Foamex cuts 4Q loss as total sales rise 5.4%
By Furniture Today Staff -- Furniture Today, March 31, 2003
Linwood, Pa. — Foam supplier Foamex International said its fourth-quarter sales of $327.3 million were up 5.4% from the year-earlier period, mainly because of gains in the automotive segment. Sales declined in foam products.
Foamex reported a net loss for the fourth quarter of $16.4 million, compared with a net loss of $29.4 million a year earlier.
Gross profits of $27.7 million were down from $41.6 million in the 2001 quarter. Foamex said the decrease primarily reflected significantly higher raw materials costs that were not fully recovered through selling price increases.
Net sales for the full year were $1.3 billion, up 6% from 2001. Income from operations, including restructuring charges, came to $41.9 million, down from $63.5 million.
Foam products sales of $112.6 million in the fourth quarter were down 4%. For the year, foam products sales were $471 million, down 6%, primarily as a result of a reduction in business from a major bedding manufacturer, the company said.
Foamex also said it implemented several initiatives in the fourth quarter to restore profitability, including price increases, a cost reduction program, and the "rationalization of unprofitable accounts." The cost reduction program, which included cuts in its executive and management staff and the closure of six operations, resulted in restructuring and other charges of $10 million in the quarter, including a non-cash impairment charge of $2.5 million.
"While we continue to face an extremely challenging business environment, we have taken aggressive steps to return the company to profitability," said Thomas Chorman, president and chief executive officer.
He added the company's major chemical suppliers have said they are raising prices another 10% to 12%. Foamex has notified its customers that it will be increasing its prices in April.
| Foamex International | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) Includes pretax restructuring, impairment and other charges of $10 million in the 2002 quarter and $4.8 million in the 2002 year and income tax benefits of $9.7 million in the 2002 quarter and $85.7 million in the 2002 year. The 2002 year also includes a $1.8 million extraordinary charge and a $70.6 million extraordinary charge, the cumulative effect of an accounting change. (b) Includes pretax restructuring, impairment and other charges of $35.9 million in the 2001 quarter and $36.1 million in the 2001 year. (c) Based on average shares outstanding of 24.4 million in the 2002 quarter, 23.7 million in the 2001 quarter, 26.3 million in the 2002 year and 23.6 million in the 2001 year. |
|||
| Sales | $327,311,000 | $310,570,000 | 5.4% |
| Operating income | 2,222,000 | 20,743,000 | (89.3%) |
| Net income | (a)(16,388,000) | (b)(29,392,000) | — |
| Earnings per share (c) | (0.67) | (1.24) | — |
| Year ended 12/31 | 2002 | 2001 | Change |
| Sales | $1,328,094,000 | $1,252,904,000 | 6.0% |
| Operating income | 46,681,000 | 99,541,000 | (53.1%) |
| Net income | (a)(9,699,000) | (b)(5,612,000) | — |
| Earnings per share (c) | (0.37) | (0.24) | — |
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