Earlier this week, DAC Technologies (DAAT – $0.52) announced results for the first quarter, ended March 31, 2010. Revenues came in at $2,006,676 compared to $3,533,456 in the first quarter of 2009, a decrease of 43%.
The Company reported a net loss for the period of $73,826 or $.01 per diluted share, compared to a net profit of $184,299 or $.03 per diluted share, for the comparable period last year.
The reason for the significant drop in sales and earnings was the fact that in the first half of 2009, DAC experienced a spike in gun related product sales. This trend was seen all across the United States when President Obama took office because many believed the President and a Democratic-controlled Congress would move to restrict firearm ownership.
These peak sales eased off from the second part of 2009, along with concerns about gun control. The Company wasn’t able to make up with other sales, resulting in these numbers.
Mr. Collins, the Company’s Chairman and CEO, said: “We expect this trend to continue into the second quarter of 2010 as we must anniversary large sales increases from 2009. We expect sales to return to normal in the third and fourth quarters of 2010. The Company has not lost any customers and, in fact, has new products going into stores for the fall hunting season.”
We knew from the previous two quarters that the exceptional gun related sales were a thing of the past. Nevertheless we were surprised that DAC’s revenues and earnings weren’t higher.
Disappointed investors hit the sell button when the first quarter results and outlook were announced. We haven’t done so at this moment and we will also hold on to our shares after the second quarter, but Q3 will need to show a significant improvement!
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