JACKSON, MI – EMS provider Sparton Corp. reported record fiscal 2008 first quarter sales of $58.9 million, up 22% from last year. The net loss narrowed to $1.4 million, from $2.5 million a year ago.

The quarter included a $1.6 million writeoff of inventory previously carried as a deferred asset. The writeoff came after an appeals court reversed an earlier ruling in Sparton’s favor. In a press statement, Sparton said it “continues to believe strongly in the merits of its claim for the recovery of these costs and is currently analyzing its options, which may include further appeal.”

Gross profit margin was 2.7%, up from 1.5% last year. Gross profit was reduced by 2.8% due to the $1.6 million charge.

During the quarter, government sales increased 189%, due to successful sonobuoy testing, but at no or minimal margins. Medical/scientific instrumentation sales rose 29%.

The company expects sonobuoy margins to improve in future quarters.