While sales are down, profits are up at the Handleman Co. The Troy, Mich.-based wholesaler reports $21.1 million in net income, or 86 cents per share, on revenues of $443.9 million in its fiscal third

While sales are down, profits are up at the Handleman Co. The Troy, Mich.-based wholesaler reports $21.1 million in net income, or 86 cents per share, on revenues of $443.9 million in its fiscal third quarter, which ended Jan. 31. In the same period a year earlier, Handleman posted $3.5 million in net income, or 13 cents per share, on sales of $450.5 million. But the earlier period also included a charge of $17.1 million for impairment of subsidiary assets.

After adjusting its numbers to exclude the financials of Madacy Entertainment, which was sold in fiscal 2003, and Anchor Bay, sold Nov. 1, 2003 (fiscal 2004), Handleman's continuing operations produced a gross margin of 19.6% of revenue in the third quarter, against selling, general, and administrative expenses of 12.1% of revenue. This allowed it to realize $37.8 million in earnings before interest, taxes, depreciation, and amortization, about the same amount it had in the previous fiscal third quarter.

For the nine-month period (39 weeks) ended Jan. 31., Handleman reports net income of $33 million on sales of $919.1 million, vs. net income of $19.8 million on sales of $1 billion in the corresponding period in the previous year (of 40 weeks).

In forecasting it fiscal fourth-quarter results, the company expects to produce earnings from continuing operations of about 22 cents per share on sales of $261 million.

Handleman stock closed today (Feb. 24) up 19 cents at $20.99.