Quaker 4Q sales fall 15.4%
By Furniture Today Staff -- Furniture Today, February 27, 2005
Fall River, Mass. — Quaker Fabric sales in the fourth quarter dropped 15.4% to $68 million from $80.5 million in the comparable year-earlier period, coupled with a net loss of $1.9 million, compared with profits of $3.3 million in the final quarter of 2003.
Sales for the year were $289.1 million, off 11.1% from 2003 sales of $325.3 million. The year's net loss was $2 million, compared with 2003 profits of $7.9 million.
During a conference call with analysts, Quaker President and CEO Larry Liebenow said 2004 started off reasonably strong, but the company's performance "deteriorated as the year progressed, particularly in the second half."
He attributed part of the losses to significant investments in machinery and equipment over the years, making fixed costs relatively high and causing "any shortfalls at the top line to quickly erode margins and bottom-line profitability."
Quaker's sales in the domestic residential market were $53.8 million in the latest quarter and $232.8 million for the year, off 17.8% and 15.3%, respectively, from the comparable 2003 periods.
"This revenue loss (in the domestic residential market) reflects a continuation of intense competition in the domestic market, including market share gains from furniture coverings, particularly leather and faux suede, coming into the U.S. from Asia," said Liebenow. "The current popularity of those products at the consumer level has reduced the size of the market for the woven plain and jacquard fabrics Quaker makes."
He said the company has sought waivers from its two major financing sources to deal with covenant issues in existing loan documents, adding, "We are currently working to put new loan agreements in place consistent with our operating and financing needs."
| Quaker Fabric | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 1/1 | 2005 | 2004 | Change |
| (a) Includes income tax benefits of $3.6 million in the 2005 quarter and $3.7 million in the 2005 year. (b) Includes $1.4 million in pretax non-recurring income in both periods resulting from the settlement of a tariff dispute with Mexican tax authorities. | |||
| Sales | $68,044,000 | $80,461,000 | (15.4%) |
| Operating income | (4,658,000) | 4,636,000 | — |
| Net income | (a)(1,870,000) | (b)3,284,000 | — |
| Earnings per share | (0.11) | 0.19 | — |
| Year ended 1/1 | 2005 | 2004 | Change |
| Sales | $289,145,000 | $325,337,000 | (11.1%) |
| Operating income | (2,440,000) | 14,801,000 | — |
| Net income | (a)(2,042,000) | (b)7,939,000 | — |
| Earnings per share | (0.12) | 0.47 | — |
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