Bush sales dip 1.6% in 2002; company plans to restructure
By Furniture Today Staff -- Furniture Today, March 9, 2003
Jamestown, N.Y. — Bush Inds., parent of ready-to-assemble major Bush Furniture, said that despite relatively strong sales in the fourth quarter, it lost $1.5 million in 2002 as sales dipped 1.6%.
Combined with weak demand in this year's first quarter, the results will require a restructuring this year to reduce costs, including closing a St. Paul, Va., factory and suspending dividends, the company said.
Bush reported sales of $88.5 million in the fourth quarter, up 4.2% from 2001's closing quarter. The net loss for the quarter of $1.2 million was an improvement from a loss of $5.9 million in the comparable 2001 period.
Total 2002 sales were $340.2 million, down from $345.8 million. The $1.5 million net loss for the year included a non-cash charge of $2.4 million for an accounting change downgrading the value of goodwill attributed to the company's German operations.
In addition to closing the Virginia factory, the restructuring will include what Paul Bush, chairman and chief executive officer, called "rightsizing the North American furniture business," including reducing management costs and phasing out unprofitable products at Bush Technologies and Bush Furniture Europe. Bush predicted a charge of up to $18 million for the restructuring.
There appears to be little short-term relief in sight. Weak demand and strong competition from imports has hurt both Bush Furniture and Bush Business Furniture in this year's first quarter, and the company is projecting sales 10% to 15% lower than last year's first quarter.
| Bush Inds. | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/28 | 2002 | 2001 | Change |
| (a) Includes income tax benefits of $283,000 in the 2002 quarter and $3 million in the 2001 quarter. (b) Based on average shares outstanding of 13.84 million in the 2002 quarter, 13.78 million in the 2001 quarter, 13.91 million in the 2002 year and 14.11 million in the 2001 year. (c) Includes a $2.4 million extraordinary charge, the cumulative effect of an accounting change. |
|||
| Sales | $88,498,000 | $84,950,000 | 4.2% |
| Operating income | 235,000 | (7,238,000) | — |
| Net income (a) | (1,186,000) | (5,926,000) | — |
| Earnings per share (b) | (0.09) | (0.43) | — |
| Year ended 12/28 | 2002 | 2001 | Change |
| Sales | $340,170,000 | $345,806,000 | (1.6%) |
| Operating income | 9,448,000 | 10,247,000 | (7.8%) |
| Net income | (c)(1,458,000) | 257,000 | — |
| Earnings per share (b) | (0.10) | 0.02 | — |
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