Quaker Fabric to cut 4Q spending

By Staff -- Home Textiles Today, 10/17/2002 3:16:00 PM

Fall River, MA — Quaker Fabric will slash $5 million from planned fourth quarter capital expenditures as part of a larger effort at generating cash and cutting expenses after missing consensus earnings estimates, despite gains in sales and profits.

Those measures are in addition to a 54 percent reduction in overtime costs realized during the third quarter, along with production cutbacks, according to Larry Liebenow, the company's president and ceo. Quaker reported a nearly $1.5 million profit on $80.9 million in sales during the third quarter. However, the resulting $0.09 earnings per share came in below the Thomson First Call estimate of $0.13 per share.

Third quarter results were also impacted by the elimination of a reserve for its performance-based variable compensation program, which added about $0.04 to the EPS, the company said.

"Despite the uncertain economic outlook as we start the fourth quarter, the strategic platform that we have worked so hard to put in place remains fundamentally correct," Liebenow said in a conference call with analysts. "Although the size of the pie is clearly smaller, we're continuing to enlarge our own piece of it."

The company expects to accomplish that through a continued emphasis on export markets, particularly in Central and Southeast Asia, he said.