Amisco 3Q sales drop 12.7%; earnings take comparable dip
By Furniture Today Staff -- Furniture Today, October 9, 2005
L'Islet, Quebec — L'Islet, Quebec— Challenged by Chinese competition, climbing steel costs and a strengthening Canadian dollar, metal furniture maker Amisco Inds. said sales in its third quarter ended Aug. 27 fell 12.7% to C$11.3 million, with net earnings also declining 12.7% to C$646,000.
"This decline is due in part to the reduction in orders from a few large customers, some of whom chose to deal with Chinese suppliers, and in part to the fierce competition facing the smallest furniture dealers who account for nearly half of Amisco's customer base," said President and CEO Réjean Poitras.
He said escalating steel prices and the rise in the value of the Canadian dollar versus its U.S. counterpart were other factors affecting performance.
In the nine months, sales fell 11.4% to C$32.2 million, while net earnings dropped 12.7% to C$1.5 million. Most of the ground was lost in the U.S. market.
"Sales in Canada (in the nine months) fluctuated very little, slipping from C$11.1 million to C$10.7 million, whereas sales in the United States declined by 14.8% from C$25.3 million to C$21.5 million," Poitras said. "This particularly sharp drop in the United States is due to both the reduction in orders from a few large customers and fierce competition facing the smallest furniture retailers."
U.S. retailers accounted for 68% of Amisco's shipments in the nine months.
Poitras noted that margins remained stable despite the sales decline, thanks mainly to moves to reduce operating costs and improvements in plant productivity.
He also cited moves taken to strengthen the company, particularly the April 2005 introduction of its more traditional Transitions line, which has proved successful "and thus made a slight contribution to the company's third-quarter sales."
| Amisco(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 8/27 | 2005 | 2004 | Change |
| (a) In Canadian dollars. |
|||
| Sales | C$11,305,000 | C$12,954,000 | (12.7%) |
| Operating income | 783,000 | 1,210,000 | (35.3%) |
| Net income | 646,000 | 740,000 | (12.7%) |
| Earnings per share | 0.16 | 0.17 | (5.9%) |
| 9 months ended 8/27 | 2005 | 2004 | Change |
| Sales | C$32,197,000 | C$36,349,000 | (11.4%) |
| Operating income | 1,754,000 | 2,379,000 | (26.3%) |
| Net income | 1,465,000 | 1,678,000 | (12.7%) |
| Earnings per share | 0.36 | 0.42 | (14.3%) |
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