MONTREAL – Industrial valve maker Velan Inc. (TSX:VLN) says lower margins and higher administration costs resulted in a drop in year-over-year net profit in its most recent quarter.
Net earnings amounted to US$4.8 million or 22 cents per share in the three months ended Nov. 30, down from US$8.3 million or 38 cents in the comparable year-earlier period, the company said Tuesday.
Revenue rose to US$127.3 million from US$115.6 million.
“The $3.5 million decrease in net earnings is primarily attributable to a lower gross profit percentage and increased administration costs, in particular an increase in costs recognized in connection with the company’s ongoing asbestos litigation and higher sales commissions resulting from the increased sales output in the quarter,” Velan said in remarks accompanying its earnings.
It said the US$11.7 million or 10.1 per cent increase in sales was due to the shipment of large export orders in the quarter.
Montreal-based Velan has manufacturing plants in 10 countries and employs about 2,000 people.