Exhibit 99.1
Quaker Fabric Reports Improved Third Quarter
Earnings and Declares Dividend
FALL RIVER, Mass.--(BUSINESS WIRE)--Oct. 23, 2003--QUAKER FABRIC
CORPORATION (NASDAQ Symbol: QFAB) today reported net sales of $80.8
million, net income of $2.2 million, and diluted and basic earnings
per share of $0.13 for the three-month period ended October 4, 2003;
compared to net sales of $81.0 million, net income of $1.5 million,
and diluted and basic earnings per share of $0.09 for the
corresponding period of fiscal 2002.
Results of operations for the first nine months of fiscal year
2003 were net sales of $244.9 million, net income of $4.7 million, and
diluted earnings per share of $0.28; compared to net sales of $283.0
million, net income of $10.4 million, and diluted earnings per share
of $0.62 for the corresponding period of fiscal 2002. Basic earnings
per share for the first nine months of 2003 and 2002 were $0.28 and
$0.65, respectively.
"We believe our third quarter performance confirms our core
strategy of building our competitive position through superior product
design and new product development expertise, investments in
proprietary processes and technology and excellent service to our
customers. These are the key things driving our market share gains and
enabling us to compete vigorously against all players in this market -
whether domestic or foreign," commented Larry Liebenow, Quaker's
President and CEO.
"Overall, our third quarter financial results reflect improvements
in our margins and at the bottom line in comparison to both the first
half of this year and the same period of last year. Importantly,
although our third quarter sales were similar to last year's, they
were up 9.3% versus the second quarter of this year and net income for
the quarter was 46% better than last year - largely as a result of the
investments we have made to improve our manufacturing efficiencies and
cost structure. For the quarter, domestic fabric sales were up $2.6
million from last year, however, due to global economic conditions,
export sales were down $2.0 million," Mr. Liebenow continued.
"Our order rate strengthened during the quarter, allowing us to
recover somewhat from the very slow first half we experienced - with
our backlog position at the end of the quarter at $30.2 million, up
about 5% in comparison to last year's third quarter and 23% in
comparison to the second quarter of this year," continued Mr.
Liebenow.
"Looking ahead, assuming domestic and global macroeconomic
conditions continue to strengthen, we would expect to see Quaker's
sales and overall financial performance improve steadily as a result
of the competitive advantages we have developed. We remain our
industry's leader and the introduction of each new Quaker fabric line
continues to meet with an outstanding reception from our customers -
with our strong placements at this month's very important
International Home Furnishings Show in High Point serving as further
confirmation of this. As a well-established global player, with
competency in both international sales and sourcing and a strong
balance sheet, we remain confident that our demonstrated agility will
allow us to grow this company and to deliver strong financial
performance to our shareholders," Mr. Liebenow added.
Quaker also today declared a cash dividend in an amount equal to
$0.025 per common share payable on November 21, 2003 to shareholders
of record on November 7, 2003.
Quaker Fabric Corporation is a leading manufacturer of woven
upholstery fabrics for furniture markets in the United States and
abroad, and the largest producer of Jacquard upholstery fabric in the
world. For the year ended January 4, 2003, the Company had net sales
of $365.4 million, net income of $11.6 million, and diluted and basic
earnings per share of $0.69 and $0.72, respectively.
THIS PRESS RELEASE CONTAINS "FORWARD LOOKING STATEMENTS," AS THAT
TERM IS DEFINED IN THE FEDERAL SECURITIES LAWS. THE READER IS
CAUTIONED THAT SUCH STATEMENTS ARE NOT GUARANTEES OF FUTURE
PERFORMANCE AND THAT, AS A RESULT OF VARIOUS FACTORS, INCLUDING, BUT
NOT LIMITED TO, THE LEVEL OF CUSTOMER DEMAND FOR THE COMPANY'S
PRODUCTS, HIGHER THAN ANTICIPATED COSTS AND LOWER THAN ANTICIPATED
PRODUCTION RATES, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED. FOR A FURTHER DISCUSSION OF THESE FACTORS, SEE THE
COMPANY'S 2002 FORM 10-K.
QUAKER FABRIC CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
STATEMENTS OF INCOME
Third Quarter Ended Nine Months Ended
(Unaudited) (Unaudited)
(12 Weeks)(11 Weeks) (37 (37
Weeks) Weeks)
Oct 4, Sept. 28, Percent Oct. 4, Sept. 28,Percent
2003 2002 Change 2003 2002 Change
Net sales $80,765 $80,990 (0.3)% $244,876 $282,953 (13.5)%
Cost of products
sold 62,922 64,945 193,581 221,180
Gross margin 17,843 16,045 11.2 % 51,295 61,773 (17.0)%
Selling, general
and admin.
expenses 13,581 12,406 41,130 41,790
Operating income 4,262 3,639 17.1 % 10,165 19,983 (49.1)%
Other expenses
Interest
expense 968 1,196 3,028 3,404
Other expenses
(income) (5) 76 84 70
Income before
provision for
income taxes 3,299 2,367 39.4 % 7,053 16,509 (57.3)%
Provision for
income taxes 1,122 875 2,398 6,108
Net income $2,177 $1,492 45.9 % $4,655 $10,401 (55.2)%
Earnings per
common share -
basic $0.13 $0.09 44.4 % $0.28 $0.65 (56.9)%
Weighted average
shares
outstanding -
basic 16,769 16,112 16,636 15,981
Earnings per
common share -
diluted $0.13 $0.09 44.4 % $0.28 $0.62 (54.8)%
Weighted average
shares
outstanding -
diluted 16,986 16,890 16,900 16,899
Note: Earnings per common share amounts for the quarters and for the
nine month periods presented have each been calculated
separately. Accordingly, quarterly amounts may not add to the
nine month period amounts.
Ratio analysis:
Gross profit
margin 22.1% 19.8% 20.9% 21.8%
S.G. & A. as a
percentage of
net sales 16.8% 15.3% 16.8% 14.8%
Operating margin 5.3% 4.5% 4.2% 7.1%
Net margin 2.7% 1.8% 1.9% 3.7%
Order backlog $30,239 $28,772
CONDENSED BALANCE SHEETS
October 4, January 4,
2003 2003
(Unaudited) (Audited)
Assets
Current assets:
Cash $595 $1,098
Accounts receivable 49,417 42,346
Inventories 47,023 50,407
Prepaid expenses and
other current assets 12,496 14,094
Total current
assets 109,531 107,945
Property, plant and
equipment, net 166,044 173,790
Goodwill, net of
amortization 5,432 5,432
Other assets 1,863 1,519
$282,870 $288,686
Liabilities and
Stockholders' Equity
Current liabilities $36,770 $33,137
Long-term debt and
capital leases 45,000 61,200
Deferred income taxes
and other liabilities 34,632 32,544
Stockholders' equity 166,468 161,805
$282,870 $288,686
CONTACT: Quaker Fabric Corporation
Larry A. Liebenow, 508-646-2264
Paul J. Kelly, 508-646-2251
Cynthia L. Gordan, 508-646-2261