Slide 15 of 23
Notes:
- As a result this stronger balance sheet, our improved cost structure, and the steps we’re taking to accelerate our sales growth, we expect to see significant improvement in our margins, cash flow and overall returns.
- As I mentioned before, when we look at profitability and margin, we focus on EBIT more than operating income because EBIT includes the profit generated by our joint ventures.
- For fiscal ’03, EBIT was $48.9 million, or 10.8% of net revenue. If, however, you were to add back the effect of the year’s restructuring charges, inventory step-up, and fixed asset sales, the EBIT margin would have been closer to 15%
- In fiscal ’07, we expect to achieve an EBIT margin of 22%. As you can see here, the incremental 700 basis points will come from the strategies I’ve been describing: a combination of higher sales, lower product and operating costs, and increased volume leverage.
