Net sales for the fiscal year ended March 31, 2008 increased 13 percent toa record $19,558,000 compared to $17,242,000 in the same period last year.Operating income for the year increased 25 percent to $7,061,000 compared to$5,659,000, while net income for the year increased 16 percent to a record$4,610,000 or $1.41 per diluted share compared to $3,958,000 or $1.22 perdiluted share one year ago.
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For the fourth quarter of fiscal 2008, net sales were up 10 percent to arecord $5,790,000 compared to $5,286,000 in the same quarter last year.Operating income for the quarter increased seven percent to $1,937,000compared to $1,805,000, while net income for the quarter decreased 17 percentto $1,195,000 or $.36 per diluted share compared to $1,438,000 or $.44 perdiluted share one year ago, caused by tax adjustments in the fourth quarter offiscal 2007.
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For the fiscal year, Mesa experienced net income growth of 16 percent,which was ahead of the sales growth rate of 13 percent. Most of thisacceleration of profitability for the fiscal year can be attributed to a gainin gross profits as a percent of net sales. During the fiscal fourth quarter,we saw a 17 percent decline in net income despite a year over year increase innet sales of 10 percent. The decline in the quarter was due to a one timeadjustment of the income taxes that occurred in the fourth quarter of lastfiscal year and was attributable to favorable income tax treatment on assetsacquired in the Raven acquisition during fiscal 2007. When compared on aquarterly basis, income tax expense in the fourth quarter of fiscal 2008 was40 percent of income before taxes compared to 21 percent in the comparableperiod one year ago. If adjusted to the total year fiscal 2008 tax rate, netincome for the fourth quarter of fiscal 2007 would have been lower byapproximately $280,000 to $1,158,000. Using this adjusted fiscal 2007 netincome for comparison, fiscal 2008 fourth quarter net income of $1,195,000would have increased three percent compared to the $1,158,000 of adjusted netincome in the fourth quarter of fiscal 2007.
"The fourth quarter of Fiscal 2008 was an excellent finish for a year inwhich we posted solid growth at Mesa," said John J. Sullivan, President andChief Operating Officer. "Going into the quarter we had a challenging goal tomeet to be able to exceed the exceptional fourth quarter that we had lastyear, but the Mesa team pulled together and we posted 10 percent sales growthfor the quarter. With record sales and operating profits for both the quarterand the year, Mesa's businesses all have very good momentum."
"We are very excited about the prospects for the new fiscal year,"continued John Sullivan. "We have recently introduced the most significantadvancement in our data logger technology since the inception of the productline in the mid 1980's. The new DataTrace RF System provides real time data,an expanded temperature range and greatly increased battery lifetime. Thesenew features are important for our data logger customers in all of ourmarkets. This new product has been well received by our early adopters and weexpect the DataTrace RF to bolster our growth in the high performance datalogger market in the months ahead. With this significant new product forDataTrace and good sales growth momentum in our other two core product lines,Raven and Medical, we expect another solid year for Mesa in fiscal 2009."
During fiscal 2008, sales of the Company's medical products and servicesincreased five percent for the fiscal year and decreased three percent duringthe fourth quarter compared to prior year periods. For the year, Medical sawincreased sales of meter products, disposables and service, which werepartially off-set by lower
