Price increases hurt Foamex
By Furniture Today Staff -- Furniture Today, November 24, 2002
Linwood, Pa. — Foam supplier Foamex reported sales were up 4.5% to $340.8 million in the third quarter from $326.2 million in 2001's comparable period.
Sales for the nine months ended Sept. 29 grew 6.2% to $1 billion from $942.3 million a year ago.
Foamex posted a $7.2 million net loss in the quarter, compared with net profits of $7.3 million a year ago. After accounting for more than $70 million in after-tax special charges, the company reported profits of $10.5 million in the nine months, compared with $23.8 million for the first nine months of 2001.
The company said gross profit was $30.1 million in the quarter, down 37% from $47.7 million last year, primarily reflecting higher raw material costs resulting from 20% to 25% increases in the prices of chemicals from major suppliers that went into effect in June, as well as higher manufacturing costs.
Foamex President and Chief Executive Officer Thomas Chorman said third-quarter results reflected both the industry-wide raw material price increases and one-time, non-recurring selling, general and administrative expenses.
"While we continue to face an extremely challenging market, we are taking aggressive steps to return the company to profitability, including implementing additional price increases to our customers," he said.
Sales in the company's foam products business segment were $121.8 million in the quarter, off 8% from third-quarter 2001 results. For the year to date, sales were down 6% to $358.4 million.
| Foamex International | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/29 | 2002 | 2001 | Change |
| (a) Includes pretax restructuring, impairment and other credits of $3.7 million in the 2002 quarter and $5.2 million in the 2002 year and income tax benefits of $3.7 million in the 2002 quarter and $77.5 million in the 2002 year. The 2002 quarter also includes an $829,000 extraordinary special charge and a $66.9 million extraordinary charge, the cumulative effect of an accounting change. (b) Includes pretax restructuring, impairment and other charges of $252,000 in the 2001 quarter and $204,000 in the 2001 year. (c) Based on average shares outstanding of 24.3 million in the 2002 quarter and 25.8 million in the 2001 quarter, 26.4 million in the 2002 year and 25.4 million in the 2001 year. |
|||
| Sales | $340,823,000 | $326,166,000 | 4.5% |
| Operating income | 314,000 | 25,704,000 | (98.8%) |
| Net income | (a)(7,242,000) | (b)7,267,000 | — |
| Earnings per share (c) | (0.30) | 0.28 | — |
| Year ended 9/29 | 2002 | 2001 | Change |
| Sales | $1,000,783,000 | $942,334,000 | 6.2% |
| Operating income | 44,459,000 | 78,798,000 | (43.6%) |
| Net income | (a)10,483,000 | (b)23,780,000 | (55.9%) |
| Earnings per share (c) | 0.40 | 0.94 | (57.4%) |
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