Dalton, GA, May 5, 2006--Tandus Group, Inc., which includes Collins & Aikman Floorcoverings, Inc., and subsidiaries, announced its financial results for the fourth quarter (13 weeks) and fiscal year (52 weeks) ended January 28, 2006.
The company has completed the transfer of its broadloom production from the Santa Ana, California facility to its Truro, Nova Scotia facility (the "Facility Maximization"). The adjusted EBITDA reconciliation at the end of this release highlights the impact of the costs incurred related to this project in all periods presented.
Net sales for the thirteen weeks ended January 28, 2006 were $80.0 million, a decrease of 0.9% from the $80.7 million for the thirteen weeks ended January 29, 2005. Net sales of the company's Floorcoverings segment were $72.6 million for the thirteen weeks ended January 28, 2006 as compared to $75.4 million for the thirteen weeks ended January 29, 2005, a decrease of $2.8 million or 3.7%, primarily attributable to the North American operations. Within these operations, the decrease in the floorcoverings segment's net sales was primarily attributable to an 18.1% decrease in broadloom sales, partially offset by a 4.6% increase in sales of structure-back carpets (six foot and carpet tile), principally driven by increases in sales of carpet tile. From an end use perspective, the current quarter results reflect a 3.7% increase in core markets (educational, healthcare and government) and an 11.3% decrease in corporate sales, which includes retail. Net sales of the extrusion segment were $7.4 million for the thirteen weeks ended January 28, 2006 as compared to $5.3 million for the thirteen weeks ended January 29, 2005, an increase of $2.1 million or 39.6%. The increase in sales for the extrusion segment was due to overall higher sales to the extrusion segment's external customers during the current quarter.
Cost of goods sold was $56.1 million for the thirteen weeks ended January 28, 2006 as compared to $59.6 million in the thirteen weeks ended January 29, 2005. The company incurred facility maximization costs of $0.4 million for the thirteen weeks ended January 28, 2006, as compared to the prior year period of $2.2 million. As a percentage of sales, costs of goods sold were 70.1% and 73.9% for the thirteen weeks ended January 28, 2006 and January 29, 2005, respectively.
Selling, general and administrative expenses increased to $19.8 million for the thirteen weeks ended January 28, 2006, an increase of 1.5% from $19.5 million in the thirteen weeks ended January 29, 2005. During the period the company recorded a charge of $1.1 million related to a February 10, 2006 jury verdict in a litigation matter in Texas regarding a certain carpet-buying contract. The company also recorded professional fees of $0.1 million during the thirteen weeks ended January 28, 2006 related to the amendment of its senior credit facility effective October 29, 2005 to modify certain covenants and incurred severance charges of $0.4 million as part of the company's cost cutting initiatives implemented throughout the current fiscal year. The company recorded a foreign currency transaction gain of $0.8 million for the thirteen weeks ended January 29, 2005 as compared to a minimal loss for the thirteen weeks ended January 28, 2006. In addition, the company incurred higher professional services fees, partially offset by lower salaries, taxes and benefits. As a percentage of sales, these expenses increased to 24.8% from 24.2% in the prior year.
