Worldtex Reports Third Quarter Results.HICKORY Hickory, city, United States Hickory, city (1990 pop. 28,301), Burke and Catawba counties, W N.C., at the foot of the Blue Ridge Mts.; inc. 1870. It is a processing and trade center for an abundant agricultural region (grain, soybeans, poultry, hogs, , N.C.--(BUSINESS WIRE)--Nov. 2, 1998--Worldtex, Inc. (WTX-NYSE), a leading producer and supplier of covered elastic elastic Of or relating to the demand for a good or service when the quantity purchased varies significantly in response to price changes in the good or service. yarns and narrow elastic fabrics, announced today that for the quarter ended September September: see month. 30, 1998, the company had a net loss of $1.1 million or $.07 per share compared with net income of $2.0 million or $.14 per share in the third quarter of 1997. Sales in the third quarter increased to $59.8 million from $45.6 million in the third quarter of 1997. Worldtex's net income for the nine months ended September 30, 1998 was $1.8 million or $.13 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, compared with $6.7 million or $.46 per share for the first three quarters of 1997. Sales for the first nine months of 1998 were $195.1 million, versus $148.4 million for the comparable period in 1997. Commenting on Worldtex's third quarter performance, Barry D. Setzer, President and Chief Executive Officer, stated, "The sales increase for the third quarter, as well as for the first nine months of 1998, was due to the inclusion of sales for Worldtex's new narrow elastic fabric subsidiaries, Elastic Corporation of America and Elastex, both of which were acquired in the fourth quarter of 1997. The decrease in our overall profitability in the third quarter, however, was the result of seasonal slowness and unexpected weak customer demand." Mr. Setzer explained, "The Company's third quarter has consistently been our slowest quarter. This is primarily due to the fact that the operations of our most profitable unit, Filix Lastex in Europe, is closed for the traditional European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. vacation period in August. In addition, many of Worldtex's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. customers close for several days in the third quarter; however, this year they were closed for longer periods than usual, placing a further drain on sales and earnings." "Worldtex's North American covered yarn yarn, fibers or filaments formed into a continuous strand for use in weaving textiles or for the manufacture of thread. A staple fiber, such as cotton, linen, or wool, is made into yarn by carding, combing (for fine, long staples only), drawing out into roving, then operations produced modest increases in sales during the quarter but both sales and earnings were below expectations. Our South American covered yarn operation, Fibrexa, located in Bogota, Colombia continued to post strong sales and profitability in an otherwise soft market environment. Although sales in Worldtex's European operation were lower than the prior year, gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. increased slightly above the same period in 1997, as a result of tight cost controls and lower raw material prices. Sales and margins in our narrow elastic fabric business were disappointing in the quarter but we expect both higher sales and improved profit margins in the fourth quarter." "Despite the general weakness in our markets and overall economic uncertainty," concluded Setzer, "we believe that the synergies from our acquisitions, our disciplined cost cutting and reduction in raw material costs provide a sound basis for enhanced earnings as more normal levels in demand reassert reassert Verb 1. to state or declare again 2. reassert oneself to become significant or noticeable again: reality had reasserted itself Verb 1. themselves." Worldtex produces covered elastic yarn and narrow elastic fabrics. Covered elastic yarns are increasingly woven A woven is a cloth formed by weaving. It only stretches in the Bias directions (between the warp and weft directions), unless the threads are elastic. Woven cloth usually frays at the edges, unless measures are taken to counter this, such as the use of pinking shears or hemming. or knitted knit v. knit or knit·ted, knit·ting, knits v.tr. 1. To make (a fabric or garment) by intertwining yarn or thread in a series of connected loops either by hand, with knitting needles, or on a into fabrics for a growing number of applications in modern apparel and home furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. , where their dynamic stretch capabilities offer durability du·ra·ble adj. 1. Capable of withstanding wear and tear or decay: a durable fabric. 2. , shape retention, enhanced styling and -- most important of all -- comfort. Narrow elastic fabrics are used as apparel components -- such as elasticized e·las·ti·cized adj. Made with strands or inserts of elastic: slacks with an elasticized waistband. Adj. 1. waistbands, our patented QuikCord(R) in athletic wear and as straps, facings, edgings and waistbands in women's intimate apparel, as well as for elastic waistbands and thigh-high bands in women's hosiery hosiery Knit or woven coverings for the feet and legs, worn inside shoes. In the 8th century BC, Hesiod referred to linings for shoes; the Romans wrapped their feet, ankles, and legs in long strips of leather or woven cloth. . -0-
WORLDTEX, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands except per share amounts)
UNAUDITED
Nine Months Ended Three Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Net sales $ 195,084 148,350 59,801 45,552
Cost of goods sold 159,174 122,040 50,761 37,428
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Gross profit 35,910 26,310 9,040 8,124
Selling & administration
expense 18,758 11,688 5,676 3,634
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Operating profit 17,152 14,622 3,364 4,490
Interest expense 14,255 4,417 4,824 1,450
Other income (expense) - net 255 30 (90) (129)
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Income (loss) before income
taxes 3,152 10,235 (1,550) 2,911
Provision (benefit) for
income taxes 1,314 3,492 (489) 863
-------- ------ --------- --------
Net income (loss) $ 1,838 6,743 (1,061) 2,048
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Net income (loss) per share
Basic $ 0.13 0.47 (0.07) 0.14
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Diluted $ 0.13 0.46 (0.07) 0.14
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Weighted average shares outstanding
Basic 14,401 14,417 14,341 14,429
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Diluted 14,642 14,809 14,466 14,749
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Supplemental disclosure
EBITDA $24,609 19,371 5,668 5,943
Forward looking statements made in this release involve a number of risks and uncertainties, including, but not limited to, the financial strength of the apparel industry, the level of consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. for apparel, changing consumer preferences, the competitive pricing environment within the hosiery market segment of the apparel industry, foreign currency translation, success of new product introduction, and other risk factors detailed in the Company's Securities and Exchange Commission filings. |
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