Jennifer Convertibles Reports Third Quarter Decline
Furniture World Magazine
Jennifer Convertibles, Inc. announced its unaudited financial results for the third fiscal quarter ended May 26, 2007.
For the third quarter, revenue from continuing operations decreased by 6.3% to $33.3 million from the $35.5 million reported for the same period last year. For the nine-month period, revenue from continuing operations decreased 4.5% to $99.4 million from the $104.1 reported in the same period last year.
For the third quarter, the Company generated net income of $1,609,000 or $0.20 and $0.18 per basic and diluted share, respectively, compared to net income of $2,245,000 or $0.31 and $0.26 per basic and diluted share, respectively, for the same period last year. For the nine-month period, the net income was $2,230,000 or $0.28 and $0.25 per basic and diluted share, respectively, compared to a net income of $3,646,000 or $0.50 and $0.46 per basic and diluted share, respectively, for the same period last year.
Operating margins from continuing operations decreased during the current three and nine month periods to 32.0% and 30.5%, respectively, compared to operating margins from continuing operations of 32.5% and 31.4%, respectively, during the three and nine month periods last year.
For the third quarter, selling, general and administrative expenses from continuing operations increased to 26.9% as a percentage of revenue from continuing operations compared to 25.8% for the same period last year. For the nine-month period, selling, general and administrative expenses from continuing operations increased to 28.1% compared to 27.6% for the same period last year.
During the third quarter, the Company did not close any stores. During fiscal 2006, the Company closed three stores, of which the operating results were reported as discontinued operations.
Revenues from the closed stores reported as discontinued operations amounted to $70,000 and $345,000 in the thirteen and thirty-nine week periods ended May 27, 2006, respectively. Income (loss) from discontinued operations amounted to ($11,000) and $91,000 in the thirteen-week and thirty-nine week periods ended May 27, 2006, respectively. Income related to store closings approximated $182,000 in the thirty-nine week period ended May 27, 2006.
During the quarter, the Company opened one store and had no store closings. In addition, the Company opened a big box, full line home furniture retail store that sells products and accessories of Ashley Homestores, Ltd.
Commenting on the results Harley J. Greenfield, Chief Executive Officer of Jennifer said, "I am pleased to report that the changes to our merchandising and advertising strategies and adjustment to margins which returned us to profitability during our second fiscal quarter continued to be successful. We achieved a 42% increase in income from operations during the quarter to $1,470,000 from the $1,032,000 reported in the second fiscal quarter despite the furniture industry being significantly depressed. Our balance sheet remains strong with over $15 million in cash and short term investments."
Mr. Greenfield added, "We recently opened our first Ashley Furniture HomeStore on Glen Cove Road in Carle Place, New York. Our grand opening of this 40,000 square foot store took place in mid-June and we expect this location to produce substantial revenues and additional profitability to fuel Jennifer's growth. We are currently in the process of negotiating the lease for our second Ashley Furniture HomeStore location."
Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 171 Jennifer Convertibles® stores and is the largest specialty retailer of leather furniture with 16 Jennifer Leather stores. As of May 26, 2007, the Company owned 163 stores and licensed 24 (including 23 owned and operated by a private company on a royalty free basis.) and operates one licensed Ashley Furniture HomeStore.