NEW YORK — Two of the nation’s synthetic textile manufacturers reported bigger losses in their recent quarterly results, as increased costs took the shine off higher sales.
Double-digit sales gains weren’t able to overcome rising expenses for Greensboro, N.C.-based Unifi Inc., which posted a fourth-quarter loss of $9 million, or 17 cents a share, for the three months ended June 25. Comparatively, the polyester and nylon yarn manufacturer reported a loss of $6 million, or 12 cents, in the same period a year ago.
Sales for the period went up 16.2 percent to $203.2 million from $174.8 million. However, gains were offset by the cost of sales rising 730 basis points to 99.4 percent of sales, or $202 million, compared with 92.1 percent of sales, or $160.9 million, in the year-ago period.
For the year, the company reported a loss of $41.2 million, or 79 cents, compared with a loss of $69.8 million, or $1.34. Sales advanced 19.7 percent to $799.4 million from $667.8 million.
“Although the results posted on our income statement for our 2005 fiscal year were generally as expected, the significant progress on working capital reduction made during the fourth quarter leaves our balance sheet stronger than anticipated,” Bill Lowe, chief operating officer and chief financial officer, said in a statement.
A hefty legal bill pushed losses deeper into the red for Wellman Inc. for the second quarter. The Shrewsbury, N.J.-based polyester manufacturer reported a loss of $26.1 million, or 82 cents, for the three months ended June 30.
Results were weighed down by a pretax charge of $24 million during the quarter to “defend or settle all civil claims alleging that Wellman engaged in price-fixing for sales of polyester staple fiber,” according to a statement from the company. The U.S. Department of Justice’s antitrust division investigated allegations of price-fixing at Wellman and three other U.S. polyester manufacturers from September 1999 to January 2001. In September 2004, the department said it would not seek to indict Wellman or any of its employees.
Sales for the company rose 4.9 percent to $345 million from $329 million. Cost of sales increased to 94.6 percent of sales, or $326.4 million, from 92.9 percent of sales, or $305.7 million.
For the six-month period, losses narrowed to $19.1 million, or 60 cents, compared with a loss of $35.7 million, or $1.13, in the year-ago period. Sales increased 17.4 percent to $731.3 million from $722.8 million.