Quaker Fabric Corp., Fall River’s largest employer, continues to suffer steep losses, with a net loss of $10.3 million, or 61 cents per share, for the second quarter, including $9.4 million in asset impairment and restructuring costs, but also a $1.2-million tax credit.
So far this year, Quaker has lost $13.4 million, according to the company’s latest financial report. Net sales for the quarter were $68.9 million, down 5.7 percent from the same period last year; for the first half of 2005, sales were $128.1 million, down 18.7 percent from 2004.
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In a news release, Quaker President and CEO Larry Liebenow blamed the losses on domestic market conditions, especially the strength of imported leader and faux suede products, excess inventory and the effects of “heavy competition” from domestic and foreign fabric suppliers.
Domestic fabric sales were down 13.3 percent for the quarter, to $50.4 million, Liebenow said, whereas international fabric sales, at $8.4 million for the quarter, “essentially held their own,” and yarn sales, at $10.2 million, continued to “show significant growth.”
But the volume of new orders isn’t promising: As of June 30, Quaker’s order backlog was valued at $15.4 million, up from $14.6 million as of Dec. 31, but down from $21.6 million as of June 30, 2004. The decline in sales, combined with higher energy and raw material costs, “continued to take their toll,” Liebenow said, “and it is clear that we still have considerable work to do when it comes to getting our margins back to where they need to be.”
The quarterly loss does reflect, to some extents, the pains associated with trying to revive a floundering company: a $2.2-million debt pre-payment charge related to a May refinancing effort, related fees and charges related to recent layoffs.
Quaker, which has now lost money for five consecutive quarters, has been trimming its work force to try to reduce costs. According to a Fall River Herald-News report, the company laid off 100 people last August, 140 in November, 275 in January and 30 in July. Before the cuts, it had more than 2,500 employees at several locations in the Fall River area.
Quaker has also been trying to consolidate its operations into fewer facilities, and Liebenow said the company is “actively marketing our excess real estate,” including 60 acres of undeveloped land it owns in Fall River.
“The overall goal of our restructuring effort is to build volume, cut costs and allocate our resources in a way that will enable us to reach both our financial and strategic objectives,” Liebenow said. The company continues to launch new products, including a new line of sueded products designed to go head to head with imported faux suedes, more novelty yarns, and a new line of outdoor fabrics to be unveiled later this year.
Founded in 1945 as a small family-owned fabric mill, Quaker Fabric is one of the largest producers of Jacquard upholstery in the world – even after its recent setbacks. Its clientele includes “virtually all the largest furniture manufacturers” in the United States, along with clients in more than 40 other countries, according to the company’s Web site.
Quaker Fabric stock is traded on NASDAQ under the symbol “QFAB.”
