Natuzzi earnings climb 16.6% in 1Q on 4.3% sales increase
By Joan Gunin -- Furniture Today, May 26, 2002
SANTERAMO IN COLLE, Italy — SANTERAMO IN COLLE, Italy — First-quarter net income for Italian upholstery manufacturer Natuzzi increased 16.6% from a year earlier, to $22.2 million. Net sales for the same period increased 4.3% to $187.3 million.
Sales in the Americas declined 3% in dollars to $85.5 million, but rose 8% on a unit basis to 386,294 seats.
First-quarter 2002 net cash flow from operations totaled $16.1 million, down 17.1% from the same period last year. On a per share basis, net operating cash flow was 30 cents, a decrease of 15.6 % from last year.
"We are pleased with first-quarter earnings, which benefited from lower-than-expected leather prices and transportation costs," said Pasquale Natuzzi, the company's chairman and chief executive officer. "Furniture sales rose at a slower pace in the first quarter, but our plan calls for an increase in production capacity in order to achieve our target of low double-digit unit growth for 2002."
Leather upholstery sales were $143 million for the first quarter, down 0.9% from a year ago. Fabric upholstery (microfiber) sales rose 57.3 % to $28.4 million.
Total seat units sold in the first quarter of 2002 grew 4.7% to 772,485. Unit volume in the Americas rose 8% while unit volume in Europe (including Italy) advanced 3.7% percent to 346,759 seats. Seats sold in the rest of the world declined 14.2% to 39,432 units due to lower retail sales.
First-quarter 2002 gross profit increased 10% from the comparable 2001 quarter, to $68.8 million. Over the same period, Natuzzi's gross profit margin increased to 36.7% from 34.8%, due to lower leather prices.
Pasquale Natuzzi said that orders were coming in "at a low double-digit growth rate. If the current trends in orders and costs continue for the remainder of the year, we might exceed our net profit margin forecast of 8% to 9% for 2002." In the first quarter, net margin was 11.9%, up from 10.6% for the same period a year ago.
Natuzzi said its product order backlog stands at 6½ weeks, close to the 6-week period it considers optimum.
| Quarter ended 3/31 | 2002 | 2001 | Change |
|---|---|---|---|
| Sales | 213,600,000 | 204,700,000 | 4.3% |
| Operating income | 31,600,000 | 31,300,000 | 1.0% |
| Net income | (b) 25,300,000 | (c) 21,700,000 | 16.6% |
| Earnings per share (d) | $0.41 | $0.36 | 13.9% |
| (a) In euros, except for earnings per share, which are in U.S. dollars. (b) Includes a 300,000 euro net foreign exchange gain and 100,000 euros in minority interest expense. (c) Includes a 4.7 million euro net foreign exchange loss. (d) Converted at the rate of U.S.$1=.877 euros for the 2002 quarter and U.S.$1=.9221 euros for the 2001 quarter. | |||
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