CirTran announces 37% increase in revenues in Q3
Nov 22, 2006
Company continues to expand consumer marketing strategy
CirTran Corporation (OTCBB: CIRT) announced financial results for the third quarter and first nine months of fiscal 2006, the period ended September 30, 2006. CirTran's management believes that comparisons of the financial results from the third quarter of 2006 to the third quarter of fiscal 2005 do not provide an accurate picture of the Company's progress in executing its new consumer marketing strategy. While management is providing those comparisons for informational purposes, the Company is also providing sequential comparisons to the second fiscal quarter, which provide a more meaningful comparison relative to the Company's progress.
For the period ended September 30, 2006, CirTran reported net sales of $3.0 million, a 37% sequential improvement compared to the $2.2 million reported for the previous quarter ended June 30, 2006, and a 27.2% decrease compared to the $4.3 million reported for the third quarter of fiscal 2005. It was the third consecutive quarter of sales growth for CirTran, which had sales of $1.7 million in the first quarter of fiscal 2006. The year-over-year decrease is due to a considerable decrease in the sale of Ab King product, which is a matter of ongoing litigation for the Company. The sales in the other divisions have remained consistent. Cost of sales decreased by 12% to $2.3 million, or gross profit margin of 26.8%, for the third quarter of 2006 from cost of sales of $2.6 million with gross profit margin of 39.0%, for the third quarter of 2005 due to the decrease in revenue. Gross profit margins were 44.6% for the second quarter of fiscal 2006.
Selling, general and administrative expenses were $1.1 million for the third quarter of 2006, a sequential decrease of 44.9% compared to the $1.92 million for the second fiscal quarter of 2006 and an increase of 2.5% compared to $1.03 million for the third quarter of 2005. The increase is due to the additional salaries, commissions paid to Diverse Media Group, legal fees, and consulting fee paid primarily to an outside force.