Foamex 4Q net loss soars
By Janice Chamberlain -- Furniture Today, April 25, 2005
Linwood, Pa. — Pummeled by price increases from its suppliers, Foamex International reported a net loss in the fourth quarter more than three times that of the year-earlier quarter, despite a 4.3% sales increase.
The major foam supplier said sales in the quarter ended Jan. 2 were $328.6 million, up from $315.2 million in the final quarter of 2003. The net loss in the latest quarter was $15 million, compared with a net loss of $3.5 million a year earlier.
Sales for all of 2004 slipped 2.9% to $1.27 billion from $1.3 billion in 2003. The net loss in 2004 burgeoned to $150.9 million from $21.5 million in 2003.
In a conference call with analysts, Foamex President and CEO Tom Chorman cited the time lag between when the company received price increases from its raw material suppliers and when the foam company could pass them on to its customers.
"This was a difficult quarter and year for the company," he said. "We experienced significant increases in the cost of our chemical raw materials in the second half of the year, which had a clear adverse impact on our near-term results, and overshadowed positive year-to-year revenue and profit trends in several businesses.
"We are aggressively implementing customer price increases and tightening spending to manage through this current difficult environment, while adhering to the strategies that will create long-term financial improvement."
Chorman said the company's performance was "not acceptable," but added that it was indicative of the difficult environment during the second half of last year.
Foamex said that all the company's businesses but the automotive products segment experienced sales growth in the latest quarter and year.
Sales in the foam products segment were up 17% in the quarter and 9% for the year, compared with their comparable year-earlier periods.
Fourth-quarter foam products sales increased to $151 million, which the company attributed to pricing initiatives and improved product mix. Annual sales in this segment grew to $551.4 million from $507.6 million in the prior year, primarily as a result of increased volumes of value-added products and higher selling prices.
| Foamex International | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 1/2 | 2005 | 2004 | Change |
| (a) Includes pretax restructuring, impairment and other charges of $928,000 in the 2005 quarter and $3.2 million in the 2005 year. (b) Includes pretax restructuring, impairment and other credits of $522,000 in the 2004 quarter and $1.8 million in the 2004 year and income tax benefits of $701,000 in the quarter and $6 million in the 2004 year. (c) Based on average shares outstanding of 24.45 million in the 2005 quarter, 24.4 million in the 2004 quarter, 24.44 million in the 2005 year and 24.39 million in the 2004 year. | |||
| Sales | $328,643,000 | $315,230,000 | 4.3% |
| Operating income | 6,745,000 | 14,153,000 | (52.3%) |
| Net income | (a)(14,967,000) | (b)(3,513,000) | — |
| Earnings per share (c) | (0.61) | (0.14) | — |
| Year ended 1/2 | 2005 | 2004 | Change |
| Sales | $1,266,394,000 | $1,304,560,000 | (2.9%) |
| Operating income | 53,852,000 | 61,102,000 | (11.9%) |
| Net income | (a)(150,933,000) | (b)(21,489,000) | — |
| Earnings per share (c) | (6.17) | (0.88) | — |
