This excerpt taken from the WSTG 10-K filed Mar 12, 2007.
We reported a net income of $3.3 million for the year 2006 as compared to a net income of $2.7 million in 2005. Our income before income taxes increased by $2.5 million but this was partly offset by the $1.9 million dollar increase in taxes because in 2005, we reversed our $0.9 million balance of our deferred tax valuation allowance by reducing income tax expense.
Income from operations amounted to $4.8 million in 2006 as compared to $2.8 million in 2005, an increase of $2.0 million in 2006, as compared to 2005. Gross profit increased by $2.0 million dollars. This additional gross profit increased our income from operations since Selling, General and Administrative (SG&A) expenses were substantially unchanged when compared to 2005.
The Companys sales, gross profit and results of operations have fluctuated and are expected to continue to fluctuate on a quarterly basis as a result of a number of factors, including: the condition of the software industry in general; shifts in demand for software products; industry shipments of new software products or upgrades; the timing of new merchandise and catalog offerings; fluctuations in response rates; fluctuations in postage, paper, shipping and printing costs and in merchandise returns; adverse weather conditions that affect response, distribution or shipping; shifts in the timing of holidays; and changes in the Companys product offerings. The Companys operating expenditures are based on sales forecasts. If revenues do not meet expectations in any given quarter, operating results may be materially adversely affected.
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