O'Sullivan's operating earnings rise
By Furniture Today Staff -- Furniture Today, October 28, 2001
LAMAR, Mo. — O'Sullivan Inds. Holdings, parent of ready-to-assemble furniture major O'Sullivan, reported an increase in operating earnings in its first quarter even though sales declined as expected.
Sales for the three months ended Sept. 30 were down 4.6% to $86.3 million, but adjusted EBITDA — or earnings before interest, taxes, depreciation and amortization — rose 11.6% to $10 million.
The net loss for the highly leveraged company was $4.4 million, compared with a net loss of $4.9 million in the first quarter of 2000.
The company said that weak consumer demand and the demise of Montgomery Ward, a major account, contributed to the sales decline. "At the current time, we do not see any dramatic improvements to the retail environment," said President Richard Davidson. He projected a sales decline of 5% to 8% in the current quarter.
On a positive note, Davidson said the company had made a $5 million prepayment on debt. "In this light, we are cautiously pleased with our performance and our strong position in the market," he said.
| Quarter ended 9/30 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | $86,322,000 | $90,519,000 | (4.6%) |
| Operating income | 6,297,000 | 4,588,000 | 37.2% |
| Net income(a) | (4,438,000) | (4,947,000) | — |
| (a) After preferred dividends of $3 million in the 2001 quarter and $2.6 million in the 2000 quarter; includes income tax benefits of $776,000 in the 2001 quarter and $1.3 million in the 2000 quarter. | |||
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