Quaker Fabric Reports Record First Quarter Sales -- Defying Industry Trends

Apr 16, 2001, 01:00 ET from Quaker Fabric Corporation

    FALL RIVER, Mass., April 16 /PRNewswire/ -- QUAKER FABRIC CORPORATION
 (Nasdaq: QFAB) today reported net sales of $79.8 million, net income of $3.1
 million, and diluted earnings per share of $0.19 for the three-month period
 ended March 31, 2001; compared to net sales of $75.2 million, net income of
 $2.2 million, and diluted earnings per share of $0.14 for the corresponding
 period of fiscal 2000.  Basic earnings per share for the first quarters of
 2001 and 2000 were $0.20 and $0.14, respectively.
     Larry Liebenow, Quaker's President and CEO, commented, "With domestic
 fabric sales up 9%, international sales up 11.3% and net income up 38.3%,
 fiscal 2001 is off to an excellent start -- which is particularly encouraging
 in light of overall economic conditions.  We are continuing to provide our
 customers with great products and service, enabling us to both sustain the
 momentum that culminated in last year's record sales and to achieve further
 domestic market share gains.  These gains have more than offset continued
 weakness in the retail furniture sector, and our order rate remained strong
 throughout the first quarter.  Our total production backlog at the end of the
 quarter was up about 8% in relationship to the comparable period of last
 year."
     Mr. Liebenow added, "As we move through the balance of this year, our
 focus will remain on leveraging the strategic investments we have made -- in
 products, service and people -- to continue executing our core strategy.  We
 intend to continue using our product and service advantages to make further
 market share gains in the domestic market and to further strengthen our
 position in the international market."
     Mr. Liebenow concluded, "Market orders for this month's all-important High
 Point Furniture Market are up significantly in comparison to last year's April
 Market, and we are anticipating excellent placements there later this week.
 At the same time, we are very aware that we must remain extraordinarily
 focused and efficient in light of the difficult global economic environment we
 expect to persist throughout this year.  Overall demand for upholstery fabric
 -- particularly at the promotional end of the market -- continues to be soft,
 but we expect our concentration on the middle to better-end segments to
 partially insulate us from some of those pressures.  Meanwhile, rising energy
 costs and a modest increase in our raw material prices during the first
 quarter underscore our need to remain focused on our manufacturing costs.  Our
 job is to keep Quaker strong by successfully managing the company through
 these challenges.  We are confident that the focused investments we have made
 -- coupled with responsible fiscal management -- have provided us with both
 the flexibility and the platform we need to compete vigorously, adapt to
 changing conditions, pursue other opportunities and provide our investors with
 a strong company positioned to deliver solid returns."
     Quaker Fabric Corporation is a leading manufacturer of woven upholstery
 fabrics for furniture markets in the United States and abroad, and the largest
 producer of Jacquard upholstery fabric in the world.  For the year ended
 December 30, 2000, the Company had net sales of $303 million, net income of
 $10.9 million, and diluted and basic earnings per share of $0.68 and $0.70,
 respectively.
     THIS PRESS RELEASE CONTAINS "FORWARD LOOKING STATEMENTS," AS THAT TERM IS
 DEFINED IN THE FEDERAL SECURITIES LAWS.  THE READER IS CAUTIONED THAT SUCH
 STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND THAT, AS A RESULT OF
 VARIOUS FACTORS, INCLUDING, BUT NOT LIMITED TO, THE LEVEL OF CUSTOMER DEMAND
 FOR THE COMPANY'S PRODUCTS, HIGHER THAN ANTICIPATED COSTS AND LOWER THAN
 ANTICIPATED PRODUCTION RATES, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
 PROJECTED.  FOR A FURTHER DISCUSSION OF THESE FACTORS, SEE THE COMPANY'S 2000
 FORM 10-K.
 
                             QUAKER FABRIC CORPORATION
 
                        CONSOLIDATED FINANCIAL STATEMENTS
                       (In thousands, except per share data)
 
                                STATEMENTS OF INCOME
 
                                                 First Quarter Ended
                                                     (Unaudited)
                                           Mar. 31,   Apr. 1,         Percent
                                             2001      2000            Change
 
     Net sales                             $79,836   $75,237             6.1 %
 
     Cost of products sold                  62,517    58,930
 
     Gross margin                           17,319    16,307             6.2 %
 
     Selling, general and admin. expenses   11,496    11,620
 
     Operating income                        5,823     4,687            24.2 %
 
     Other expenses
         Interest expense                    1,017     1,261
         Other expenses (income)                 4         7
 
     Income (loss) before provision for
       income taxes                          4,802     3,419            40.5 %
 
     Provision for income taxes              1,729     1,197
 
     Net income (loss)                      $3,073    $2,222            38.3 %
 
     Earnings (loss) per common share -
      basic                                  $0.20     $0.14            42.9 %
 
     Weighted average shares
       outstanding - basic                  15,724    15,690
 
     Earnings (loss) per common share -
      diluted                                $0.19     $0.14            35.7 %
 
     Weighted average shares
       outstanding - diluted                16,333    16,107
 
     Ratio analysis:
     Gross profit margin                     21.7%     21.7%
     S.G. & A. as a percentage of net
      sales                                  14.4%     15.4%
     Operating margin                         7.3%      6.2%
     Net margin                               3.8%      3.0%
 
                            CONDENSED BALANCE SHEETS
 
                                         March 31,  December 30,
                                             2001      2000
                                         (Unaudited) (Audited)
     Assets
       Current assets:
          Cash                                $560      $440
          Accounts receivable               44,892    42,735
          Inventories                       46,255    43,831
          Prepaid expenses and other
           current assets                    7,429     9,259
           Total current assets             99,136    96,265
 
       Property, plant and equipment, net  140,329   141,929
       Goodwill, net of amortization         5,577     5,625
       Other assets                          2,097     2,217
                                          $247,139  $246,036
 
     Liabilities and Stockholders' Equity
       Current liabilities                 $28,171   $29,727
       Long-term debt and capital leases    52,128    53,397
       Deferred income taxes and other
         liabilities                        25,429    24,579
       Stockholders' equity                141,411   138,333
                                          $247,139  $246,036
 
     This document contains "forward looking statements," as that term is
 defined in the federal securities laws. The reader is cautioned that such
 statements are not guarantees of future performance and that, as a result of
 various factors, including, but not limited to, the level of customer demand
 for the Company's products, higher than anticipated costs and lower than
 anticipated production rates, actual results may differ materially from those
 projected.  For a further discussion of these factors, see the Company's 2000
 10-K.
 
 

SOURCE Quaker Fabric Corporation
    FALL RIVER, Mass., April 16 /PRNewswire/ -- QUAKER FABRIC CORPORATION
 (Nasdaq: QFAB) today reported net sales of $79.8 million, net income of $3.1
 million, and diluted earnings per share of $0.19 for the three-month period
 ended March 31, 2001; compared to net sales of $75.2 million, net income of
 $2.2 million, and diluted earnings per share of $0.14 for the corresponding
 period of fiscal 2000.  Basic earnings per share for the first quarters of
 2001 and 2000 were $0.20 and $0.14, respectively.
     Larry Liebenow, Quaker's President and CEO, commented, "With domestic
 fabric sales up 9%, international sales up 11.3% and net income up 38.3%,
 fiscal 2001 is off to an excellent start -- which is particularly encouraging
 in light of overall economic conditions.  We are continuing to provide our
 customers with great products and service, enabling us to both sustain the
 momentum that culminated in last year's record sales and to achieve further
 domestic market share gains.  These gains have more than offset continued
 weakness in the retail furniture sector, and our order rate remained strong
 throughout the first quarter.  Our total production backlog at the end of the
 quarter was up about 8% in relationship to the comparable period of last
 year."
     Mr. Liebenow added, "As we move through the balance of this year, our
 focus will remain on leveraging the strategic investments we have made -- in
 products, service and people -- to continue executing our core strategy.  We
 intend to continue using our product and service advantages to make further
 market share gains in the domestic market and to further strengthen our
 position in the international market."
     Mr. Liebenow concluded, "Market orders for this month's all-important High
 Point Furniture Market are up significantly in comparison to last year's April
 Market, and we are anticipating excellent placements there later this week.
 At the same time, we are very aware that we must remain extraordinarily
 focused and efficient in light of the difficult global economic environment we
 expect to persist throughout this year.  Overall demand for upholstery fabric
 -- particularly at the promotional end of the market -- continues to be soft,
 but we expect our concentration on the middle to better-end segments to
 partially insulate us from some of those pressures.  Meanwhile, rising energy
 costs and a modest increase in our raw material prices during the first
 quarter underscore our need to remain focused on our manufacturing costs.  Our
 job is to keep Quaker strong by successfully managing the company through
 these challenges.  We are confident that the focused investments we have made
 -- coupled with responsible fiscal management -- have provided us with both
 the flexibility and the platform we need to compete vigorously, adapt to
 changing conditions, pursue other opportunities and provide our investors with
 a strong company positioned to deliver solid returns."
     Quaker Fabric Corporation is a leading manufacturer of woven upholstery
 fabrics for furniture markets in the United States and abroad, and the largest
 producer of Jacquard upholstery fabric in the world.  For the year ended
 December 30, 2000, the Company had net sales of $303 million, net income of
 $10.9 million, and diluted and basic earnings per share of $0.68 and $0.70,
 respectively.
     THIS PRESS RELEASE CONTAINS "FORWARD LOOKING STATEMENTS," AS THAT TERM IS
 DEFINED IN THE FEDERAL SECURITIES LAWS.  THE READER IS CAUTIONED THAT SUCH
 STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND THAT, AS A RESULT OF
 VARIOUS FACTORS, INCLUDING, BUT NOT LIMITED TO, THE LEVEL OF CUSTOMER DEMAND
 FOR THE COMPANY'S PRODUCTS, HIGHER THAN ANTICIPATED COSTS AND LOWER THAN
 ANTICIPATED PRODUCTION RATES, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
 PROJECTED.  FOR A FURTHER DISCUSSION OF THESE FACTORS, SEE THE COMPANY'S 2000
 FORM 10-K.
 
                             QUAKER FABRIC CORPORATION
 
                        CONSOLIDATED FINANCIAL STATEMENTS
                       (In thousands, except per share data)
 
                                STATEMENTS OF INCOME
 
                                                 First Quarter Ended
                                                     (Unaudited)
                                           Mar. 31,   Apr. 1,         Percent
                                             2001      2000            Change
 
     Net sales                             $79,836   $75,237             6.1 %
 
     Cost of products sold                  62,517    58,930
 
     Gross margin                           17,319    16,307             6.2 %
 
     Selling, general and admin. expenses   11,496    11,620
 
     Operating income                        5,823     4,687            24.2 %
 
     Other expenses
         Interest expense                    1,017     1,261
         Other expenses (income)                 4         7
 
     Income (loss) before provision for
       income taxes                          4,802     3,419            40.5 %
 
     Provision for income taxes              1,729     1,197
 
     Net income (loss)                      $3,073    $2,222            38.3 %
 
     Earnings (loss) per common share -
      basic                                  $0.20     $0.14            42.9 %
 
     Weighted average shares
       outstanding - basic                  15,724    15,690
 
     Earnings (loss) per common share -
      diluted                                $0.19     $0.14            35.7 %
 
     Weighted average shares
       outstanding - diluted                16,333    16,107
 
     Ratio analysis:
     Gross profit margin                     21.7%     21.7%
     S.G. & A. as a percentage of net
      sales                                  14.4%     15.4%
     Operating margin                         7.3%      6.2%
     Net margin                               3.8%      3.0%
 
                            CONDENSED BALANCE SHEETS
 
                                         March 31,  December 30,
                                             2001      2000
                                         (Unaudited) (Audited)
     Assets
       Current assets:
          Cash                                $560      $440
          Accounts receivable               44,892    42,735
          Inventories                       46,255    43,831
          Prepaid expenses and other
           current assets                    7,429     9,259
           Total current assets             99,136    96,265
 
       Property, plant and equipment, net  140,329   141,929
       Goodwill, net of amortization         5,577     5,625
       Other assets                          2,097     2,217
                                          $247,139  $246,036
 
     Liabilities and Stockholders' Equity
       Current liabilities                 $28,171   $29,727
       Long-term debt and capital leases    52,128    53,397
       Deferred income taxes and other
         liabilities                        25,429    24,579
       Stockholders' equity                141,411   138,333
                                          $247,139  $246,036
 
     This document contains "forward looking statements," as that term is
 defined in the federal securities laws. The reader is cautioned that such
 statements are not guarantees of future performance and that, as a result of
 various factors, including, but not limited to, the level of customer demand
 for the Company's products, higher than anticipated costs and lower than
 anticipated production rates, actual results may differ materially from those
 projected.  For a further discussion of these factors, see the Company's 2000
 10-K.
 
 SOURCE  Quaker Fabric Corporation