Interceramic’s Sales Lower

Chihuahua, Mexico, Apr. 17-- Internacional de Ceramica S.A. de C.V. focused its efforts on maintaining product sales levels and improving operating results in the first quarter. The strategy was due in part to lower pricing pressures and a major drop in the value for the peso that resulted in a 20% devaluation from March 2002 to March 2003. For the quarter, results were mixed, with the quarter generally comparing unfavorably with the same quarter last year but showing improvement over the final quarter of 2002. Consolidated sales of $74.2 million for the first quarter of the year were 3.16% lower than in the same period a year ago. Sales in Mexico of $42.0 million for the first quarter were down 5.06% from the first quarter last year, although product sales in Mexico remained fairly healthy. During the first quarter of the year the firm sold 4.2 million square meters of tile in Mexico, an increase of 12.16% over the amount of product sold in the first quarter last year. In the international markets results were mixed as well. International sales were $32.1 million, 0.55% lower that the $32.3 million posted in the same period a year ago. However, the amount of product sold in the international markets dipped considerably, down 11.8% to 2.4 million square meters from the 2.8 million square meters sold in the first quarter of last year. While this generally reflects improved margins in the firm’s international sales, it also demonstrates a need for renewed emphasis on increasing marketshare in the U.S. The lower sales for the quarter in combination with basically the same cost of sales over the first quarter of the preceding year is reflected in a decrease in operating income from $8.4 million a year ago to $6.4 million in the first quarter this year. While disappointing, operating income for the quarter did show growth of 6.98% over operating income of $6.0 million in the last quarter of 2002, an encouraging trend. Similarly, EBITDA of $10.1 million for the first quarter was a 15% decrease over EBITDA in the first quarter last year of $11.9 million. In the face of tough markets, the firm has been relatively successful at keeping operating expenses in check, with operating expenses for the first quarter representing 27.15% of sales compared to figures of 27.14% and 27.41% for the first and last quarters, respectively, of last year.