Stronger profit margins, coupled with growth in both its cleaning and personal care business, as well as its imaging unit, helped CPAC Inc. boost its second-quarter profits by 42 percent, the Leicester-based company said Tuesday.
CPAC said its profits rose for the 14th straight quarter to $2.26 million, or 31 cents per share, from $1.59 million, or 28 cents per share, a year earlier.
CPAC's earnings per share rose at a slower rate than its overall profits because the company had about 1.7 million more shares outstanding at the end of the quarter than it did the year before because of its recent private placement stock sale.
The company's sales rose by 8 percent to $24.9 million during the quarter that ended on Sept. 30 from $23 million the year before.
Revenues from CPAC's cleaning and personal care business rose by 12 percent to $12.4 million from $11.1 million a year earlier as the company doubled the amount of contract manufacturing sales for its Fuller Brush Co. business.
Sales from CPAC's imaging unit improved by 5 percent to $12.5 million from $11.9 million as the company expanded its business in the Pacific Rim and got a boost from a strengthening economy in Europe.
Thomas N. Hendrickson, CPAC's chief executive officer, said the company was able to boost its profit margins because of the investments it made during the last fiscal year to improve the manufacturing capabilities of both of its businesses.
Those improvements have helped the company seek contracts to do private-label manufacturing at both of its businesses, including work that involves higher production volumes and more competitive pricing, Hendrickson said.
CPAC hopes to develop its Fuller Brush plant in Great Bend, Kan., which operates at well under its total capacity, as a source for high-quality outsource manufacturing. Because the company expects its production volume to increase, CPAC has plans to make additional capital improvements to upgrade its manufacturing operations, Hendrickson said.
For the first half of the fiscal year, CPAC's profits rose by 49 percent to $4.1 million, or 55 cents per share, from $2.7 million, or 48 cents per share.
The company's sales increased by 7 percent to $47.4 million from $44.4 million, led by an 8 percent rise in revenues from its cleaning and personal care business, coupled with a 5 percent improvement at its imaging unit.