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UNITED STATES LEATHER REPORTS THIRD QUARTER RESULTS

 MILWAUKEE, Nov. 3 /PRNewswire/ -- United States Leather, Inc. reported today that net sales for the third quarter were $80.3 million, down $2.1 million or 2.5 percent from $82.4 million for the same period in 1992. The decrease was principally due to reduced finished leather sales to the furniture industry and to Europe, partially offset by increased wet blue sales. Overall, square footage of finished leather products decreased by 7.3 percent as compared to the same period a year ago. Management believes that the reduced sales to the domestic furniture industry were a result of increased foreign competition as well as lagging consumer confidence. Sales for the nine-month period were $264.6 million, an increase of $8.0 million, or 3.1 percent, versus the first nine months of 1992.
 Income from operations for the third quarter of 1993 was $7.3 million, down $1.3 million or 15.1 percent from $8.6 million for the same period of 1992. The decrease resulted from reduced gross profit and increased selling, general and administrative expenses. Income from operations for the nine month period were $23.7 million, down $2.0 million or 7.8 percent from $25.7 million for the first nine months of 1992. Included in the third quarter of 1993 income from operations was $2.1 million of depreciation and amortization, an increase of $0.2 million versus the third quarter of 1992. Depreciation and amortization for the nine month period was $6.2 million versus $5.8 million for the first nine months of 1992.
 Net income before extraordinary item for the third quarter of both 1993 and 1992 was $1.0 million as reduced income from operations was offset by reduced interest expense. Net income before extraordinary item for the nine month period ended Sept. 30, 1993, was $2.2 million as compared to $3.0 million for the same period in 1992. As a result of the recapitalization described below, the company recorded an extraordinary charge to net income of $0.6 million during the third quarter of 1993, resulting in a net income of $0.4 million in the third quarter of 1993 as compared to $1.0 million for the same period last year. Net income for the nine month period was $1.6 million versus $3.0 million for the first nine months of 1992.
 On Aug. 6, 1993, the company was recapitalized in order to increase its financial and operating flexibility. As part of the recapitalization, the company (i) issued $135 million of senior notes, (ii) obtained a $65 million revolving credit facility, (iii) retired its bank indebtedness, (iv) retired a portion of its subordinated debt and preferred stock, and (v) exchanged its preferred stock, common stock and warrants for similar securities in its newly formed ultimate parent, U.S. Leather Holdings, Inc. ("Holdings"). In addition, the remaining subordinated debt was canceled following an exchange for senior debentures of Holdings.
 United States Leather, Inc. has three divisions: Pfister & Vogel and A.L. Gebhardt based in Milwaukee, and Lackawanna Leather based in Conover, N.C. A.L. Gebhardt operates divisions in Berlin, Wis., and Caldwell/Moser Leather in New Albany, Ind.
 Pfister & Vogel is a leading domestic producer of finished leather used in the production of high quality men's casual shoes; Gebhardt is a producer and marketer of a wide variety of finished leather for footwear, accessories, sporting goods, apparel and other personal leather goods; and Lackawanna is a leading supplier of upholstery leather to the domestic furniture and automobile industries.
 UNITED STATES LEATHER, INC. AND SUBSIDIARIES
 CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 (Dollars in Millions)
 3 Months Ended 9 Months Ended
 Sept. 30, Sept. 30,
 Income Statement Data: 1993 1992 1993 1992
 Net sales $80.3 $82.4 $264.6 $256.6
 Cost of sales 66.1 67.5 220.5 209.8
 Gross profit 14.2 14.9 44.1 46.8
 Selling, general &
 administrative expenses 6.1 5.5 17.9 18.5
 Amortization of intangible assets 0.8 0.8 2.5 2.6
 Income from operations 7.3 8.6 23.7 25.7
 Interest expense 5.3 6.6 18.8 19.5
 Income before taxes and
 extraordinary item 2.0 2.0 4.9 6.2
 Income tax provision 1.0 1.0 2.7 3.2
 Net income before extraordinary
 item 1.0 1.0 2.2 3.0
 Extraordinary item, net of tax (0.6) 0.0 (0.6) 0.0
 Net income 0.4 1.0 1.6 3.0
 Preferred Stock dividends 0.0 0.3 0.7 1.0
 Net income available for
 Common Shares $0.4 $0.7 $0.9 $2.0
 Other Data:
 EBITDA $9.4 $10.5 $29.9 $31.5
 Percent of Sales:
 Gross profit margin (pct) 17.7 18.1 16.7 18.2
* Income from operations (pct) 9.1 10.4 9.0 10.0
 EBITDA (pct) 11.7 12.7 11.3 12.3
 Pro Forma Data(A):
 Interest expense $4.3 --- $13.0 ---
 Net income $1.6 --- $5.8 ---
 (A) -- Pro forma information gives effect to the recapitalization that occurred on Aug. 6, 1993.
 -0- 11/3/93
 /CONTACT: Tom Riley, manager of public relations, of United States Leather, 414-291-9212/


CO: United States Leather, Inc. ST: Wisconsin IN: TEX SU: ERN

KL-BU -- CL023 -- 0285 11/03/93 16:06 EST
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Date:Nov 3, 1993
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