Linwood, PA, May 13--Foamex International Inc. the leading manufacturer of flexible polyurethane and advanced polymer foam products in North America, today announced its 2003 first quarter results.
Net sales for the first quarter were $327.8 million, up 4% from $314.1 million in the first quarter of 2002. Gross profit was $31.3 million in 2003, down 17% from $37.7 million in 2002. Sequentially, first quarter gross margin of 9.5% was higher than the 8.5% 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 $5.0 million or 20% 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% 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.
Commenting on the results, Tom Chorman, Foamex's President and Chief Executive Officer, said, "We continue to be in compliance with our bank covenants, but I am not satisfied with the performance of the business year to date. We are seeing the positive effect of our profit restoration program. Selling price increases have been implemented, employee related costs have been reduced, three stand alone plants have been closed, and we continue to manage our raw material supply chain to optimize our position in a difficult market." Chorman continued, "The economy and our operating environment continue to be challenging, but we expect to meet the commitments made to our shareholders and lenders."
