Foamex takes $110M charge
By Furniture Today Staff -- Furniture Today, November 14, 2004
Linwood, Pa. — Foam supplier Foamex said sales for its third fiscal quarter were off 4.2% from the comparable 2003 quarter, to $310 million. Sales in the company's foam products division, however, rose 2% to $140 million.
The net loss for the quarter ended Sept. 26 was $114.5 million compared with a loss of $11 million a year ago. The latest quarter included $110.2 million in income tax charges, measured against a $3.4 million income tax benefit in the third quarter of 2003. The charge in the 2004 quarter results from Foamex's decision to establish a valuation allowance against its deferred tax assets.
In a conference call with analysts, Foamex President and CEO Tom Chorman said the market environment "continues to remain difficult."
Chorman said the rising costs of chemicals negatively affected gross margins in the quarter, and that Foamex is aggressively pursuing price increases to recover its cost increases. The company's gross margin in the latest quarter was 10.7% compared with 11.5% a year ago.
For the first nine months of the year, Foamex's sales dipped 5.2% to $937.8 million, with foam products division sales up 6% to $400.5 million.
Foamex posted a net loss of $119.2 million, including the one-time income tax charge, for the first three quarters compared with a loss of $18 million in the 2003 period.
| Foamex International | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/26 | 2004 | 2003 | Change |
| (a) Includes pretax restructuring charges of $78,000 in the 2004 quarter and $2.3 million in the 2004 nine months. (b) Includes income tax benefits of $3.4 million in the 2003 quarter and $5.3 million in the 2003 nine months. The 2003 quarter also includes a $314,000 pretax restructuring charge and the 2003 nine months also includes a $1.2 million pretax restructuring credit. | |||
| Sales | $309,993,000 | $323,542,000 | (4.2%) |
| Operating income | 14,959,000 | 17,952,000 | (16.7%) |
| Net income | (a)(114,501,000) | (b)(10,999,000) | — |
| Earnings per share | (4.68) | (0.45) | — |
| 9 months ended 9/26 | 2004 | 2003 | Change |
| Sales | $937,751,000 | $989,330,000 | (5.2%) |
| Operating income | 47,107,000 | 46,949,000 | 0.3% |
| Net income | (a)(119,233,000) | (b)(17,976,000) | — |
| Earnings per share | (4.88) | (0.74) | — |
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Foamex takes $110M charge
Nov 15, 2004
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