O'Sullivan posts loss despite sales gain
By Furniture Today Staff -- Furniture Today, February 2, 2005
ROSWELL, Ga. -- Despite a $17 million net loss, O'Sullivan Inds. management said the ready-to-assemble furniture producer made progress in its latest quarter with a 1.5% sales gain and a nearly $10 million improvement in cash flow.
Sales of $66.2 million in its second quarter ended Dec. 31 also were up 5.7% from the first quarter, the second sequential quarter of sales growth."Organizational changes and a focused strategic plan are beginning to manifest themselves in the marketplace," said Bob Parker, president and CEO since May. He said O'Sullivan continued to hire key employees during the quarter, and completed the move of its headquarters to Roswell from Lamar, Mo.A planned reduction in inventory and a focus on cash management led to positive cash flow of $6.9 million during the quarter, compared with a negative $3 million a year earlier, the company said.The highly leveraged manufacturer's net loss stemmed partly from a $3.2 million operating loss, partly from factory overhead not absorbed by production as the company sold off inventory, and partly from higher costs for raw materials, including particleboard. O'Sullivan also paid $8.9 million in interest and $4.9 million in dividends and accretion on preferred stock."We are committed to this cash management focus and believe our efforts to build a consumer-focused, market-driven company will begin to show more favorable results by the end of fiscal '05," Parker said. For the remainder of this fiscal year, which ends June 30, he expects sales will be lower than the previous year in the mid-single-digit range, with earnings also lower because of higher materials costs, continued inventory reduction, and a higher mix of promotionally priced products.
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O'Sullivan posts loss despite sales gain
Feb 13, 2005
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