GALEY & LORD PROFITS RISE 45.5% IN SECOND QUARTER
GREENSBORO, N.C. — Aided by healthy sales gains in its apparel fabrics segment, Galey & Lord reported second-quarter earnings jumped 45.5 percent to $3.8 million, or 32 cents a share, from $2.6 million, or 22 cents, a year earlier.
Sales for the three months ended March 29 gained 28.9 percent to $129.4 million from $100.4 million.
Apparel fabrics sales were up 34.2 percent to $120.5 million from $89.8 million. Operating income for apparel fabrics rose 27.8 percent to $9.2 million, representing 7.6 percent of net sales, from $7.2 million, or 8.1 percent.
The order backlog at the end of the quarter was up 66 percent to $166 million, with the backlog in apparel fabrics up 82 percent.
The company guided Wall Street estimates down in March when chairman and chief executive officer Arthur C. Wiener said earnings per share were “likely” to be near the lower end of the 32 cents to 40 cents estimated by stock analysts. He attributed the decrease in projected earnings to manufacturing “inefficiencies caused by increasing production rates to maximum levels to meet higher customer demand.” The company did not comment on these inefficiencies in an upbeat second-quarter release.
However, the Wall Street consensus estimate remained at 34 cents. The stock closed at 15 1/4, unchanged Wednesday on the New York Stock Exchange.
For the six months, earnings soared to $7.34 million, or 61 cents, from $1.9 million, or 16 cents. The year-ago six months included a $1 million charge for the writeoff of fees related to the cancellation of a proposed merger with Graniteville Co., which was then a subsidiary of Triarc Companies Inc. Graniteville was acquired by Avondale Mills.
G&L sales grew 29.6 percent to $240.4 million from $185.5 million.
Apparel fabrics sales increased 36.2 percent to $223.7 million from $164.2 million. Operating income for apparel fabrics skyrocketed 82.8 percent to $18.1 million, representing 8.1 percent of net sales, from $9.9 million, or 6 percent.