L'ISLET, Quebec - Metal specialist Amisco saw both sales and earnings fall in the third quarter of its current fiscal year, driven by slumping economic conditions both sides of the border and the increasing value of the Canadian dollar.

Sales for the quarter ended 01 September 2007 totalled $7.2 million, down 20.4 per cent from the $9.1 million recorded during third quarter of 2006. The company recorded a net loss of $22,817 or one-half cent per share, compared with a net loss of $106,266 or 2.6 cents per share for the comparable period.

Sales to in Canada were $2.9 million during the quarter, a drop of about 5.4 per cent from the $3.1 million recorded for the third frame of 2006. However, sales to retailers in the United States fell 28.1 per cent from $6 million a year ago to $4.3 million.

In a statement, Réjean Poitras, Amisco chairman and chief executive officer, attributed the decline to several factors including the volatility of the residential mortgage market in the U.S., which has lead to both a rise in interest rate and numerous bank repossessions, which has negatively impacted both consumer confidence and buying power. He also noted the competition from Asian manufacturers continues to be intense throughtout the North American marketplace.

During the third quarter, the exchange rate fell from 1.2464 to 1.1154, meaning that in U.S. dollars, sales to U.S. based retailers fell 19.6 per cent during the third quarter.

On a positive note, the company said selling expenses decreased by 14.2 per cent in the quarter while administrative expenses fell 15.1 per cent, resulting in a slight bump in its gross margin from 17.5 per cent to 19.6 per cent quarter-over-quarter.

However, for the first nine months of the fiscal year, Amisco remains profitably although sales are down 17.1 per cent.

For the nine months that also ended 01 September 2007, net sales were $22.6 million, compared to $27.2 million for the same period of 2006. In Canada, sales fell from $9.2 million or $8.4 million, a decline of 8.5 per cent. In the U.S., sales were $14.2 million, a 21.5 per cent drop from the $18 million recorded last year.

The average exchange rate was 1.2044 during first nine months of the current fiscal year, down from 1.2613 for the comparable period a year ago. In U.S. dollars, sales in the U.S. declined 17.8 per cent.

However, reduction in manufacturing costs resulted in an improved gross margin rate of 23.4 per cent, up about 2.3 points year-over-year, while the appreciate of the Canadian dollar had a negative impact of $155,187 on the company's bottom line.

Net earnings for the first nine months were $407,252 or 10 cents per share, compared to a net loss of $169,641 or 4 cents per share for the same period of 2006.