Right Start Inc. Ends Year With Overall Losses
The Right Start Inc. suffered a second straight quarter of losses as restructuring write-offs continued to hurt the Westlake Village company’s bottom line.
Company figures released for the fourth quarter and the fiscal year, which ended June 1, showed overall losses.
Included in the results are expenses and write-offs of about $2.7 million for the year and $1.3 million for the quarter related to the restructuring of the company’s catalog division and outsourcing of its telemarketing function, outsourcing of the company’s warehousing and distribution function, employee severance and termination expenses, hiring and relocation expenses for new key management personnel and inventory adjustments.
Jerry R. Welch, chairman and chief executive, said he does not expect the company to be profitable in the near future because of a significant long-term investment it made in human resources and infrastructure.
“However, we believe we now have the right strategic plan, as well as the management in place, to build a profitable company for the future,” Welch said.
For the year, the company recorded a net loss of $3.9 million, or 60 cents a share, on $41.8 million in revenues. That compares with a net loss of $2.1 million, or 33 cents a share, on revenues of $45.7 million for fiscal 1995.
For the fourth quarter, revenues were $11.3 million compared with $10.3 million for the same quarter a year ago. The company reported a net loss of $2.4 million or 34 cents per share, compared with a net loss of $92,000, or 1 cent per share last year.
The company finished fiscal 1996 with 22 stores, compared with 11 on May 31, 1995. Since June 1, the company has opened two new stores and plans to open 13 more before Thanksgiving.
The Right Start sells products for infants and young children.