Cherokee International Corp. (NASDAQ:CHRK) announced its financial results for the quarter ended March 31, 2006. Net sales for the first quarter of 2006 totaled $36.1 million; up 13% compared to $32.0 million for the first quarter of 2005, and up sequentially 11% compared to $32.7 million for the fourth quarter of 2005. Net income for the first quarter of 2006 was $0.8 million, or $0.04 per diluted share, compared to net income of $0.6 million, or $0.03 per diluted share, for the first quarter a year ago, and grew sequentially from net income of $78,000 or $0.00 per diluted share, for the fourth quarter of 2005.
First quarter net sales reflect an increase in telecom revenues for the quarter. Gross profit for the quarter was $8.5 million; up 11% compared to $7.6 million for the first quarter 2005. Gross margin for the first quarter was 23.6%, essentially flat from the 23.9% realized in the first quarter of 2005 and improved 440 basis points from 19.2% in the fourth quarter of 2005. Operating expenses were $6.6 million for the quarter compared to $6.0 million for the fourth quarter of 2005. The fourth quarter of 2005 included a final payment of $0.4 million of insurance gains. The company remains committed to actively managing its operating expenses.
"We are very pleased with our operating results, both top and bottom line for the quarter," commented Jeffrey M. Frank, Cherokee's Chief Executive Officer. "Besides our second quarter in a row of double digit growth, we have actively improved our working capital results based on successful execution of a variety of initiatives."
