INTERCO REPORTS IMPROVED EARNINGS

ST. LOUIS Interco Inc. has reported improved earnings for the third quarter, having emerged from bankruptcy.

Interco, which makes furniture and shoes, said its earnings for the quarter that ended Aug. 31 rose 5.5 percent, to $29.4 million from $27.9 million in the same period last year.

That income comparison is based on earnings excluding interest expense, income taxes, depreciation and amortization as well as expenses related to the company's bankruptcy reorganization, elimination of debt and accounting changes.

Interco's total net income in the quarter actually jumped to $1.2 billion, from $12.9 million. But that figure includes some unusual one-time gains related to the company's emergence from bankruptcy Aug. 3. It was buoyed by a $1 billion gain from the elimination of debt in the reorganization and an additional gain of $149.4 million from accounting adjustments after bankruptcy minus reorganization expenses.

As for the company's core furniture and shoe businesses, earnings from operations rose 8.7 percent in the quarter - to $21.4 million from $19.6 million in the year-earlier period.

Sales for the company's fiscal second quarter were $380.6 million, a 6.6 percent increase from the same quarter last year.

Interco makes Broyhill and Lane furniture as well as Florsheim and Converse shoes. Furniture sales in the quarter rose 13.7 percent, to $216.5 million, although the company said orders were stronger earlier in the year. Footwear sales fell 1.5 percent, to $164 million, reflecting Florsheim's closing of some retail stores.