Chihuahua, Mexico, Jan. 31—Interceramic posted another record year with sales topping $300 million, a 4.15% increase from $288 million a year ago. Increased operating expense incurred to support that sales growth took a bite out of the firm’s operating margin, which fell 13.33% to $28.5 million from $32.9 million a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) suffered as a result dipping 7.53% to $43.2 million from $46.7 million the year before.
The firm refinanced its $90 million Eurobond debt into a secured $100 million syndicated loan in the middle of the year, which reduced its interest cost. The firm’s financial ratios during the year remained excellent with a debt service coverage ratio of 4.4 at the end of the year compared to 3.6 a year ago, and a ratio of debt to EBITDA of 2.7, the same as at the end of last year.
In the fourth quarter, the firm had sales of $76.5 million, a 4.55% increase over sales of $73.1 million in the same period a year ago. Operating income sagged by almost 19%, with operating income of $6.0 million in the fourth quarter compared to $7.4 million in the same period a year ago. EBITDA of $9.8 million in the fourth quarter fell 9.36% from EBITDA of $10.8 million in the fourth quarter of 2001.
On the infrastructure side, to prepare for higher sales levels, the firm added several new points of sale in critical markets both in Mexico and the U.S. In each market, Interceramic has expanded customer service operations and invested heavily in new marketing programs, as well as expanded its sales force. The firm is also in the final stages of implementing a new Oracle supply chain management system that ties Interceramic electronically with each link in the chain from raw materials to manufacturing, warehousing, distribution and ultimate sale, making production much more attuned to demand throughout the firm’s sales networks in the U.S. and Mexico.
The international markets, primarily the U.S., climbed by 11.46% to $130.9 million over sales of $117.4 million the year before. During the year the firm opened two new Ceramic Tile International company stores, including our first in southern California, and started development work on three other new CTI stores.
