EveryWare Reports $26.9 Million Loss in Q2
LANCASTER, Ohio-Rising costs on a variety of levels deepened the red ink for EveryWare Global in its fiscal second quarter. The company posted a net loss of $26.9 million, compared to a second-quarter net loss of $2.2 million last year.
Gross margin in the quarter, which ended on June 30, plummeted by 1,624 basis points to 11.7 percent, the result of substantially lower production levels, higher inventory write-downs, higher employee benefit costs and the impact of the company's acquisition of Metalrax, which took place last year. Selling, general and administrative expenses increased 59 percent in dollars and 1,102 basis points as a percentage of sales, to 29.2 percent. SG&A climbed because of higher consulting and legal fees incurred to help in the development of cost savings and restructuring initiatives, including the negotiation of the amendment to the company's term-loan and asset-backed loan facilities.
Total revenue was down 1 percent to $99.8 million. Much of the revenue declines occurred in the food-service segment and consumer segment, and because of EveryWare's decision to temporarily close its two U.S. manufacturing plants to preserve cash and right-size inventory. Reduced order fulfillment rates and the company's decision not to pursue lower margin business also played a part in the revenue downturn.
Sam Solomon, EveryWare's CEO, said, "We resolved our liquidity and covenant issues and right-sized our manufacturing capacity. Now we are focused on operational initiatives and providing excellent service to our customers."