Rowe 4Q shipments, profits sag
By Furniture Today Staff -- Furniture Today, January 30, 2005
McLean, Va. — The Rowe Companies said shipments and gross profits increased in its year ended Nov. 28, but sagged in the fourth quarter because of manufacturing problems.
The company, which owns upholstery maker Rowe Furniture and retail chain Storehouse, said problems with its Enterprise Resource Planning computer system continued, reducing productivity.
President Gerald Birnbach told analysts he couldn't say when the problems might be resolved, describing them as "frustrating," since Rowe Furniture had plenty of orders but couldn't move merchandise out of the factory fast enough. Rowe's backlog was $17.7 million at year's end, up from $12 million the year before.
Shipments in the fourth quarter fell 5.5% to $73.1 million from the prior year's $77.3 million. Gross profits plunged 16.1% to $25.2 million from the prior year's $29.2 million.
In the quarter, sales and administrative expenses were $25.4 million, up 6% compared to the previous year's $24 million, mainly due to higher retail selling expenses associated with higher volume, and increased store occupancy expenses tied to new stores.
The net loss in the latest quarter, including results of discontinued operations, was $235,000, compared to net earnings in the prior year of $2.6 million.
Net earnings from discontinued operations were $119,000 in the 2004 quarter, compared to $46,000 in the prior year's quarter.
The net loss from continuing operations in the fourth quarter totaled $354,000, compared to a profit in the prior year's period of $2.6 million.
For the year, the company reported a 6% increase in net shipments to $295.2 million, led by a 14.3% increase in retail sales. Gross profits improved 3.4% to $103.6 million from the prior year's $100.1 million.
Birnbach said Storehouse had a 5% increase in same-store sales for the year. Net earnings from continuing operations were $960,000 in 2004, nearly even with the prior year.
| The Rowe Companies | |||
|---|---|---|---|
| Owns Rowe Furniture and Storehouse | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 11/28 | 2004 | 2003 | Change |
| (a) Includes net earnings from discontinued operations of $119,000 in the 2004 quarter and $72,000 in the 2004 year. The 2004 quarter also includes a $187,000 income tax benefit. (b) Includes pretax restructuring and other charges of $100,000 in the 2003 quarter and $225,000 in the 2003 year and net earnings from discontinued operations of $46,000 in the 2003 quarter and $1.1 million in the 2003 year. The 2003 years also includes a $462,000 net gain on the sale of Mitchell Gold. |
|||
| Sales | $73,072,000 | $77,321,000 | (5.5%) |
| Operating income | (270,000) | 5,251,000 | — |
| Net income | (a)(235,000) | (b)2,632,000 | — |
| Earnings per share | (0.02) | 0.20 | — |
| Year ended 11/28 | 2004 | 2003 | Change |
| Sales | $295,203,000 | $278,373,000 | 6.0% |
| Operating income | 3,398,000 | 5,624,000 | (39.6%) |
| Net income | (a)1,032,000 | (b)2,546,000 | (59.5%) |
| Earnings per share | 0.08 | 0.19 | (57.9%) |
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Rowe 4Q shipments, profits sag
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