Dave Allen, newly appointed chief financial officer for the Millbrook Press, is reviewing both the company's operations and internal accounting policies in a bid to improve profitability. Allen stressed that there are no accounting irregularities, but that he is examining some of the estimates Millbrook uses in developing its financial reports and forecasts. The review could result in noncash charges for the fourth quarter and fiscal year ended July 31.
Allen's review comes in the wake of a third quarter in which Millbrook reported a net loss of $166,000 on sales of $4.2 million, compared to last year's third-quarter net income of $311,000 on sales of $4.4 million. For the current nine-month period, net income was down to $155,000 from $563,000, despite a 15.3% revenue increase to $13.5 million.
The company blamed the sluggish results on a high level of returns from the trade market during the third quarter. Allen told PW he is looking for ways to control returns and is considering reducing the number of trade titles and/or reducing initial print runs. Allen is also looking at Millbrook's head count "across the board." He commented that he is certain "there are operating efficiencies that can be achieved," although he stopped short of saying that layoffs are in the offing.
