Eyeing a bigger slice of the U.S. market, Interceramic logs record Q1 results
Consolidated sales for the quarter of $69.9 million were fueled by continued strength in Mexico, where sales of $41.9 million came in 14% higher than the year-earlier period. The company also said it already benefiting from the strategic agreement it established last year with Wisconsin-based Kohler Co. that allows Interceramic to distribute Kohler products in Mexico. Sales of Kohler bathroom and kitchen fixtures are “exceeding management expectations,” Interceramic said.
During the first quarter, the company opened a second facility in central Mexico for the manufacture and distribution of installation materials, such as adhesives and grouts, as part of a joint venture with Custom Building Products. The additional plant more than doubled the company’s capacity and, the company said, “will allow us to reduce the shipping costs associated with these low-cost, high-weight products to our distributors in the southern portion of the country.”
International sales of $28.0 million in the quarter lagged first quarter 2000 results by about 3% but were more than 6% greater than fourth quarter 2000 international sales – a signal, Interceramic said, that the company recovering ground in the U.S. markets.
In response to a slowing world economy, Interceramic reduced its workforce by roughly 18% between the first quarter of 2000 and the first quarter of this year. As a result, sales per employee for the quarter came in 29% higher than the same quarter in 2000 and operating income per employee increased more than 32% over the comparable period.
At $7.7 million, operating income for the first quarter of 2001 grew by almost 9% over operating income of $7.1 million in the first quarter of 2000, giving the company an operating margin of about 11%.
First quarter 2001 EBITDA of $11.1 million was approximately 6% higher than EBITDA of US $10.5 million in the first quarter of 2000. For the 12 months ending March 31, 2001, the company recorded EBITDA of $40.7 million which topped the US $37.7 million EBITDA for the year-earlier period by 8%.
To further reduce employee costs and refocus it international efforts, several top management positions in the United States were eliminated in recent weeks and the company said it has begun developing a revamped international strategy that will be implemented over the coming months.
“With the growing consumption of ceramic tile in the United States over the past year, it is imperative that the company insert itself firmly as a key-player in the International markets to capitalize on the overall growth in the industry,” Interceramic said in a written statement.