Foamex International Inc. Reports First Quarter Results
LINWOOD, Pa.--May 3, 2001--Foamex International Inc. , the leading manufacturer of flexible polyurethane and advanced polymer foam products in North America, today announced financial results for its first quarter, which ended March 31, 2001.President and Chief Executive Officer John Televantos said, "Our successful efforts in several critical areas enabled us to achieve stable operating results for the quarter despite a difficult economic environment. Our gross profit was sustained by an improved business mix, cost reductions, and higher selling prices which partially offset earlier raw material cost increases. Continuing expense reduction programs further enhanced operating income, while lower debt levels reduced interest expense."
Foamex reported net sales for the quarter of $301.9 million, a decrease of 8.3% over the $329.1 million reported in the prior year period.
Gross profit was $42.2 million, or 14.0% of sales, compared with $42.9 million, or 13.0% of sales, in the first quarter of 2000.
SG&A expense was $16.9 million, a decrease of 8.1% from $18.4 million in the prior year quarter.
Excluding restructuring and other charges, operating income for the quarter increased 3.1%, to $25.3 million from $24.5 million in the first quarter of last year. Foamex posted restructuring and other charges of $0.03 million in the first quarter of 2001, consisting of severance expenses partially offset by adjustments to prior year restructuring estimates for lease runout costs. Restructuring and other charges in the first quarter of 2000 were $3.2 million, primarily for costs related to plant closings and consolidations. Including those charges, operating income was $25.3 million in the first quarter of this year and $21.3 million in the prior year quarter.
Interest and debt issuance expense for the quarter was $17.7 million, a 5.0% decrease from $18.6 million in the first quarter of last year, primarily because of reduced debt levels.
The provision for income taxes was $1.3 million, compared with $0.2 million in the same quarter of 2000. The effective tax rate increased over the prior year period primarily because of the tax impact of foreign operations.
Net income for the quarter was $6.3 million or $0.25 per diluted share, compared with $1.8 million or $0.07 per diluted share for the first quarter of 2000.
EBDAIT increased to $33.8 million, compared with $33.5 million in the first quarter of last year.
"This is our ninth consecutive quarter of stable EBDAIT levels in spite of a weak economy," Televantos noted. "We reduced debt by $14 million during the quarter, taking it below the $700 million level. We are maintaining our intense focus on cost reduction, expense control and cash generation to further strengthen our financial structure."
Foamex Chairman Marshall S. Cogan said, "We believe our strategy, combined with innovative new products and our proprietary manufacturing capability, will enable us to maximize our performance in a challenging economy and to achieve differential growth in sales and earnings over the longer term. However, if the economic environment remains soft, we will have a difficult time showing earnings growth for the year."
Foamex International Inc. and Subsidiaries
Consolidated Statements of Operations
($ Thousands, except EPS data)
1st Quarter % Change
Comparative Favorable/
2001 2000 (Unfavorable)
---- ---- -------------
Net Sales (a) $301,907 $329,119 (8.3%)
Gross Profit 42,204 42,936 (1.7%)
Selling, General
& Administrative Expense 16,923 18,422 8.1%
Restructuring and Other Charges 29 3,222
-- -----
Income from Operations 25,252 21,292 18.6%
Interest and Debt
Issuance Expense 17,694 18,629
Income from Equity Interest
in Joint Venture 200 292
Other Expense, Net (162) (931)
----- -----
Income Before Provision
for Income Taxes 7,596 2,024
Provision for Income Taxes 1,269 241
----- ---
Net Income $6,327 $1,783
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EBDAIT (b) $33,755 $33,522
======= =======
Earnings Per Share:
Basic Earnings Per Share $0.27 $0.07
===== =====
Weighted Average Shares
Outstanding (c) 23,560 25,058
====== ======
Diluted Earnings Per Share $0.25 $0.07
===== =====
Weighted Average Shares
Outstanding (c) 25,073 25,456
====== ======
Notes appear on page 5.
Foamex L.P. and Subsidiaries
Selective Comparative Financial Data
($ Thousands)
1st Quarter
Comparative
2001 2000
---- ----
Net Sales $281,314 $305,520
Income from Operations 23,125 19,440
% of Sales 8.2% 6.4%
EBDAIT (b) $30,835 $30,553
% of Sales 11.0% 10.0%
Notes to Consolidated Statements of Operations
and Selective Comparative Financial Data
a) In response to an accounting pronouncement issued in 2000, net
sales for the first quarter of 2000 include the reclassification
of certain freight costs that were previously reported in cost of
goods sold.
b) EBDAIT consists of earnings before depreciation, amortization,
interest, income taxes, restructuring and other charges and
non-operating income and expense. EBDAIT is not intended to
represent cash flow for the period.
c) During the fourth quarter of 2000, the Company issued 15,000
shares of Series B Convertible Preferred Stock in exchange for
1,500,000 shares of the Company's common stock.
Foamex International Inc. and Foamex L.P.
Selected Financial Information
Quarter Ended March 31, 2001
($ Millions)
Foamex Foamex
International Inc. L.P.
------------------ ---------
Cash and Cash Equivalents $ 3.7 $ 1.9
Accounts Receivable, Net 190 157
Inventories 103 99
Accounts Payable 120 115
Total Debt 698 653
Current Portion 20.9 7.7
Borrowing Capacity 37.8 22.8
Depreciation and Amortization Expense 8.3 7.6
Capital Expenditures 5.4 5.4
Interest and Debt Issuance Expense 17.7 16.4
Cash Portion 17.4 16.4