MONTES CLAROS, Brazil—Springs Global transformed a $7 million net loss from the second quarter of last year into net income of $11.4 million in this year’s second quarter.
The company accomplished this in spite of a 13.9 percent drop in net sales, which totaled $303.6 million in the quarter; and a 29.3 percent hike in selling expenses. Much of the pickup occurred because of a gain in net currency exchange variations of $24.5 million, up 44.5 percent from the second quarter of last year. According to a Springs statement, this increase resulted in a fair market value gain as of June 30 on the valuation of its loans and financing arrangements valued in U.S. dollars.
The decline in second-quarter net sales included a decrease of 18.4 percent in net sales of fashion bedding, a 19.5 percent fall in net sales of bath products and a drop of 0.1 percent in net sales of utility bedding.
Acknowledging the positive bottom-line picture, Springs said in a letter to its shareholders that the result “does not satisfy us. We recognize that there is still a lot to be done, particularly related to our sales growth in the North American market.” The company said the slowdown in the North American economy was a prime cause for the sales shortfall in the second quarter.