Jennifer posts 3rd straight profit
By Clint Engel -- Furniture Today, January 15, 2006
Woodbury, N.Y. — Jennifer Convertibles earned a profit for the third consecutive quarter and posted a double-digit same-store sales increase, citing the payoff of merchandising, supply chain and other strategies the Top 100 chain has implemented.
In its first quarter ended Nov. 26, the 193-store retailer based here reported net income of $848,000, a turnaround from a net loss of $2.5 million in the same period a year ago. The most recent quarter included a $195,000 gain from the early termination of a lease for a store closed in June.
Sales increased 17.8% to $35.8 million from $30.4 million in the comparable quarter a year ago, while same-store sales increased 17.2%. Operating margins from continuing operations strengthened to 32.3% from 28.6%.
In the latest quarter, Jennifer closed one store in Indiana. In the previous fiscal year, it closed 20 stores, 18 of which were reported as discontinued operations. Income from discontinued operations in the most recent quarter was $165,000 vs. a loss of $398,000 from discontinued operations a year earlier.
"We continue to see the benefit of the strategies we have implemented to provide customers incredible values while maintaining acceptable margins," said Jennifer CEO Harley Greenfield. Jennifer's significant shift to Asian sourcing and a move away from long-term deferred payment plans are among the marketing and merchandising strategies the retailer has employed.
Greenfield said such strategies, combined with lower overhead and an improved supply chain, "should continue to produce increased sales and improved margins in the future."
Separately, Jennifer said it received a letter from the American Stock Exchange Jan. 5 informing the company that it is not in compliance with shareholders equity requirements for companies traded on the exchange.
According to the letter, Jennifer has until Feb. 6 to submit a plan showing how it will become compliant within 18 months.
Jennifer would need $4 million in equity to remain in compliance. As of Nov. 26, the equity figure was $81,000, the company said.
"We have been profitable in each of the last three quarters, having generated an aggregate of $4.8 million over that period and anticipate continued profitability," the company said. "Accordingly, we believe that we will be able to submit a plan, which will satisfy the Exchange."
It warned, however, that the stock exchange is not obligated to accept the plan and "there is no assurance that our stock will not be delisted."
| Jennifer Convertibles | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 11/26 | 2005 | 2004 | Change |
| (a) Includes a $195,000 gain in the 2005 quarter from the early termination of a lease. (b) Based on average diluted shares outstanding of 7.7 million in the 2005 quarter and 5.7 million in the 2004 quarter. |
|||
| Revenues | $35,840,000 | $30,433,000 | 17.8% |
| Operating income | 849,000 | (1,763,000) | — |
| Net income (a) | 848,000 | (2,465,000) | — |
| Earnings per share (b) | 0.11 | (0.43) | — |
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