GDA Staff -- Gifts & Dec, May 1, 2003
Fall River, MA — With sales falling off at an almost double-digit pace, and its margins squeezed thin, first-quarter profits at Quaker Fabric Corp. were virtually slashed in half, dropping by 48.8 percent, to $3.7 million from $7.0 million last year.
With business weakening in its domestic and international markets, Quaker sales declined by 9.8 percent during the opening quarter, to $90.2 million from $100.0 million last year.
Caught between the falling sales and weaker margins, operating profits tumbled by 41.8 percent, to $4.7 million from $8.1 million, a shortfall of $3.4 million. Operating margin fell to 5.2 percent from 8.1 percent a year ago.
Larry Liebenow, president and ceo, said the sales shortfall reflected "considerable softness in overall domestic and international demand." U.S. sales declined by $7.6 million, and export sales fell by another $2.1 million, "most of which was attributable to a falloff in sales into the Middle East," said Liebenow. Additionally, yarn sales fell by $600,000, "and the outlook for this particular market suggests that our yarn sales are likely to remain under pressure."
Quaker's order backlog fell by 48.8 percent, at the end of the quarter, to $26.3 million from $51.5 million. Said Liebenow, "We expect overall market conditions to remain difficult until we begin to see some improvement in the general economy."
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