EXHIBIT 99.1
Quaker Fabric Reports First Quarter Financial Results
FALL RIVER, Mass.--(BUSINESS WIRE)--April 18, 2007--QUAKER FABRIC
CORPORATION (NASDAQ Symbol: QFAB) today reported net sales of $32.6
million, an operating loss of ($3.8 million), a loss before taxes of
($5.0 million), a net loss of ($5.1 million), and diluted and basic
losses per share of ($0.30) for the three-month period ended March 31,
2007; compared to net sales of $46.3 million, an operating loss of
($5.2 million), a loss before taxes of ($6.4 million), a net loss of
($4.1 million), and diluted and basic losses per share of ($0.25) for
the corresponding period of fiscal 2006. Quaker's financial results
for the first quarter of fiscal year 2007 include after-tax
restructuring charges of $0.3 million. Excluding these charges, net
loss for the first fiscal quarter of 2007 was ($4.8 million) or
($0.29) per diluted share.
"While we are making progress with our efforts to restructure the
company, we clearly still have a lot of work to do - with primary
emphasis on our ongoing efforts to manage the company back to
profitability by increasing our overall sales, striking the right
balance between domestic production and global sourcing, achieving
costs consistent with our sales, and generating adequate cash flows.
We are encouraged by the stability that can be seen in our sales over
the past three quarters - and by the sequential improvement in our
margins over that same time period. More specifically, net sales
during the second half of last year and the first quarter of this year
have been steady - and our first quarter operating loss before
restructuring and asset impairment charges decreased significantly
versus the fourth quarter of last year. We are pleased by the
performance of our import programs over the past several quarters, by
our continued penetration of the contract furniture market and the
upper-end of the residential market and by the response we have seen
to our relatively new line of outdoor fabrics. In addition, during the
first quarter we reduced debt by approximately $1.0 million,"
commented Larry A. Liebenow, Quaker's President and CEO.
"We are also determined to reduce debt through the sale of excess
assets. As part of that effort, we anticipate completing the sale of
our corporate headquarters building in Fall River later this month -
and aggressive marketing of the other assets we are holding for sale
continues," Mr. Liebenow concluded.
Quaker Fabric Corporation is a leading supplier of upholstery
fabrics for furniture markets in the United States and abroad.
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, ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THOSE PROJECTED. FOR A FURTHER DISCUSSION
OF THESE FACTORS, SEE THE COMPANY'S 2006 FORM 10-K.
QUAKER FABRIC CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
STATEMENTS OF OPERATIONS
First Quarter Ended
March 31, April 1,
2007 2006
--------------- ----------------
Net sales $ 32,596 $ 46,280
Cost of products sold 28,974 40,839
--------------- ----------------
Gross profit 3,622 5,441
Selling, general and admin. expenses 7,137 10,029
Restructuring charges 299 599
--------------- ----------------
Operating loss (3,814) (5,187)
Other expenses
Interest expense 1,049 769
Other expenses 165 406
Loss before provision for income
taxes --------------- ----------------
(5,028) (6,362)
Provision (benefit) for income taxes 87 (2,227)
--------------- ----------------
Net loss $ (5,115) $ (4,135)
=============== ================
Loss per common share - basic $ (0.30) $ (0.25)
=============== ================
Weighted average shares outstanding -
basic 16,877 16,843
=============== ================
Loss per common share - diluted $ (0.30) $ (0.25)
=============== ================
Weighted average shares outstanding -
diluted 16,877 16,843
=============== ================
Ratio analysis:
- -------------------------------------
Gross profit margin 11.1% 11.8%
S.G. & A. as a percentage of net
sales 21.9% 21.7%
Operating margin -11.7% -11.2%
Net margin -15.7% -8.9%
Order backlog 9,465 13,142
- ------------------------------------- =============== ================
QUAKER FABRIC CORPORATION
Reconciliation of Operating Loss as Reported to
Pro Forma Operating Loss
First Quarter First Quarter
Ended Ended
March 31, April 1,
2007 2006
-------------- --------------
Operating loss, as reported $ (3,814) $ (5,187)
Restructuring charges 299 599
-------------- --------------
Pro forma operating loss $ (3,515) $ (4,588)
============== ==============
QUAKER FABRIC CORPORATION
Reconciliation of Net Loss as Reported to
Pro Forma Net Loss
First Quarter First Quarter
Ended Ended
March 31, April 1,
2007 2006
--------------- --------------
Net loss, as reported $ (5,115) $ (4,135)
Restructuring charges, net of
income taxes 299 389
--------------- --------------
Pro forma net loss $ (4,816) $ (3,746)
=============== ==============
Pro forma net loss, per share $ (0.29) $ (0.22)
=============== ==============
CONDENSED BALANCE SHEETS
March 31, December 30,
2007 2006
------------ -------------
Assets
Current assets:
Cash and cash equivalents $ 581 $ 724
Accounts receivable 21,649 21,512
Inventories 27,749 28,122
Prepaid expenses and other current
assets 5,455 5,620
------------ -------------
Total current assets 55,434 55,978
Property, plant and equipment, net 74,882 77,413
Assets held for sale 21,579 21,811
Other assets 5,297 5,642
------------ -------------
$ 157,192 $ 160,844
============ =============
Liabilities and Stockholders' Equity
Current maturities of debt $ 13,003 $ 11,280
Current portion of capital lease
obligations 154 152
Accounts payable and accrued expenses 23,628 21,249
------------ -------------
Total current liabilities 36,785 32,681
Long term debt, less current portion 19,744 22,440
Capital lease obligations, less current
portion 438 477
Other long-term liabilities 2,324 2,317
Stockholders' equity 97,901 102,929
------------ -------------
$ 157,192 $ 160,844
============ =============
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 2006 10-K.
CONTACT: Quaker Fabric Corporation
Larry A. Liebenow, 508-646-2264
or
Paul J. Kelly, 508-646-2251
or
Cynthia L. Gordan, 508-646-2261