Friday May 16th, 2014 - 9:51AM
EveryWare Global, Inc. announced additional layoffs in its efforts to position itself for growth after a disappointing first quarter, for the three months ended March 31, 2014.
Sam Solomon, interim CEO of EveryWare stated: "While our results over the past several quarters have been disappointing, we are taking actions that we believe will better position us for future growth. We are temporarily idling our North American manufacturing facilities and furloughing a number of hourly and salaried employees to reduce inventory and improve liquidity. We intend to resume manufacturing in three to four weeks and as usual during plant shutdowns, we will continue to service our customers and distribute products from existing inventory. While our initiatives will take time to have an impact on the business, I remain confident in the long-term prospects of this business."
EveryWare reported that total revenue for the first quarter of 2014 decreased $4.5 million, or 4.5%, to $94.8 million from $99.3 million in the first quarter of 2013. The decrease in revenue is primarily attributable to a $5.5 million decline in foodservice segment revenues and a $2.2 million decline in consumer segment revenues. According to the company, these declines were due in part to the effects of adverse weather conditions during the first quarter and its decision not to pursue lower margin beverageware business. Partly offsetting these declines was an increase in international segment revenues of $3.4 million.
Cost of sales increased $7.5 million, or 10.2%, from $73.5 million for the three months ended March 31, 2013, to $81 million for the three months ended March 31, 2014. The increase is primarily due to $7.2 million of unfavorable changes in cost absorption resulting from lower production levels, higher utility costs, and to a lesser degree higher freight and packaging costs, and the impact of its Metalrax acquisition.
Gross margin as percentage of total revenue was 14.6% for the three months ended March 31, 2014, as compared to 26% for the three months ended March 31, 2013. The change in gross margin rate was primarily due to the unfavorable changes in cost absorption resulting from lower production levels, higher factory costs, and the mix of sales by segment for the year.
Total operating expenses for the first quarter of 2014 increased $5.5 million, or 26.7%, to $26 million from $20.5 million for the first quarter of 2013. The increase was primarily the result of employee separation expenses, consulting fees to assist in the development of cost savings initiatives, impairment charges and costs associated with Metalrax's operations.
EBITDA for the first quarter of 2014 resulted in a loss of $7.7 million, down from positive EBITDA of $9.1 million in the first quarter of 2013. The decrease in EBITDA was primarily due to the unfavorable changes in cost absorption resulting from lower production levels, higher factory input costs, margin impact on the decrease in revenues, and higher operating expenses resulting from employee separation, impairment charges, and consulting expenses.
Adjusted EBITDA for the first quarter of 2014 resulted in a loss of $3.4 million down from positive Adjusted EBITDA of $10.7 million in the first quarter of 2013.