Dalton, GA, June 10--Tandus Group, Inc. which includes Collins & Aikman Floorcoverings, Inc. and subsidiaries, reports earnings for the first quarter (13 weeks) ended April 26, 2003.
Revenues for the 13 weeks ended April 26, 2003, were $71.6 million compared to $66.4 million for the prior year. Selling, general and administrative expenses for the 13 weeks ended April 26, 2003, were $19.0 million compared to $17.4 million for the prior year. Adjusted EBITDA for the 13 weeks ended April 26, 2003, was $10.2 million compared to $9.4 million for the prior year. As a percentage of sales, Adjusted EBITDA margin for the thirteen weeks ended April 26, 2003, was 14.2% compared to 14.1% for the prior year.
The increase in revenues was due to the inclusion of $7.8 million in extrusion revenues partially offset by a slight decrease in the floorcoverings segment revenues, which resulted from the continued slow demand in the corporate office market and an increase in revenues of the institutional end markets. Selling, general and administrative expenses increased primarily due to increased salaries and benefits of $0.9 million, sampling costs of $0.2 million and amortization of $0.5 million. The majority of these increases (excluding amortization) were incurred in support of the company's new selling strategy implemented at the beginning of the quarter. Adjusted EBITDA increased due higher revenues and lower interest expense partially offset by lower margin on the extrusion operation, the increase in selling, general and administrative expenses, and the underutilization of the plants. Additionally, the company voluntarily prepaid $10.0 million in term loans.
The company announced in late 2002 a new sales and marketing strategy that responds to customer needs and shifting market demands. Operating as an umbrella organization, Tandus has designed an efficient selling strategy to better leverage its product brands--C&A Floorcoverings, Monterey Carpets and Crossley Carpet Mills. The three brands' sales organizations have combined products and services to create a single point of contact for customers seeking single source floor covering solutions.
"Because we believe our continued success and growth is closely tied to how we can better serve our customers, we've leveraged the current economic environment to implement an enterprise-wide, customer-focused selling strategy and the infrastructure to support it," said Mac Bridger, CEO of Tandus. "Our team's responsiveness and success in executing the new market strategy thus far lead us to our confidence that we are building momentum to achieve meaningful financial improvement over the next several quarters."
