National Wine & Spirits said yesterday (10 November) that it had seen a rise in second quarter revenues, although operating income was flat and the company saw a fall in net income.

The US wines and spirits distributor reported unaudited second quarter revenues of US$166.8m versus US$130.6m during the prior year's quarter. Operating income was US$3.7m, equal to the prior year's quarter but net income fell to US$0.8m from US$3.9m from a year before.

Revenues in the first six months reached US$332.9m, up from US$275.3m in the first six months of last year. Operating income was also up to US$8.0m from US$6.4m but net income fell to US$3.2m from US$4.0m in the prior year.

"The company's expanded brand representation in Illinois resulted in greater revenue and case volume during the quarter ended 30 September, while operating income remained stable with the prior year's comparable quarter. The company's net income and EBITDA were below the prior year's quarter primarily due to the receipt of an arbitration award of US$2.3m during September 2004. Product sales revenue increased US$35.9m during the quarter ended 30 September, compared to the prior year's comparable quarter," a statement said.

The company's long term debt increased US$36.8m from 31 March due to increased working capital needs of US$24.3m in the product sales segment and the funding of a US$14.9m deposit made in connection with a proposed acquisition of L & L Wine and Liquor Corporation, a Michigan wine wholesaler.

Working capital increased primarily due to the acquisition of certain assets of Johnson Brothers' wholesale wine and spirits business in Illinois which was completed on 1 August.