Shermag earnings fall 33.8%
By Furniture Today Staff -- Furniture Today, March 24, 2002
SHERBROOKE, Quebec — SHERBROOKE, Quebec — Shermag's gross revenues in furniture in the fiscal third quarter were flat with the same period a year ago, although net revenues declined 4.5%, mainly because of a change in the manufacturer's sawmill operations.
Earnings fell 33.8% to C$2.1 million in the quarter ended Dec. 28 because of higher selling and administrative costs, said Jeff Casselman, president and chief executive officer. The cost increase, associated with the termination of certain lease and employment contracts, was reported at just over C$1 million.
Casselman said the company's sales performance shows it has gained market share with other retailers since the demise last year of its largest customer, HomeLife, which had accounted for about C$13 million of Shermag's annual furniture sales.
In the third quarter, the company posted net revenues of C$40.5 million. Most of the 4.5% decline from a year ago was attributed to Shermag's sawmill sector.
Until recently, the case goods and contemporary upholstery producer used its mill to serve a number of outside customers, but the division is exiting that business to focus on filling Shermag's own needs.
Casselman added the company has reduced its debt by more than C$8 million so far this fiscal year.
"This is consistent with the plans outlined more than a year ago which called for a conservative approach to investment, better inventory control and cash from operations to improve the balance sheet and thus prepare the company to take advantage of growth opportunities," he said.
He added that recent efforts at cost containment, improving the efficiencies of the lumber operations, and new product should stand Shermag in good stead as 2002 unfolds.
| Shermag (a) | |||
|---|---|---|---|
| Owns Mobilier Shermag, Mobilier HPL, Nadeau and Scanway Chanderic | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/28 | 2001 | 2000 | Change |
| Revenues | C$40,499,000 | C$42,403,000 | (4.5%) |
| Operating income | 5,573,000 | 6,408,000 | (13.0%) |
| Net income | 2,113,000 | 3,190,000 | (33.8%) |
| Earnings per share | 0.16 | 0.24 | (33.3%) |
| 9 months ended 12/28 | 2001 | 2000 | Change |
| Revenues | C$110,105,000 | C$112,833,000 | (2.4%) |
| Operating income | 13,919,000 | 19,357,000 | (28.1%) |
| Net income | 4,251,000 | 9,928,000 | (57.2%) |
| Earnings per share | 0.32 | 0.75 | (57.3%) |
| (a) In Canadian dollars. | |||
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