Losing streak is over for Dan River in 2Q
By Staff -- Home Textiles Today, 8/2/2002 2:56:00 PM
Danville, VA — Launching an earnings turnaround after a long string of losses, Dan River Inc. parlayed sharply stronger margins, deep cuts in debt and interest expense and a profit recovery in the long-battered apparel fabrics business into a second-quarter profit of $3.7 million, bounding back from a year-before loss of $6.1 million.
Sales at the diversified textiles producer slipped by 4.9 percent, to $153.9 million from $161.9 million last year, as a steep decline in the core home fashions business was partially offset by strengthening sales in the long-troubled apparel fabrics business.
Home fashions sales were off by 8.4 percent, to $107.2 million from $117.0 million last year, up against a tough comparison with last year when the company rolled out a large juvenile program, said Joseph Lanier Jr., chairman and ceo. "Additionally, sluggish consumer demand and the absence of aggressive inventory reduction efforts contributed to the lower sales," he said.
Despite the shortfall in sales, operating profits in the core home fashions business more than quadrupled, shooting up by 356.5 percent, to $12.2 million from $2.7 million last year. In a major turnaround, the long-hampered apparel fabrics business recorded a $1.3 million operating profit, reversing a prior-year loss of $1.8 million.
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