Foamex International announces first quarter 2003 results
Sequentially, first quarter gross margin of 9.5 percent was higher than the 8.5 percent reported in the fourth quarter of 2002, primarily reflecting the implementation of selling price increases. Net loss for the quarter was $8.1 million, or $0.33 per diluted share, compared with a net loss of $67.5 million, or $2.56 per diluted share in the first quarter of 2002. The 2002 first quarter included a $70.6 million charge for the cumulative effect of accounting changes related to goodwill.
Income from operations was $10.8 million for the first quarter of 2003, compared to $21.5 million in the first quarter of 2002. The company experienced higher manufacturing costs, resulting primarily from increased raw material costs, and an increase in selling, general and administrative expenses versus the first quarter of 2002. Sequentially, selling, general and administrative expenses were down $5 million or 20 percent from the fourth quarter of 2002 due to the impact of cost containment initiatives.
Interest and debt issuance expense for the first quarter was $19.1 million, an increase of nearly 3 percent from the 2002 quarter, due to higher average debt levels, interest rates and amortization of debt issuance costs. The 2002 quarter includes a $4.3 million charge for the write off of debt issuance costs previously reported as an extraordinary item. The company was in compliance with the financial covenants under the Foamex L.P. credit facility at the end of the first quarter 2003.
Foam Products net sales for the first quarter were $118.1 million, up marginally from $117.5 million in the first quarter of 2002. Income from operations for the first quarter was $2.2 million, as compared to $9.8 million in the first quarter of 2002. The decrease primarily reflects the higher cost of raw materials and higher operating costs associated with plant shutdowns and the resulting business realignment. However, the first quarter of 2003 shows improvement from the fourth quarter of 2002, largely due to selling price increases.
Carpet Cushion Products net sales for the first quarter were $48.9 million, down 7 percent from the first quarter of 2002. The decrease is primarily due to a decline in volume. Loss from operations in the first quarter was $3.1 million, essentially flat from the same period of 2002. Sequentially, the loss from operations improved $0.4 million from the fourth quarter of 2002, primarily as a result of the selling price increase initiated last year.