WestPoint Home revenue dives to $425M in 2008

Operating loss narrowed to $95 million

James Mammarella, March 5, 2009

New York – WestPoint Home, once a $2 billion home textiles manufacturing goliath, saw its sales shrink by 37.8% to $425 million for the year ended December 31, 2008, down from $683 million in 2007.

Fourth-quarter sales fell 29.6% to $107 million, down from $152 million in 2007.

As WestPoint continued to cut costs, however, it narrowed its operating loss to $95 million for the year, down from an operating loss of $159 million in 2007. Gross margin, just $2 million in 2007, grew to $31 million last year, which the company said “came from shifting manufacturing capacity from the U.S. to lower cost countries.”

In response to an analyst question this morning about gaining more operating margin dollars, Keith Meister, vice chairman of parent company Icahn Enterprises LP, said the goal is still for WestPoint Home to be the “best of breed in the industry.”

Meister said the company will “continue to take the appropriate restructuring actions” needed “to become a low cost provider – and then we can grow the top line.”

Restructuring costs and impairment charges were cut from $49 million in 2007 to $37 million in 2008.

Icahn Enterprises cfo Dominick Ragone noted that WestPoint Home ended 2008 with good liquidity: “$131 million in unrestricted cash, and $45 million unused borrowing availability” on its revolving credit line.

The parent company – which also operates divisions in investment, metals, the automotive aftermarket and real estate, recorded a 2008 net loss of $43 million, or 80 cents “per LP unit,” down from earnings of $308 million, or $1.58 per LP unit for fiscal 2007. Revenues doubled to $5.03 billion at the company, which in the past year both sold off assets, such as casinos, and acquired new units, such as the Federal Mogul automotive business.


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