Quaker Fabric Reports Loss

February 26, 2007  by in UnCategorized   

By Home Furnishings Business in Upholstery on February 2007 Hurt by restructuring charges and declining sales, Quaker Fabric Corporation, Fall River, Mass., reported net sales of $32.2 million and a net loss of $12.9 million in its fourth quarter Monday. Sales declined from $50.1 million during the same period last year. The results include after-tax restructuring charges of $6.1 million and $1.3 million in after-tax expenses related to what officials called its early “extinguishment of debt and inventory” and deferred financing cost write-offs.

For the year ended Dec. 30, sales were $151.7 million—down from $224.7 million the previous year—with a net loss of $37.6 million. Excluding significant one-time charges tied to the company’s restructuring plan, the net loss for 2006 was $17.04 million or $1.03 per share.

“The market for upholstery fabric in the United States is continuing to experience unprecedented change, with imports, in a variety of forms, now representing a very large percentage of total consumption,” said Larry Liebenow, Quaker’s president and CEO. “For us, this meant a 29 percent drop in last year’s domestic fabric sales and an 18 percent drop in export fabric sales. This fall-off in our sales outpaced the speed with which we were able to take costs out of our operations. Continued implementation of our restructuring plan is intended to bring our cost structure in line with projected revenues, and we believe that the steps we took last year to reshape and restructure the company represent progress toward returning the company to profitability.”

He said the company is repositioning its marketing efforts to focus on segments such as the outdoor and contract markets that are less vulnerable to imports from China. The company has also has a strategic alliance with partner factory in China that is producing products “with widespread market acceptance,” Liebenow said.