NEW YORK — Isaac Kier, chairman and chief executive officer of Lida Inc., found himself fielding a bunch of questions at last week’s annual meeting from shareholders concerned not only about the company’s sagging 1993 performance, but also about its future.
While making no specific forecasts, Kier said the vertically integrated fabric converter is eyeing improved results, based on three key elements:
- A new product line and printing process.
- Reducing selling, general and administrative costs.
- Improving efficiencies at its three North Carolina facilities.
“As part of our planned, two-year, $15 million capital expansion, we’ve unveiled our Amida product line of rayon and Lycra blends, currently being made at Gastonia,” Kier said. “We’ve also started the Corona printing process, which allows maximum penetration of dyestuffs in Lycra-blend fabrics, at Bessemer City.”
One shareholder told Kier that he was concerned over DuPont’s plan to increase Lycra spandex production, noting that as more spandex production begins next year at Bayer and Globe Manufacturing, Lida — a heavy user of Lycra — could lose its competitive edge.
“What worries me is that once we start getting a lot more spandex in the market, more firms will start producing the same types of fabrics Lida makes,” the shareholder said.
“Lycra is a substantial portion of our product mix,” Kier answered. “But we do Lycra in broad, novel applications, so it would be difficult for one specific firm to capitalize on all the Lycra markets we are in.”
Another shareholder told Kier, “While I laud your fiscal responsibility in improving costs, the company’s 1993 sales [$88.5 million] are far below what they were in 1991 [$107.9 million].”
In 1993, the company posted a loss of $3.4 million, against net income of $2 million in 1992.
“Last year was a difficult one for Lida,” he said. “Although we lost money in the first quarter, we did have our first operating profit in four quarters.”
In the quarter ended April 3, Lida lost $66,000 against a profit of $318,000, or 4 cents a share, a year ago. The firm had an operating profit of $271,000, against $610,000 in the year-ago quarter. Sales were down 8.4 percent, to $22.5 million from $24.6 million.
“Unit sales were up in 1993,” Kier told him. “Still, our business is impacted by the printed fabric business, which, at this point, is not strong.”
Kier said that while the firm’s printed fabric business remains weak, manufacturing efficiencies have improved.
The meeting, at the offices of Orrick, Herrington & Sutcliffe here, the company’s counsel, lasted 45 minutes, including the reelection to the board of Kier and five other corporate directors.
Kier reminded the shareholders that “myself, my brother Nelson [president and chief operating officer] and my father, Ralph [vice chairman and treasurer] took 30 percent pay cuts at the end of 1993, and will continue that through 1994.”
As reported, the cuts, figured on an annualized basis, went into effect in the fourth quarter of 1993. According to Lida’s latest proxy statement, Isaac Kier’s 1993 salary fell to $356,729, from $362,785 in 1992. Nelson Kier’s salary dropped to $321,734 from $332,243, and Ralph Kier’s eased to $223,081, versus $252,888 a year earlier.
Kier said the impact of the lower salaries will be felt in 1994.