MANKATO, MN -- EMS provider Winland Electronics reported fourth quarter revenues rose 5% to $9.2 million year-over-year, led by new customer wins and expanding sales to current customers base. The company recorded a record $37.9 million in sales for the year.

For the period ended Dec. 31, net income fell 92.4% to $51,036, compared to last year.

Gross profit for the fourth quarter was $1.5 million, or 16.1% of sales, down from $2 million or 22.5% of sales last year. The drop was due to lower margins from the company's new agreement with Select Comfort, margins received from new business, and increased costs relating to the introduction of 26 new or revised products for the quarter.

Income from operations decreased 85.1% to $131,538 compared to $885,154 for the fourth quarter last year.

For fiscal 2006, net income fell 50% to $1 million on a 24.7% rise in net sales to $37.9 million. Gross profit was $6.5 million, or 17.1% gross profit margin, versus $7.3 million (24%) for fiscal 2005. Total operating expenses rose 16.7% to $4.8 million, and operating income was down 45.8% to $1.7 million.

In a press release, chief executive Lorin Krueger said, "We are pleased to see growth in revenue in the fourth quarter over the fourth quarter in 2005; however, we did notice a softening in sales within the quarter. The most important revenue accomplishment was the increasing balance of business among our revenue base. We have seen an increase in complete product assembly, another objective of 2006."

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