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Market & competition affect upholstery maker Quaker's Q2 result

29 Jul '05

5 min read

International fabric sales, at $8.4 million for the quarter, essentially held their own in comparison to last year, and yarn sales, at $10.2 million for the quarter, continued to show significant growth.

New orders during the second quarter were down 18.2 percent, and they ended the quarter with an order backlog valued at approximately $15.4 million, compared to $14.6 million at year-end 2004 and $21.6 million at the end of last year's second quarter," commented Larry Liebenow, Quaker's President and CEO.

"Despite a slight pick-up in their gross margin percentage during the second quarter, declining sales, together with higher energy and raw material costs - in particular, costs related to the problems they had earlier in the year ensuring a reliable supply of acrylic yarns and fibers - continued to take their toll on their margin performance, and it is clear that they still have considerable work to do when it comes to getting their margins back to where they need to be.

In addition, their second quarter operating margin reflects approximately $9.4 million of asset impairment and restructuring expenses, including a $5.4 million write-off of goodwill and a $3.7 million asset impairment charge.

A $2.2 million charge related to the prepayment of debt in connection with their May refinancing effort, various banking and professional fees related to that deal and certain charges associated with the reduction in force they completed in June were also recorded during the quarter," Mr. Liebenow included a.

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