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Amisco sees drop in 3Q sales, net earnings

By Furniture Today Staff -- Furniture Today, October 14, 2004

L'Islet, Quebec — L'Islet, Quebec— Metal furniture manufacturer Amisco said sales in its third quarter ended Aug. 28 declined 8.1% to C$11.8 million, as net earnings dropped 40.7% to C$739,652 from last year's comparable quarter.

Currently, 70% of Amisco's sales are to U.S. retailers, with distribution encompassing some 4,000 points of sale throughout North America.

President and CEO Réjean Poitras attributed the sales and earnings declines to rising steel prices and increased competition from Chinese imports.

"Most of our sales come from retailers who appreciate and make the most of our diversified products and short delivery times," he said. "Some of our customers still rely on low-cost mass production, a segment of our industry that Chinese manufacturers are increasingly taking over."

Sharp increases in the price of steel drove Amisco's gross margin down to 26.4%, compared with 32.4% in the third quarter of 2003, one of the best in the company's history.

"Despite certain productivity gains, our operating profitability was clearly affected by the price of steel, which is currently at record highs," Poitras said. "In fact, given the major imbalance between supply and demand worldwide, the price of our main raw material has soared since last winter."

Selling and administrative expenses dropped from C$2.6 million — about 20% of sales — in last year's third quarter to C$1.9 million, or 16.2% of sales, in the latest quarter. The company attributed the improvement to increased efficiencies in shipping and reductions in bad debt.

For the nine months, Amisco recorded sales of C$33.1 million, down 3.3% from C$34.3 million in the same 2003 period. Net earnings were C$1.7 million, down 26.4% from C$2.3 million last year.

"Considering the discontinuance of our office furniture line in the second quarter of 2003, sales of beds, tables, chairs and stools were comparable to those achieved last year," Poitras said.

Amisco has declared a semiannual dividend of 20 Canadian cents per common share, payable Nov. 12 to shareholders of record on Oct. 20.

"On an annual basis, this dividend is equivalent to double the dividend paid in prior fiscal years," Poitras said. "It attests to the solid financial position of the company, which is still long-term debt free."

Amisco(a)
Earnings per share are fully diluted.
Quarter ended 8/28	2004	2003	Change
(a) In Canadian dollars. (b) Based on average shares outstanding of 4 million in the 2004 periods and 3.8 million in the 2003 periods.
Sales	C$11,819,975	C$12,864,856	(8.1%)
Operating income	1,209,232	1,602,898	(24.6%)
Net income	739,652	1,246,290	(40.7%)
Earnings per share (b)	0.17	0.33	(48.5%)
9 months ended 8/28	2004	2003	Change
Sales	C$33,147,219	C$34,262,971	(3.3%)
Operating income	2,378,968	2,967,597	(19.8%)
Net income	1,678,126	2,278,530	(26.4%)
Earnings per share (b)	0.42	0.60	(30.0%)

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Amisco sees drop in 3Q sales, net earnings

Oct 15, 2004

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