Chromcraft Revington, Inc. Reports Second Quarter Loss

Furniture World News

Chromcraft Revington, Inc. reported sales of $25,605,000 and a net loss of $6,038,000 for the three months ended June 28, 2008 as compared to sales of $32,769,000 and a net loss of $3,301,000 for the prior year period. For the first six months of 2008, sales were $53,068,000 and the net loss was $8,283,000 as compared to sales of $66,616,000 and a net loss of $4,479,000 for the prior year period. Residential furniture shipments in 2008 were lower in all categories primarily due to a weak retail environment, competitive pressure from imports, the impact of restructuring activities in the sales force and the discontinuation of certain domestic products prior to outsourced replacements being available. Weak consumer demand for residential furniture is primarily due to current economic conditions. Commercial furniture shipments were lower in the second quarter and first half of 2008 as compared to the prior year periods primarily due to a decrease in public waiting area seating product sales. Operating results in 2008 were negatively impacted by restructuring activities, inventory write-downs, employee severance expense and the lower sales volume. As previously reported, effective July 1, 2008, the Board of Directors of the Company appointed Mr. Ronald H. Butler as the new Chairman and Chief Executive Officer of the Company. Mr. Butler has been a director of the Company since 2004. He resigned his position as President and Chief Executive Officer of Pet Resorts, Inc., a privately held company, in order to accept the position with the Company. Mr. Butler previously served as an officer of other public companies, including Executive Vice President of Merchandising and Marketing of PetSMART, Inc. On June 12, 2008, the Company entered into a mutual separation agreement with Benjamin M. Anderson-Ray, the former Chairman and Chief Executive Officer of the Company, setting forth the terms of Mr. Anderson-Ray’s separation from employment and resignation as a director effective June 30, 2008. The Company recorded a pre-tax charge of $863,000 in the second quarter of 2008 for severance and other costs in connection with this agreement. Commenting on second quarter results, Mr. Butler said, “I am disappointed in the quarter’s results. While these results are driven by the declines in sales in a challenging economy and retail environment, we still believe the Company should continue to transition to its new business model. We will be focusing on reducing costs to match our present level of revenue, improving our supply chain and product offerings and driving the initiatives necessary to complete our transition. The business model transition may result in future impairments of certain assets, restructuring charges, as well as operating losses.” Mr. Butler announced several management changes at the Company. Frank T. Kane was promoted to Executive Vice President. Mr. Kane will continue to serve as the Chief Financial Officer of the Company, having served in that capacity since 1992. William Massengill was appointed Vice President of Operations at the Company and will now report directly to Mr. Kane. Mr. Massengill in his new position will be responsible for domestic operating activities and will have other general management responsibilities at the Company. Previously, Mr. Massengill was President of the Company’s CR Home Occasional, Inc subsidiary since 2000. Effective August 15, 2008, E. Michael Hanna will rejoin the Company as Senior Vice President of Sales at CR Home, the residential furniture division of the Company. Mr. Hanna previously held various management positions at the Company from 1989 until 2007, including President of the Company’s CR Chromcraft, Inc. subsidiary from 1999 until 2007. Mr. Butler also announced that Dennis Valkanoff, former Senior Vice President of Sales, has left the Company. Mr. Butler commented, “I am confident that using our Company and industry veterans like Frank Kane, Bill Massengill, and Mike Hanna in new and expanded roles will positively benefit the Company.” Chromcraft Revington businesses design, manufacture, source and market residential as well as commercial furniture throughout North America. The Company wholesales its residential furniture products under the CR Home banner with “Chromcraft,” “Peters-Revington,” “Silver Furniture,” “Cochrane” and “Sumter” brand names. It sells commercial furniture under the “Chromcraft” brand name.