SLS revenues up 4.2%

Revenue for the quarter was $1.26 million, compared to $1.21 million in third-quarter 2005. Gross profit was $392,854, an 8.7 percent increase from $361,289 a year ago.

SLS reported a $1.7 million third-quarter loss from continuing operations, though that’s improved from a $2.95 million loss in the same period last year. The third quarter also brought a net loss, applicable to common shareholders, of $655,015, or 1 cent per share. The loss included $257,964 in noncash charges.

For the nine months ended Sept. 30, SLS revenue reached $4.95 million, a 71.4 percent increase from $2.89 million last year. Gross profit for the period was $1.34 million, up 45.2 percent from 2005.

On a year-to-date basis, the company has suffered a $7 million loss from operations, compared to an $8.01 million loss in the same period last year. The company’s year-to-date net loss, applicable to common shareholders, was $7.59 million, or 16 cents a share.

During the third quarter, SLS entered into a distribution agreement with Nationwide Marketing Group, which is marketing the company’s Q Line Silver System to a larger group of retailers. The agreement has reduced the company’s advertising and promotion expenses by $552,000.

“As we have just begun shipping our Q Line products in the end of this quarter to the Nationwide members, the initial response has been very positive,” SLS CEO John Gott said in a news release. “We are expecting these products to gain momentum over the next quarter and in 2007 and build into the primary outlets for our Q Line and other home theater products.”

Also during the third quarter, SLS was notified that it is no longer in compliance with American Stock Exchange listing standards and submitted a compliance plan, which AMEX rejected. AMEX plans to strike SLS common stock, and the company does not intend to appeal that action.

SLS plans to pursue a listing on the Over-the-Counter Bulletin Board.

Gott said SLS will “continue to manage expenses tightly and focus on driving operating efficiencies and improved results.”

SLS shares (AMEX: SLS) closed Nov. 15 at 16 cents, compared to a 52-week range of 14 cents to $1.75.

This story originally appeared in SBJ’s Nov. 14 free e-news Daily Update. Click here to register.