Tandus Group has reported earnings for the second quarter (13 weeks) and six months year to date (26 weeks) ended July 31 for its Collins & Aikman Floorcoverings Inc. and subsidiaries.

For the second quarter 2004, revenues were $99.6 million compared to $93.9 million for the prior year. Selling, general and administrative expenses were $20.1 million compared to $19.5 million for the prior year. Adjusted EBITDA was $22.1 million compared to $18.2 million for the prior year. As a percentage of sales, adjusted EBITDA margin for the period was 22.2 percent vs. 19.4 percent for the prior year.

Tandus said the increase in revenues was due to higher demand throughout the U.S. specified commercial market. In particular, the corporate office market was up 18.5 percent from the prior year. The company's institutional end markets of education, healthcare, and government were up 7.3 percent from the prior year.

Selling, general and administrative expenses increased primarily due to increased salaries, taxes and benefits of $800,000, marketing and promotional expenses of $500,000, partially offset by lower legal and professional fees of $900,000. A significant portion of the increase in salaries, taxes and benefits was attributable to higher health care costs.

For the 26 weeks ended July 31, revenues were $177.3 million vs. $165.5 million for the prior year. Selling, general and administrative expenses were $41.1 million compared to $36.9 million for the prior year.

The increase in revenues, as with the second quarter results, was due to higher demand throughout the U.S. specified commercial market. The corporate office market was up 26.8 percent from the prior year. And the company's institutional end markets of education, healthcare, and government were up 7.2 percent from the prior year.

Selling, general and administrative expenses increased primarily due to increased salaries, taxes and benefits of $1.8 million, marketing and promotional expenses of $1.0 million, foreign currency losses of $1.1 million and $500,000 of higher commissions.

The higher expenses in the year to date results for salaries, taxes and benefits reflect in part the continued timing of the implementation of the selling strategy as well as overall higher healthcare costs. Marketing and promotional expenses were driven principally by the timing of certain product launches and should be in line with prior year experience the remainder of the year.