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ITXN.0679..Annual Report.Sales 610m / Net 17m

Results of Operations

Net sales and income from continuing operations before income taxes for the Company's reportable segments are presented below (in thousands). The Company evaluates performance and allocates resources based on profit or loss before interest, income taxes, restructuring and impairment charges, certain unallocated corporate expenses, and other income (expense) - net. Intersegment sales and transfers are recorded at cost or at arms' length when required by certain transfer pricing rules. Intersegment net sales for 2015 and 2014 were primarily attributable to commission finishing sales of $0.5 million and $0.3 million, respectively.

Year Ended
December 31,
2015 2014

Net Sales:
Bottom-weight Woven Fabrics $ 568,223 $ 563,167
Commission Finishing 41,877 31,712
All Other 781 891
610,881 595,770
Intersegment sales (474 ) (324 )
$ 610,407 $ 595,446

Income (Loss) From Continuing Operations Before Income
Taxes:
Bottom-weight Woven Fabrics $ 48,950 $ 34,356
Commission Finishing 2,935 1,473
Total reportable segments 51,885 35,829
Corporate expenses (12,135 ) (10,261 )
Other operating income - net 4,349 3,368
Impairment charge (1,199 ) -
Restructuring charges - (3,116 )
Interest expense (27,366 ) (28,789 )
Other income (expense) - net 2,791 14,016
18,325 11,047
Income tax expense (1,089 ) (3,486 )
Equity in losses of unconsolidated affiliates (105 ) (109 )
Income from continuing operations 17,131 7,452
Discontinued operations, net of income taxes:
Loss from discontinued operations (66 ) (6,559 )
Loss on disposal of net assets - (501 )
Loss from discontinued operations (66 ) (7,060 )
Net income $ 17,065 $ 392

Comparison of Year Ended December 31, 2015 to Year Ended December 31, 2014

Consolidated: Consolidated net sales in 2015 and 2014 were $610.4 million and $595.4 million, respectively. Higher sales volumes resulting from increased demand for denim and new programs in the worsted wool non-government uniform fabrics, higher sales volumes and an improved product mix related to new patterns in the commission finishing business, and higher selling prices and an improved product mix in the technical fabrics and synthetic fabrics businesses were partially offset by lower demand in the synthetic fabrics business, decreased sales volumes resulting from U.S. governmental budget constraints and program changes affecting certain military uniform businesses, competitive pressures in the airbag business, governmental budget constraints, and employment declines in the oil and gas industry affecting certain technical fabrics businesses, as well as lower selling prices and a less favorable product mix primarily in the denim and municipal government wool uniform businesses due to lower cotton costs, fashion shifts, and competitive pricing pressures.

Gross profit in 2015 was $87.6 million, or 14.4% of net sales, compared to $71.4 million, or 12.0% of net sales, in 2014. Gross profit margins increased primarily due to lower raw material and energy costs, higher sales volume in the Company's denim fabric and municipal government wool fabric businesses, lower manufacturing costs due to higher production, higher selling prices and an improved product mix in the synthetic fabrics, technical fabrics and U.S. government wool uniform businesses, as well as favorable impacts from changes in foreign currency exchange rates. Such improvements were partially offset by lower selling prices and a less favorable product mix primarily in the denim and municipal government wool uniform businesses, higher labor costs, as well as lower sales volumes in the U.S. government wool uniform, synthetic fabrics, technical fabrics and airbag businesses. Operating income in 2015 was $42.9 million compared to $25.8 million in 2014. Operating income increased in 2015 as compared to the prior year period primarily due to the higher gross profit margins described above, lower restructuring charges of $3.1 million, and higher gains on disposal of property, plant and equipment of $0.8 million, partially offset by higher selling and administrative expenses of $2.1 million and a note receivable impairment charge of $1.2 million, each as described below....

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Common stock (par value $0.01 per share; 150,000,000 shares authorized; 17,468,327 shares issued and outstanding at December 31, 2015 and 2014)

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