Dalton, GA, September 14--Tandus Group, Inc. reported earnings for the second quarter and six months year-to-date ended July 31, 2004 for its Collins & Aikman Floorcoverings, Inc., and subsidiaries.
Revenues for the 13 weeks ended July 31, 2004, were $99.6 million compared to $93.9 million for the prior year. Selling, general and administrative expenses for the 13 weeks ended July 31, 2004, were $20.1 million compared to $19.5 million for the prior year.
Mac Bridger, CEO of Tandus stated, "We are very pleased with our overall results for the quarter and year to date. Our core markets have shown meaningful improvement over the comparable prior year periods. These improvements have allowed the company to leverage its manufacturing operations and report a strong EBITDA performance."
Adjusted EBITDA for the 13 weeks ended July 31, 2004, was $22.1 million compared to $18.2 million for the prior year. As a percentage of sales, adjusted EBITDA margin for the 13 weeks ended July 31, 2004, was 22.2% compared to 19.4% for the prior year. The increase in revenues was due to higher demand throughout the U.S. specified commercial market; in particular, the corporate office market was up 18.5% from the prior year.
The company's institutional end markets of education, healthcare, and government were up 7.3% from the prior year. Selling, general and administrative expenses increased primarily due to increased salaries, taxes and benefits of $.8 million, marketing and promotional expenses of $.5 million, partially offset by lower legal and professional fees of $.9 million. A significant portion of the increase in salaries, taxes and benefits was attributable to higher health care costs.
Revenues for the 26 weeks ended July 31, 2004, were $177.3 million compared to $165.5 million for the prior year. Selling, general and administrative expenses for the 26 weeks ended July 31, 2004, were $41.1 million compared to $36.9 million for the prior year.
Adjusted EBITDA for the 26 weeks ended July 31, 2004, was $30.2 million compared to $28.4 million for the prior year. The EBITDA for the six months ended July 2003 includes a special dividend from the company's Chroma partnership of $1.8 million.
As a percentage of sales, adjusted EBITDA margin for the 26 weeks ended July 31, 2004, was 17.0% compared to 17.2% for the prior year. The increase in revenues was due to higher demand throughout the U.S. specified commercial market; in particular the corporate office market was up 26.8% from the prior year.
The company's institutional end markets of education, healthcare, and government were up 7.2% from the prior year.
Selling, general and administrative expenses increased primarily due to increased salaries, taxes and benefits of $1.8 million, marketing and promotional expenses of $1.0 million, foreign currency losses of $1.1 million and $.5 million of higher commissions.
The higher expenses in the year to date results for salaries, taxes and benefits reflect in part the continued timing of the implementation of the selling strategy as well as overall higher healthcare costs. Marketing and promotional expenses were driven principally by the timing of certain product launches and should be in line with prior year experience the remainder of the year.
Mr. Bridger further commented, "As previously disclosed, the company is closing its Santa Ana, Calif., broadloom carpet manufacturing facility and relocating the production to our Truro, Nova Scotia, Canada, facility. Our confidence in a successful integration has been confirmed as our organization has come together to create a seamless transition plan for our customers."
