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Burlington sales down 16% in 3Q

Don Hogsett -- Home Textiles Today, July 30, 2001

Stung by a widespread consumer slowdown and the sale of its area rug business, third-quarter sales of interior furnishings dropped off by more than a fourth at Burlington Industries Inc., falling to $83.6 million from $116.1 million last year, a shortfall of $32.5 million.

And hobbled by retail bankruptcies and slowdowns in its plants as it works down inventories, the home business recorded a loss of $5.1 million, reversing a year-before profit of $2.2 million.

Pulling about $13 million away from home sales in the quarter was the earlier sale of the tufted area rug business, said Charles Peters Jr., senior vp and cfo, in a conference call with investors. But even excluding the impact of the asset sale, third-quarter sales in the home still fell by 19 percent, he said.

Scoping out specific business segments, Peters said Burlington's core window business continued to get a boost from Martha Stewart, increasing the company's presence at Kmart and offsetting sales lost in the collapse of Wards. The bedding business continues to improve, said Peters, but is expected to remain "soft" until consumer spending improves.

With weakness in apparel acting as a further drag, overall sales tumbled by 16.4 percent, to $351.1 million from $419.8 million last year, a decline of almost $69 million. Slowing down its plants to work off excess inventories and putting heavy pressure on margins, Burlington posted a modest third-quarter profit of $1.5 million, virtually flat with last year.

Burlington Industries Inc.

Qtr. 6/30 (x000) 2001 2000 % CHG
(loss)
a-Third quarter results include a $236,000 provision for doubtful accounts, down 89.2 percent from $2.2 million last year; a one-time gain of $357,000 from the reversal of an earlier restructuring charge, compared with a year-before gain of $186,000; a $1.6 million loss from the company's share of a joint venture, compared with a prior-year profit of $3.6 million; and $7.3 million is miscellaneous income, including $4.8 million in interest income resulting from a Mexican Value Added Tax refund
b-Nine-month results include a $2.9 million provision for doubtful accounts, down 6.3 percent from $2.7 million last year; a one-time gain of $121,000 from the reversal of an earlier restructuring charge, compared with a year-before gain of $186,000; a $725,000 profit from the company's share of a joint venture, year-ago profit of $7.4 million; $16.0 million in miscellaneous income, including $4.8 million in interest income resulting from a Mexican Value Added Tax refund; $3.2 million from asset sales; and an income-tax benefit of $7.5 million, compared with income-tax expense of $9.2 million last year.
Sales $351,123 $419,821 -16.4
Oper. income (EBIT) 13,876 22,386 -38.0
Net income 1,490a 1,494a -0.3
Per share (diluted) 0.03 0.03
Average gross margin 12.2% 13.7%
SG&A expenses 8.2% 8.3%
Nine months
Sales 1,076,849 1,193,016 -9.7
Oper. income (EBIT) 18,929 52,133 -63.7
Net income (14,397)b (3,272)b
Per share (diluted) (0.27) (0.06)


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