Chromcraft Revington, Inc. Reports 7.1% Sales Decline

Furniture World News

Chromcraft Revington, Inc. reported sales for the three months ended July 1, 2006 of $40,320,000, representing a 7.1% decrease as compared to sales of $43,401,000 for the prior year period. Second quarter shipments of occasional, bedroom, dining room and commercial furniture were lower than the prior year period while shipments of upholstered furniture were slightly higher. Net earnings for the second quarter of 2006 were $676,000, or $.15 per share on a diluted basis, as compared to $2,093,000, or $.48 per share on a diluted basis, for the same period last year. For the six months ended July 1, 2006, sales were $86,241,000, representing a 2.1% decrease as compared to sales of $88,060,000 for the prior year period. For the first half of 2006, lower shipments of bedroom, commercial and dining room furniture were partially offset by higher sales of occasional and upholstered furniture. Net earnings for the six months ended July 1, 2006 were $1,805,000, or $.40 per share on a diluted basis, as compared to $4,349,000, or $1.01 per share on a diluted basis, for the year ago period. Commenting on these results, Frank T. Kane, Vice President and Chief Financial Officer, said that the sales decline in both periods was primarily attributable to reduced shipments of bedroom furniture due to competitive pressure. He added that net earnings for 2006 were primarily impacted by a reduced domestic production level which affected fixed cost absorption and manufacturing efficiencies, an unfavorable sales mix, and higher manufacturing, selling and administrative costs. He commented that sales results for 2006 reflect increased shipments of imported finished furniture as compared to the prior year period. Kane pointed out that the Company's financial position remained strong with available cash and no bank borrowings at quarter end. Looking forward, Benjamin M. Anderson-Ray, Chairman and Chief Executive Officer, noted that the Company recently consolidated its occasional and casual dining furniture sales forces to provide improved service and to build stronger relationships with customers. Anderson-Ray said, "By combining the sales forces of the Chromcraft, Peters-Revington and Silver Furniture brands, we will provide customers more unified, dedicated and stronger sales representation as well as a wider selection of products." He also stated that a goal of the integration of the sales organizations is to expand distribution coverage and improve sales effectiveness. He added that the unified sales force will be fully focused on the sales growth of these product lines. Anderson-Ray also commented on the strategic direction of the Company as it continues to adapt to the global furniture marketplace. He stated that the Company is committed to leveraging a hybrid strategy utilizing significantly greater global sourcing combined with value added U.S. assembly and distribution operations to provide customers with value, product selection and service. The Company continues to increase its global sourcing of lower cost furniture parts and finished goods to improve its overall consumer and customer value proposition. In addition, he noted that the Company's expanded domestic build-to-order furniture programs have been well received and are growing consistently. Anderson-Ray pointed out that as the Company adapts to the global furniture market and shifts its focus to increased utilization of a global supply chain, restructuring charges, asset impairments, transition costs and/or increased operating expenses may be necessary in the future. Chromcraft Revington businesses design, manufacture and market residential and commercial furniture throughout the United States. The Company wholesales its products under the "Chromcraft," "Peters-Revington," "Silver Furniture," "Cochrane Furniture" and "Sumter" brand names.