WestPoint turns focus to core customers - only -- in 2013
Home Textiles Today Staff -- Home Textiles Today, 3/15/2013 2:25:52 PM
New York - Impacted by the loss of largely unprofitable programs, WestPoint Home's sales fell by double digits for the fiscal year and fourth quarter, reported parent company Icahn Enterprises L.P. today.
For the year, ended Dec. 31, the company's sales fell 19.2% to $228 million compared to 2011's $322 million. Sales fell more sharply in the quarter -- 22.7% -- to $55 million versus $63 million a year ago.
"Despite this, EBITDA has been close to break even for all of 2012 compared to a consolidated loss of $31 million in the prior year," Icahn Enterprises noted during its presentation of its home fashions division in its earnings call this morning. "So we have made great improvements in profitability during 2012 by narrowing our business to select profitable customers."
More positive news came from gross margins, which increased from 5% to 10%, "and WestPoint continued to rationalize its expense structure," the parent company added.
To remedy the situation and improve its performance in 2013, WestPoint has recently turned its full attention "on products and customers that match its manufacturing and distribution strengths. We believe the management team is on the right track by focusing on core customers."
Icahn Enterprises added that WestPoint "continued to build cash through the fourth quarter as it works down its working capital and sells discontinued plants."
At the end of Q4, WestPoint had $67 million in cash compared to $55 million at 2011's yearend.