NEW YORK — Dominion Textile named John Boland chief executive officer Tuesday, while significant improvements in its yarn and apparel fabrics businesses saw its earnings more than double in the second quarter ended Dec. 31.
Boland succeeds Charles H. Hantho, who will stay on as chairman. Boland had been president and chief operating officer since September. Prior to that he was president and ceo of Swift Textiles, Dominion’s denim subsidiary.
In the quarter, the Montreal-based company earned $6 million ($8.6 million Canadian at current exchange rates) against C$3.4 million a year ago after a C$1.8 million after-tax special charge. The latest quarter net also benefited from lower interest and taxes.
Sales climbed 22.8 percent to $258.7 million (C$396.5 million) from C$322.8 million. “Our second quarter results were in line with expectations,” said Hantho. “Despite much higher raw material costs, we are confident about achieving our year-on-year earnings improvement in fiscal 1995.”
In the quarter, denim sales jumped 27.8 percent to $110.7 million (C$158.1 million), aided by increased shipments of specialty denim and exports. All facilities operated at capacity levels. However, higher cotton costs dented margins and this should continue.
The company said the overall outlook is positive for the second half. Inventories are in line, bookings are strong and denim continues to outperform total apparel sales at retail. Commodity yarn sales jumped 32.9 percent to $43.5 million (C$62.2 million), fueled by capacity expansion in the U.S. and higher selling prices in both the U.S. and Canada. These factors helped offset higher raw materials costs and boosted margins.
Specialty yarns’ second quarter performance suffered from recent rationalization, with trade sales down 15.8 percent to $11.4 million (C$16.3 million). A focus on higher-margin goods and a reduction of fixed costs generated higher profits. Domestic demand was strong, and exports beat plan. The division has a strong order book through year-end, but margins will suffer from higher costs of imported raw materials. In the apparel fabrics unit, sales of Klopman International advanced 14.4 percent to $40.4 million (C$57.7 million). Improved economies in most European countries helped boost both volumes and selling prices, though Italy and Spain remain under pressure because of their political climates.
Favorable exchange rates and lower manufacturing costs contributed to significant margin improvement, the company said, with recent price increases helping to offset higher raw materials costs. In addition, investments in a plant in Tralee, Ireland, have lowered the costs of griege fabric, and sourcing from a joint venture partner in Tunisia will generate profit increases in the second half, the company said.
— Fairchild News Service