Linwood, PA, Mar. 2--Foamex International Inc. today announced its 2003 fourth quarter and full-year financial results.
Net sales for the fourth quarter were $315.2 million, down 4% from $327.3 million in the fourth quarter of 2002 primarily due to lower sales in automotive and carpet cushion products, partially offset by stronger sales in Foam Products.
Gross profit was $37.1 million in 2003, compared to $28.3 million in the fourth quarter of 2002. The increase in gross profit is primarily due to the effect over the year of customer price increases and cost savings initiatives implemented in response to the chemical cost increases experienced in the second half of 2002.
Gross profit as a percentage of sales in the quarter increased to 11.8% from 8.6% in the 2002 quarter, and has grown sequentially in each quarter during 2003.
Foamex had a net loss for the fourth quarter of $3.5 million, or $0.14 per diluted share, compared to a net loss of $16.4 million, or $0.67 per diluted share, in the fourth quarter of 2002.
Income from operations was $14.7 million for the 2003 fourth quarter, compared to a loss from operations of $7.2 million in the fourth quarter of 2002, which included restructuring, impairment and other charges of $10.0 million. The lower year over year sales were more than offset by the impact of higher selling prices, lower manufacturing costs and lower selling, general and administrative expenses as compared to the fourth quarter of 2002.
Interest and debt issuance expense for the 2003 quarter was $18.3 million, compared to $18.5 million in the fourth quarter of 2002.
Commenting on the results and on the financial outlook for Foamex, Tom Chorman, President and Chief Executive Officer, said, "Our results were in line with the guidance we provided at the end of the third quarter, and we will continue to operate in a challenging environment in the near term. While we have made progress in improving our gross margin and reducing our overhead in response to the extraordinary increase in our chemical costs in the second half of 2002, we need to address several key areas to keep this momentum going."
Chorman continued, "Our strategic plan is focused on consistently increasing Foamex's market share, improving our supply chain efficiency, and managing raw material costs. We are also closely monitoring and reducing manufacturing and overhead costs, developing new and more consumer-focused products, and prudently entering new markets that offer increased profit potential. While we have a lot of work yet ahead of us, I expect Foamex to show improved operating performance as the year progresses and we pursue our longer-term goals of generating sufficient cash flow to pay down debt."
Net sales for 2003 were $1.305 billion, down 2% from $1.328 billion in 2002 due to volume reductions as a result of plant closures and exiting unprofitable business and the loss of some business in the automotive sector. Gross profit was $143.7 million in both periods, with margins improving to 11.0% of sales, compared to 10.8% of sales in 2002 due to higher selling prices, partially offset by lower volumes.
Income from operations increased 42% to $62.9 million in 2003, compared to $44.2 million in 2002, due to gross margin improvements and an almost 13% reduction in selling, general and administrative expenses. The current year included $1.8 million of restructuring, impairment and other credits compared to $4.8 million of charges in 2002.
