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O'Sullivan's sales dip 9% in latest quarter

By Furniture Today Staff -- Furniture Today, February 3, 2002

LAMAR, Mo. — Second-quarter results for O'Sullivan Inds. Holdings, parent of O'Sullivan Furniture, showed a sales decrease of 9% but a slight increase in a key earnings category.

For the quarter ended Dec. 31, sales for the ready-to-assemble furniture major were $87.9 million, down from $96.6 million for the year-earlier quarter.

Net loss for the quarter was $1.9 million, compared with a net loss of $10.1 million in the comparable period a year ago, which included a $10.5 million pretax restructuring charge.

Adjusted earnings before interest, taxes, depreciation, amortization and merger-related expenses for the second quarter was $12.3 million, or 14.0% of net sales, up from $12 million, or 12.4% of net sales, for the year-ago period.

"Even with declining sales, we were able to increase our EBITDA in both dollars and as a percent of sales," said Richard Davidson, president and chief executive.

In the quarter, O'Sullivan took a pretax charge of $700,000 for its estimated accounts receivable exposure from the Chapter 11 filing of Kmart. The charge reflects some recovery from Kmart's reorganization, and EBITDA was not adjusted for the charge. O'Sullivan has resumed shipments to Kmart.

Net sales for the first six months were $174.2 million, off 6.9% from $187.1 million in the 2001 half. Net loss for the half was $6.3 million, compared with $15 million in the year-ago six months.

• O'Sullivan Inds.
Quarter ended 12/31	2001	2000	Change
Sales	$87,902,000	$96,579,000	(9.0%)
Operating income	8,470,000	7,790,000	8.7%
Net income	^(a)(1,866,000)	^(b)(10,072,000)	—
6 months ended 12/31	2001	2000	Change
Sales	$174,224,000	$187,098,000	(6.9%)
Operating income	14,767,000	12,378,000	19.3%
Net income	^(a)(6,304,000)	^(b)(15,019,000)	—
^(a) After preferred dividends of $3 million in the 2001 quarter and $6 million in the 2001 six months. ^(b) After preferred dividends of $2.6 million in the 2000 quarter and $5.1 million in the 2000 six months; includes pretax restructuring charges of $10.5 million in both periods and income tax benefits of $4 million in the 2000 quarter and $5.3 million in the 2000 six months. The 2000 six months also includes a $95,000 extraordinary charge, the cumulative effect of an accounting change.

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