Rowe 1Q revenues off 6.7%
By Gary Evans -- Furniture Today, April 18, 2005
McLean, Va. — The Rowe Companies said last week that ongoing trouble with new manufacturing technology contributed to a first-quarter loss of $149,000, or 1 cent per share, compared with net income of $72,000 in the same quarter a year ago.
The company, which owns upholstery maker Rowe Furniture and retail chain Storehouse, reported revenues in the quarter ended Feb. 28 dropped 6.7% to $65.7 million from the previous year's $70.4 million.
Rowe said its loss from continuing operations in the quarter was $2.9 million, or 22 cents per share, compared to earnings of $180,000, or 1 cent per share, a year ago.
The company said it still was working out kinks in its Enterprise Resource Planning manufacturing system, although problems were quickly diminishing. Officials indicated they expected to return to normal operations by the second half.
Gross margin was $20.5 million in the quarter, 17.4% below the prior year's $24.8 million, due partly to lower production and shipping rates at its factories in Missouri and Virginia.
Chairman and President Gerald Birnbach said in a conference call that incoming orders were up 5%, "even considering our problems," and that backlogs were double what they were last year. "Our plans are to reduce these backlogs in an orderly way over the next two quarters," he said.
Despite production problems, the company hasn't lost "a lot of customers," Birnbach said, but has lost space on retail floors, which it expects to regain. The company said it was currently manufacturing a weekly average of 8,000 pieces and expects to be above 10,000 when it returns to normal.
Rowe said it sold an investment property during the quarter that was previously included in discontinued operations, for an after-tax gain of $2.7 million, or 20 cents per share.
| 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 2/27 | 2005 | (a)2004 | Change |
| (a) Restated. (b) Includes a $1.7 million income tax benefit, a $71,000 net gain from discontinued real estate operations and a $2.7 million net gain on the disposal of the Sylmar investment property. (c) Includes a $105,000 net loss from previously discontinued operations and a $3,000 net loss from discontinued real estate operations. (d) Based on average shares outstanding of 13.3 million in the 2005 quarter and 13.5 million in the 2004 quarter. | |||
| Sales | $65,705,000 | $70,422,000 | (6.7%) |
| Operating income | (4,857,000) | 920,000 | — |
| Net income | (b)(149,000) | (c)72,000 | — |
| Earnings per share (d) | (0.01) | 0.01 | — |
