US: HBSL getting back on feet after cost cutting
House of Brussels Chocolates (HBSL) has announced "very encouraging" results for its third fiscal quarter, put down to cost cutting and focusing on the efficiency of newly acquired capacity.
At the start of the quarter (1 November 2005), HSBL terminated ineffective staff and management, bettered vendor pricing of raw materials and packaging, and dropped product lines and customers that could not deliver a significant gross profit, in a bid to improve financial performance.
The company said sales increased 40% quarter on quarter and cash operating loss reduced by 70%, but despite now being confident of a positive fourth quarter, which ends on 30 April 2006, it is still not forecasting a bottom line operating profit.
HSBL CEO Grant Petersen said: "It is never easy to sever long term relationships in a growing young company, but for the sake of productivity it was something we had to do. One thing that has never been in question is the growing demand from large customers for Brussels' superior chocolates.
"This can be shown by our increased third quarter sales, something that I am confident will continue into the fourth quarter. This top line improvement is happening in spite of some of the radical changes, which includes customers, that we had to make."
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