Linwood, PA, Nov. 11--Foamex International Inc. today announced results for the third quarter and year-to-date period ended September 28.
Net sales for the third quarter were $321.5 million, down 5.7% from $340.8 million in the third quarter of a year ago. Gross profit was $37.5 million, or 11.7% of sales, in 2003, compared to $30.8 million, or 9.0% of sales, in 2002, primarily reflecting improved operating efficiencies and selling price increases to customers, which has allowed the company to recover a substantial portion of the increases in the cost of its major chemical raw materials.
Foamex reported a net loss for the quarter of $11.1 million, or $0.45 per diluted share. This compares with a net loss of $7.2 million, or $0.30 per diluted share in the third quarter of 2002. The 2003 quarter includes a write-off of debt issuance costs of $12.9 million associated with the previously announced refinancing of Foamex's bank credit.
Income from operations was $18.6 million for the third quarter, which represents an increase from the $4.7 million reported in the third quarter of 2002. Results for the 2002 period included a net restructuring, impairment and other credit of $3.7 million. Selling, general, and administrative expenses in the quarter were $19.3 million, down $10.4 million, or 35.1% from the 2002 quarter, due primarily to lower employee related costs and fees associated with terminated deal costs in the 2002 period. Interest and debt issuance expense for the third quarter was $31.6 million including the aforementioned write-off of debt issuance costs, an increase of 106.8% from the 2002 quarter.
Commenting on the results, Tom Chorman, President and Chief Executive Officer of Foamex, said: "We have stabilized and strengthened our business operations while operating in a difficult environment. Our gross margin improvement reflects the results of our turnaround plan. In particular, I am pleased to note that this is Foamex's fourth consecutive quarter of reduced SG&A expense.
"We continue to take aggressive steps to improve our financial performance, and are now focusing on new business opportunities and strengthening our existing customer relationships. While we still have a lot of work ahead of us, I am optimistic that Foamex has turned the corner and that our continued efforts will lead to improved profitability and sales growth in the future."
Carpet Cushion Products net sales for the third quarter were $54.1 million, down 11.4% from the third quarter of 2002 due to lower volume related to facility closures and a strategic refocusing of this business for improved profitability, partially offset by an increase in selling prices. Loss from operations in the third quarter was $0.2 million, compared to a $4.7 million loss in the same period of 2002.
For the three quarters ended September 28, Carpet Cushion Products net sales decreased 9.7% to $157.4 million from $174.3 in the same period one year ago. Loss from operations was $3.6 million in the three quarters ended September 28, 2003, compared to a $9.0 million loss during the same period in 2002. This improvement was primarily due to cost containment from the streamlining of operations and higher selling prices.
