2002 2nd Quarter Report
To Our Stockholders,
Sales continued to rebound in the second quarter of 2002 to a record level of $3,164,255, an increase of 18 percent over the second quarter of 2001. Net income was $131,241 or 11 cents per diluted share, compared with a loss of 2 cents per diluted share for the 2001 period. For the six month period sales are up by 7 percent and net income is up by 161 percent.
It is particularly encouraging that sales growth was spread across most products and geographical markets. Overall margins remained steady with last year and overhead expenses were reduced. This was a very healthy quarter for Chromaline.
In the current environment of indecipherable, if not inaccurate, corporate financial statements, I would like to point out some things on our balance sheet that separate us from these types of companies:
1. We have no long term debt. This is because we have historically been financially conservative and have funded our growth, including the Nichols acquisition, from earnings. If we choose to make a larger acquisition, we have significant borrowing capacity before turning to an equity option.
2. Our current ratio (current assets to current liabilities) is 5.7. The rule of thumb is that a ratio of 2 is good and numbers above that indicate even better financial strength. This again reflects our conservative financial approach. We are proud to issue an understandable and straightforward financial statement that reflects a very healthy company.
We are also pleased that our sales are again growing, that new products are being added to our lines and that our distribution network is being strengthened. All of this has been done while maintaining a tight control over costs. We are beginning to see the return on this disciplined approach to our business.
For the Board of Directors,
William C. Ulland Chairman, President & CEO