Rowe 4Q sales up 2%, loss grows
By Furniture Today Staff -- Furniture Today, February 20, 2006
McLean, Va. — Sales at The Rowe Companies grew 2% in its fourth quarter but the company posted a larger loss than it did a year earlier, mainly because of higher expenses.
The parent of upholstery manufacturer Rowe Furniture and Atlanta-based retailer Storehouse reported a net loss of $2.7 million in the fourth quarter ended Nov. 27 on sales of $74.5 million. In the comparable quarter a year earlier, the loss was $401,000.
For the year, the company's sales increased 1.4% to $299.4 million. Rowe had a net loss of $5.3 million, compared with a profit of $890,000 in fiscal 2004. The results included a $4.4 million net gain in 2005 on the sale of real estate investment properties.
The company blamed the weaker performance on reduced manufacturing productivity and higher expenses for raw materials and transportation. Selling and administrative expenses rose by $8.7 million for the year because of added costs in the retail segment as Storehouse had a net gain of eight stores in fiscal 2005. The chain now has 69 stores in the Southeast, Southwest and Mid-Atlantic.
"We have taken steps to improve our manufacturing operation's results, including the reassignment of staff and the hiring of outside experts to assist us in making the necessary changes," said Chairman and President Gerald Birnbach. "We plan to cut costs through an overall reduction in staff and through other initiatives currently under consideration. We also want to thank GE Commercial Finance for their support in completing our debt restructuring.
| 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 11/27 | 2005 | 2004 | Change |
| (a) Includes income tax benefits of $3.1 million in the 2005 three months and $273,000 in the 2004 three months. The 2004 three months also includes $121,000 in net earnings from discontinued real estate operations. (b) Includes a $7.3 million income tax benefit, $69,000 in net earnings from discontinued real estate operations and a $4.4 million net gain on the disposal of real estate investment properties. (c) Includes a $105,000 net loss on discontinued operations and $179,000 in net earnings from discontinued real estate operations. | |||
| Sales | $74,499,000 | $73,071,000 | 2.0% |
| Operating income | (4,948,000) | (520,000) | — |
| Net income (a) | (2,739,000) | (401,000) | — |
| Earnings per share | (0.21) | (0.03) | — |
| Year ended 11/27 | 2005 | 2004 | Change |
| Sales | $299,391,000 | $295,203,000 | 1.4% |
| Operating income | (15,190,000) | 3,183,000 | — |
| Net income | (b)(5,305,000) | (c)890,000 | — |
| Earnings per share | (0.40) | 0.07 | — |
