Leading Brands has pulled itself out of a loss for its second quarter, despite a fall in revenues over the same period last year as it finished a cost-cutting programme.

The US beverage group said it generated after tax (non-cash) net income of US$809,000 or $0.04 per share versus a net loss of $291,000 or $0.01 per share during the second quarter of last year.

However, gross revenue for the quarter was $6,624,000, down from $9,562,000 last year - a year over year decrease of 30.7%. Leading Brands noted that this past quarter was the first one in which it no longer distributed its low margin legacy food products, instead concentrating on its core healthy branded beverages.

SG&A expenses were reduced 41% from the same period last year and are now at a relatively stable and sustainable level, it added.

Gross profit margin (before discounts and slotting fees) for the quarter was 52.7%, up from 44.1% in Q1 and 43.2% in the same period of fiscal 2008. The increases in gross margin percentage were the result, most notably, of a decrease in the company's input costs combined with an enhanced product mix and overall gains from improved business practices and efficiencies.

Net income for the first half of the year was $1,012,000 versus a net loss of $849,000 in the same period last year, a positive swing of $1,861,000. Year to date gross revenue was $12,523,000, down from $18,926,000 in the first half of fiscal 2008.

The company said: "The past 18 months have been hard and frustrating ones for the company as it moved decisively in anticipation of the global economic downturn. Management has been determined to reduce overheads, increase efficiencies, shed less profitable product lines and ultimately refine the company's core premium beverage portfolio.

"As evidenced by these results that task is now complete, leaving the company re-positioned to execute in an evolved marketplace."

The company said it has not yet commenced its recently announced share re-purchase programme, pending release of these results. It intends to do so in the near term.