Foamex reports softening financial results, stays the course on debt reduction
“We generated solid results given the challenging economic environment during the second half of the year,” said Foamex president and CEO John Televantos. “Despite continuing cost and pricing pressures, we generated sufficient cash to stay on track with our debt reduction program.”
The company's consolidated debt at Dec. 31, 2000 was $711.9 million, a reduction of $33.4 million from the prior year end, and $88.5 million below the December 1998 level.
Net sales for the year were $1.258 billion, a decrease of 2.8% from record 1999 sales of $1.295 billion. Gross profit in 2000 was $172.0 million, a decrease of 4.6% from $180.3 million in 1999. Gross profit as a percent of sales was 13.7% in 2000 compared with 13.9% in 1999.
Operating income was $96.5 million, a 3.7% increase over $93.1 million in 1999. Excluding restructuring and other charges, operating income for 2000 was $102.7 million, a decrease of 0.8% from $103.5 million in 1999. The company recorded restructuring and other charges of $6.3 million in 2000, principally for severance costs and plant consolidations. In 1999, restructuring and other charges were $10.5 million, primarily for severance costs, plant consolidations and closure of the company's New York office.
Net income for 2000 was $17.0 million, and diluted earnings per share were 67 cents, compared with net income of $19.7 million, or 78 cents per diluted share in 1999. Foamex reported EBDAIT of $141.0 million in 2000, an increase of 0.8% over the $139.8 million in 1999.
Net sales for the fourth quarter of 2000 were $296.3 million, down 7.6% from $320.6 million in the prior year period. Gross profit declined 17.1%, to $36.6 million in 2000 from $44.1 million in 1999. Gross profit as a percent of sales declined to 12.3% in 2000 from 13.8% in 1999.
Operating income was $21.5 million for the quarter, a decrease of 9.3% from $23.8 million in the fourth quarter of 1999. This performance includes restructuring and other charges of $0.2 million in the fourth quarter of 2000 compared with $0.4 million in the prior-year quarter. EBDAIT for the fourth quarter of 2000 was $32.3 million compared with $34.6 million for the fourth quarter of 1999.
“The first half of 2001 will be challenging due to continued pressure from raw material and energy costs and softened demand in many of our business sectors, particularly automotive,” Televantos noted. “We have redoubled our efforts in improving efficiency and in accelerating important new product introductions and new product sales. I'm confident that our actions, combined with the anticipated recovery in the second half of the year, will enable us to capitalize on (our) strengths to enhance our industry leadership position.”