Exhibit 99.1
Quaker Fabric Reports First Quarter Results
FALL RIVER, MASSACHUSETTS--(BUSINESS WIRE)--April 19, 2004--QUAKER
FABRIC CORPORATION (NASDAQ Symbol: QFAB) today reported net sales of
$84.4 million, net income of $2.4 million, and diluted earnings per
share of $0.14 for the three-month period ended April 3, 2004;
compared to net sales of $90.2 million, net income of $2.3 million,
and diluted earnings per share of $0.14 for the corresponding period
of fiscal 2003.
"While overall domestic demand for furniture covered with plain
and Jacquard upholstery fabrics appears to be somewhat weaker than it
is for case goods and residential furniture covered with leather and
suede products, Quaker's first quarter financial performance was
solid. Our net income was up slightly from last year, despite lower
overall sales. Similarly, our margin performance improved from last
year's first quarter, with a gross margin of 22.2%, compared to 21.0%
in 2003," commented Larry Liebenow, Quaker's President and CEO. "This
has been achieved by focusing on controlling our costs and improving
our overall productivity."
"Domestic fabric sales were down approximately 11.2 % versus last
year, but our yarn business demonstrated significant strength during
the quarter, with yarn sales approximately double what they were
during the comparable period of last year, largely as a result of the
effort we have made to develop new markets for our yarn products.
Export sales held constant, despite challenging global macroeconomic
conditions during the first quarter," Mr. Liebenow continued.
"Although new orders during the first quarter were down about
13.5% from last year, they reflected a 5.3% increase versus the fourth
quarter of 2003. Our backlog position at the end of the quarter was
essentially the same as it was at the end of 2003 and at the
conclusion of last year's first quarter. And our balance sheet, with a
net debt to total capital ratio of 16.6%, remains very strong and
continues to provide Quaker with the flexibility necessary to respond
quickly in a dynamic market environment," Mr. Liebenow added.
"Looking ahead, Quaker will continue to aggressively pursue its
core strategy of building profitable volume, by providing the market
with the best products and service available - and our fabrics
continue to represent outstanding value for our customers, with all
indications pointing to our placements at this month's all-important
High Point Furniture Market being very strong," Mr. Liebenow added.
"A commitment to taking care of the fundamentals while providing
our customers with exciting and innovative products in a timely and
efficient manner is what Quaker is all about -- and we continue to do
just that. We are determined to grow our business by continuing to
develop additional market segments and by taking advantage of the
significant investments we have made over the years. And we remain
convinced that Quaker is well positioned to deliver consistently
strong financial results to our shareholders over time," Mr. Liebenow
concluded.
Quaker also today announced the declaration of a cash dividend in
an amount equal to $0.03 per common share, payable on May 19, 2004 to
shareholders of record on May 5, 2004.
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 3, 2004, the Company had net sales
of $325.3 million, net income of $7.9 million, and diluted and basic
earnings per share of $0.47 and $0.48, 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 2003 FORM 10-K.
QUAKER FABRIC CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
STATEMENTS OF INCOME
First Quarter Ended
(Unaudited)
Apr. 3, Apr. 5, Percent
2004 2003 Change
Net sales $84,384 $90,225 (6.5)%
Cost of products sold 65,689 71,258
Gross profit 18,695 18,967 (1.4)%
Selling, general and admin. expenses 14,025 14,251
Operating income 4,670 4,716 (1.0)%
Other expenses
Interest expense 847 1,069
Other expenses, (income) (16) (24)
Income before provision for
income taxes 3,839 3,671 4.6 %
Provision for income taxes 1,401 1,358
Net income $2,438 $2,313 5.4 %
Earnings per common share - basic $0.15 $0.14 7.1 %
Weighted average shares
outstanding - basic 16,810 16,416
Earnings per common share - diluted $0.14 $0.14 0.0 %
Weighted average shares
outstanding - diluted 17,307 16,764
Ratio analysis:
Gross profit margin 22.2% 21.0%
S.G. & A. as a percentage of net
sales 16.6% 15.8%
Operating margin 5.5% 5.2%
Net margin 2.9% 2.6%
Order backlog $25,829 $26,349
CONDENSED BALANCE SHEETS
April 3, January 3,
2004 2004
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $10,955 $5,591
Accounts receivable 47,902 44,374
Inventories 47,294 43,987
Prepaid expenses and other
current assets 11,413 12,739
Total current assets 117,564 106,691
Property, plant and equipment, net 160,287 162,293
Goodwill 5,432 5,432
Other assets 1,857 1,862
$285,140 $276,278
Liabilities and Stockholders' Equity
Current liabilities $38,181 $32,523
Long-term debt 40,000 40,000
Deferred income taxes and other
liabilities 35,369 34,250
Stockholders' equity 171,590 169,505
$285,140 $276,278
This document 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 2003 10-K.
CONTACT: Quaker Fabric Corporation
Larry A. Liebenow, 508-646-2264
Cynthia L. Gordan, 508-646-2261
Paul J. Kelly, 508-646-2251