Market & competition affect upholstery maker Quaker's Q2 result

29 Jul '05

5 min read

Upholstery fabrics maker Quaker Fabric Corporation reported net sales of $68.9 million, a net loss of ($10.3 million), and diluted and basic losses per share of ($0.61) for the three-month period ended July 2, 2005; compared to net sales of $73.1 million, a net loss of ($0.5 million), and diluted and basic losses per share of ($0.03) for the corresponding period of fiscal 2004.

Quaker's financial results for the second quarter of fiscal year 2005 include after-tax asset impairment, restructuring and related charges of $9.4 million, as well as a $1.2 million tax credit related to the favorable settlement of a state income tax refund claim. Excluding these charges and tax credit, net loss for the second fiscal quarter of 2005 was ($2.1 million), or ($0.12) per diluted share.

Results of operations for the first six months of fiscal year 2005 were net sales of $128.1 million, a net loss of ($13.4 million), and diluted and basic losses per share of ($0.80); compared to net sales of $157.5 million, net income of $2.0 million, and diluted and basic earnings per share of $0.11 and $0.12, respectively, for the corresponding period of fiscal 2004.

Excluding asset impairment, restructuring and related charges and the tax credit recorded in the second quarter, net loss for the first six months of fiscal 2005 was ($5.2 million), or ($0.31) per share.

"Domestic market conditions - particularly the strength of imported leather and faux suede products, excess inventory throughout the distribution chain and the deflationary effects of heavy competition from both domestic and foreign fabric suppliers - continue to negatively affect their top-line performance, with net sales for the quarter down 5.8 percent and domestic fabric sales of $50.4 million off 13.3 percent versus last year."

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