Sales of non-U.S. produced fabrics were $20.6 million in the second quarter, up 65 percent over the prior year period, while sales of U.S. produced fabrics were $14.9 million, down 51 percent from the second quarter of fiscal 2006.
With respect to our U.S. operations, we have made considerable progress in changing our product strategy, reducing our manufacturing complexities and improving our cost structure, added Culp.
However, the lower sales volumes are having a significant impact on our expected operating results. Therefore, during the second quarter we made the decision to further reduce our employment levels across our remaining three U.S. manufacturing plants to more appropriately support current demand.
Currently, U.S. 'manufacturing' employment in the upholstery fabrics segment is 320 people compared with 534 people at the end of fiscal 2006 and 1,484 at the end of fiscal 2005.
In light of the continuing sharp declines in demand for U.S. produced fabrics, we will continue to evaluate our domestic strategy and production requirements.
We remain committed to taking whatever additional steps are necessary to achieve profitable U.S. upholstery fabric operations, and the company could take additional restructuring actions in the near future.
Balance Sheet Carefully managing our financial position is an important area of focus in fiscal 2007, Culp noted. At the end of the second fiscal quarter, our balancesheet reflects $9.7 million in cash and cash equivalents, unchanged from the amount at the end of fiscal 2006.
As of October 29, 2006, we also have $1.6 million in assets held for sale, which we expect will be sold over the next twelve months. Our capital spending plans for fiscal 2007 are expected to approximate $2.5 million, with $2.0 million already incurred for the year to date period.
marketing@alchempro.com
