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Quaker Loses $25.4 Million in 2005
By Home Furnishings Business in on February 2006
Quaker Fabric Corp. reported a $4.8 million loss in fourth-quarter 2005 on sales of $50.1 million, compared to a $1.9 million loss on $68 million in sales during the prior-year period.
For fiscal 2005, the leading woven upholstery manufacturer and largest jacquard producer in the world had sales of $224.7 million and a loss of $25.4 million, compared to $289.1 million in sales and a $2 million loss in 2004.
"Last year was a major disappointment for Quaker. Our biggest problem was sales," said Larry Liebenow, president and CEO. "The continued strength of imported leather, faux suede and woven fabrics in the U.S. market led to a 22.3 percent fall-off in our total revenues -- with domestic and international fabric sales for the year of $173.6 million and $29.3 million, down 25.4 percent and 18.4 percent, respectively."
Net yarn sales, he added, were up 6.7 percent to $21.8 million for the first eight months of 2005, but craft yarn orders slowed in September and remained weak.
Liebenow said the company did achieve some important objectives in 2005: an annualized cost-structure reduction of $40 million; consolidation of four manufacturing and warehousing facilities into a fifth location; a new senior secured credit facility; total funded debt reduction of $2.1 million; and a price increase in March and surcharge in October to offset increases in energy and raw material costs.
"At the end of the day, however, the 22.3 percent drop in our revenues outpaced the cost reduction measures we were able to implement," Liebenow said.
In 2006, Liebenow said Quaker would focus on stabilizing revenues from its core domestic residential business, while complementing that with new products, including the launch of its first sourced fabric collections; development of outdoor and contract fabrics best-produced domestically; and continued cost reduction through consolidating operations in its Fall River, Mass., operations.