Quaker sales plunge 26.9%
By Janice Chamberlain -- Furniture Today, October 19, 2005
Fall River, Mass. — Challenged by rising energy costs, strong competition from leather and faux suede imports and falling consumer confidence, Quaker Fabric said third-quarter sales plunged 26.9% and its net loss more than tripled.
The upholstery fabric supplier posted sales of $46.5 million in the quarter ended Oct. 1, compared with sales of $63.6 million in 2004's third quarter. The net loss came to $7.2 million.
The latest quarter included charges for restructuring, asset impairment and plant relocation expenses. Excluding these charges and expenses, the net loss for the quarter was $3.1 million.
Sales in the nine months were $174.6 million, down 21.1% from year-earlier results. Quaker recorded a net loss of $20.6 million in the latest nine months, measured against a net loss of $172,000 in the comparable 2004 period. Excluding special charges and credits, the net loss in the 2005 nine months was $8.2 million.
President and CEO Larry Liebenow said, "Restructuring Quaker's operations in order to restore the company to profitability remains our top priority. To that end, during the third quarter we implemented approximately $17 million of additional cost-cutting measures, on an annualized basis, including further staffing reductions directly affecting about 160 company employees and a reduction of approximately $3 million in our annualized SG&A (selling, general and administrative) costs.
"These cuts bring aggregate planned reductions in the company's cost structure since the second quarter of last year to approximately $46 million on an annualized basis."
During a conference call with analysts, Liebenow said the company had implemented a 15-cent per yard surcharge on future shipments to compensate for some of the significant increases in raw material and energy costs. He said the company would aggressively attack costs during the rest of this year.
Liebenow said Quaker was pursuing a number of new product and market initiatives intended to strengthen revenues, including the introduction of its first collection manufactured outside the United States.
Quaker also plans to launch an extensive line of products for the outdoor market at the beginning of next year, he said.
| Quaker Fabric | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 10/1 | 2005 | 2004 | Change |
| (a) Includes pretax restructuring and asset impairment charges of $6 million in the 2005 quarter and $9.7 million in the 2005 nine months and income tax benefits of $4.1 million in the 2005 quarter and $10.4 million in the 2005 nine months. The 2005 nine months also includes a $5.4 million pretax charge for goodwill impairment and a $2.2 million pretax charge for the early extinguishment of debt. (b) Includes income tax benefits of $1.2 million in the 2004 quarter and $94,000 in the 2004 nine months. (c) Based on average shares outstanding of 16.83 million in the 2005 periods and 16.82 million in the 2004 periods. | |||
| Sales | $46,457,000 | $63,585,000 | (26.9%) |
| Operating income | (4,458,000) | (2,470,000) | — |
| Net income | (a)(7,155,000) | (b)(2,128,000) | — |
| Earnings per share (c) | (0.43) | (0.13) | — |
| 9 months ended 10/1 | 2005 | 2004 | Change |
| Sales | $174,557,000 | $221,101,000 | (21.1%) |
| Operating income | (11,358,000) | 2,218,000 | — |
| Net income | (a)(20,587,000) | (b)(172,000) | — |
| Earnings per share (c) | (1.22) | (0.01) | — |
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Quaker sales plunge 26.9%
Oct 20, 2005 -
Quaker posts larger 4Q loss as sales sink 26.3%
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