Quaker drives 2Q profits up 45 percent

By Staff -- Home Textiles Today, 7/16/2002 2:29:00 PM

Fall River, MA — Rapidly building margins, sales and market share, Quaker Fabric Corp. drove second-quarter profits up by 45.5 percent, to $4.5 million from $3.1 million last year as it continues to build on a rebound begun more than a year ago.

Sales at the fabric producer jumped up by 20.4 percent, to $101.9 million from $84.6 million the preceding year, helped by a strong double-digit gain in export sales through the first half of the year.

But you wouldn't know how impressive a performance Quaker turned in during the second quarter judging solely from Wall Street's response. With investors still stuck on the sidelines, made anxious by corporate scandals, a prolonged slide in the stock market and lately a weakening dollar, Wall Street pushed Quaker stock down by more than a fourth in the hours after the good news hit the wire. Swept along by continued erosion in the Dow Jones Industrial Average, Quaker stock tumbled by 28.3 percent, or $3.93 a share, this morning, plunging to $9.95 from $13.88 the day before.

Helping to fuel strong earnings growth in the quarter, in addition to higher sales, Quaker expanded its average gross margin by 170 basis points, or 1.7 percentage points, to 22.7 percent from 21.0 percent the prior year. Gross margin dollars increased by 30.0 percent, to $23.1 million from $17.8 million.