Wednesday, October 05, 2005

The Albuquerque Tribune: Z-CoiL Sales Up, Profits Down

The Albuquerque Tribune: Abq Biz: "Up and down: Z-Coil Footwear had sales of $11.9 million in the fiscal year ending June 30. That was up 9.4 percent from the year before. But profits were down, from $1.02 million to $501,319, because of taxes and a new computer system, the company said. "

"While the sales growth and net income reported this year are below our projections, they are gratifying when viewed in context with the events of the year," says Z-Tech CEO and President Andrés Gallegos.

Net income for the year ended June 30, 2005, was affected in part by taxes and two major company initiatives. Z-Tech's 2005 income was subject to $316,932 in income taxes. Z-Tech was not required to record any income tax expense in 2004 because the company had a net operating loss carry forward. All of the net operating loss carry forward has now been utilized.

The two initiatives that affected net income in 2005 were the restructuring of our distributor program and the implementation of a new enterprise resource planning computer software system.

We suspended adding new distributors in February 2004, and began processing distributor applications again under our new franchise retail program in February 2005. Z-Tech incurred additional expenses directly related to these two initiatives of approximately $850,000 in 2005.

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