Natuzzi net income up 78.4% in 2nd qtr.
By Joan Gunin -- Furniture Today, September 8, 2002
Santeramo in Colle, Italy — Natuzzi said second-quarter net income was up 78.4% from a year earlier, mainly because of lower raw materials costs and foreign-exchange gains.
The upholstery producer earned $27.4 million in the period on sales of $199.3 million, up 3.3% from the same period in 2001. For the first half, sales were up 3.8% to $386.7 million.
"Despite the weak performance of the European market, which resulted in substantially less sales growth in the second quarter than anticipated, net earnings increased significantly as a result of lower leather and selling costs and a gain on foreign exchange," said Pasquale Natuzzi, chairman and chief executive officer.
Upholstery sales in the second quarter totaled $182.3 million, up 4.5% from a year ago. Unit sales rose 5.2% to 801,284 seats.
Sales in the Americas rose 10.7% to $92.1 million, while in Europe upholstery sales decreased 2.9% to $79.2 million. Upholstery sales in the rest of the world increased 13.2% to $11 million.
"In light of Europe's weakening economic conditions and declining orders there, which are being only partially offset by continued strong sales in the U.S., we expect full-year unit sales to be the same as last year's level," Natuzzi said.
"However, given current cost trends, we still expect our net profit margin to meet or slightly exceed our goal of 8% to 9% for 2002," he said.
Leather upholstery sales in the latest quarter came to $157.1 million, up 3.2% from a year earlier. Fabric upholstery sales rose 13.2% to $25.3 million. In the first half, fabric products accounted for 15.2% of upholstery sales.
Sales of the company's Italsofa promotional brand nearly tripled from a year ago to $34.2 million compared with $13.3 million in second-quarter 2001. Natuzzi-branded upholstery sales declined about 3% to $148.2 million.
The company said its gross profit in the second quarter increased 12.2% to $72.5 million. The gross profit margin rose to 36.4% from 33.5%, because of lower leather prices.
Second-quarter operating income increased 24.2% to $29.7 million. The operating margin grew to 14.9% from 12.4% last year.
| Natuzzi (a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2002 | 2001 | Change |
| (a) In euros, except for earnings per share, which are in U.S. dollars. (b) Includes net foreign currency gains of 5.5 million euros in the 2002 quarter and 5.9 million euros in the 2002 six months. The 2002 quarter also includes 100,000 euros in minority interest income. (c) Includes net foreign currency exchange losses of 5.5 million euros in the 2001 quarter and 10.3 million euros in the 2001 six months. (d) Converted at the rate of U.S. $1=.9185 euros for the 2002 quarter, U.S. $1=.8736 euros for the 2001 quarter, U.S. $1=.8981 euros for the 2002 six months and U.S. $1=.8972 euros for the 2001 six months. |
|||
| Sales | 217,000,000 | 210,100,000 | 3.3% |
| Operating income | 32,300,000 | 26,000,000 | 24.2% |
| Net income | (b)29,800,000 | (c)16,700,000 | 78.4% |
| Earnings per share(d) | $0.50 | $0.27 | 85.2% |
| 6 months ended 6/30 | 2002 | 2001 | Change |
| Sales | 430,600,000 | 414,800,000 | 3.8% |
| Operating income | 63,900,000 | 57,300,000 | 11.5% |
| Net income | (b)55,100,000 | (c)38,400,000 | 43.5% |
| Earnings per share(d) | $0.91 | $0.62 | 46.8% |
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