Keller losses mount
By Furniture Today Staff -- Furniture Today, November 23, 2003
Corydon, Ind. — Case goods manufacturer Keller said third-quarter sales dropped 39.6% to $5 million, and its loss grew to $5.9 million from a loss of $855,245 in last year's third quarter.
While actual cost of sales for the period was down 24.6% to $5.9 million, and selling, general and administrative expenses fell 7.1% to $1.9 million, several big one-time charges led to the large loss.
For the nine months, sales were off 36.4% to $17.7 million, and the loss was $8.1 million, compared to a loss of $2 million last year.
Management attributed the third-quarter sales drop to continued weakness in the economy combined with competitive pressures from imports, leading to slow sales in bedroom and dining room furniture. Plant closings and a revamping of its line heavily affected the bottom line.
Creation of a reserve for obsolete and slow-moving inventory added $300,000 to the cost of sales. The write-off of fixed assets resulted in a $391,684 charge, and an adjustment in the value of fixed assets brought a $2.9 million charge. The latter two were linked to the closure of Keller's Corydon plant.
Keller also recorded a third-quarter charge of $233,000 related to the closing of its Culpepper, Va., plant. That plant has been sold for $2.1 million which, when added to cash and investments at the end of the third quarter, gave the company $6.1 million in liquid assets.
Keith Williams, president and chief executive officer, said, "We feel great about our financial position going into next year."
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