resulted in cost inefficiencies that have since been corrected; and

• The company is transitioning into a new $3 million bank line of credit from a former factoring arrangement, which resulted in some fees. Those are expected to be recovered through lower interest costs.

All three factors were nonrecurring and are expected to benefit operations in the future, CEO Steve Crowder said in the release.

Shares (OTCBB: DCZI) closed Wednesday at 32 cents and were unchanged as of 10:30 a.m. The 52-week range is 20 cents to 87 cents.