Lacquer Craft parent reports higher sales, profits
U.S. sales account for 90% of business
Thomas Russell -- Furniture Today, May 9, 2006
DONGGUAN, China — Samson Holding, owner of Chinese case goods manufacturer Lacquer Craft, says its sales increased 13% last year and profits rose 27%.
According to its recently filed annual report, sales grew to $517 million in 2005 from $457.5 million in 2004. Profits rose to $89 million or 38 cents per share from $70.1 million or 30 cents per share in 2004.
The annual report is the first one Samson Holding has filed since it became publicly traded on the Hong Kong Stock Exchange Nov. 17.
About 90% of its sales are from furniture sold in the U.S. market, the company said. Branded business, done through U.S. marketing arms Universal Furniture and Legacy Classic, represented 88.2% of total sales or $455.8 million, while OEM business accounted for 11.8% or $61.2 million.
In 2004, branded business totaled $405.6 million or 88.7% of sales and OEM came to $51.9 million or 11.3%.
Samuel Kuo, executive director and board chairman, said in a statement to shareholders that profits slightly exceeded the $88 million forecast in the Nov. 7 prospectus.
Kuo added that despite competition and consolidation in the furniture industry, the company is poised to continue its growth because of its Chinese manufacturing and warehouse facilities.
“Our principal goal is to maintain and strengthen our position as one of the leading wholesalers in the U.S. residential furniture market and to become one of the leading players in the furniture industry globally by increasing our market share in both our branded and original equipment manufacturer business,” he said.
He said the branded business would grow through innovative product design and the expansion of lines such as upholstery, home office, youth and home entertainment furniture. Kuo also predicted the company would be able to gain OEM business from high-end furniture companies by using its expanding manufacturing facilities.
The company’s plants in Jiashan and Dongguan, China, are adding production lines. When construction is completed in late 2007, they will produce an additional 1,000 and 1,200 containers a month or residential furniture. Just before the Nov. 17 prospectus, the two had a combined production capacity of 2,200 containers a month.
Kuo said other growth could occur through acquisitions. After the report was issued, Lacquer Craft announced it had acquired a U.S. upholstery manufacturer, Craftmaster.
He also said the company plans to boost procurement efficiencies and improve its supply chain management, which could lead to future cost savings and better delivery times. Moreover, he said the company strives to shorten product development cycles and streamline production processes through increased collaboration of engineering and design teams and by continuing to hire skilled workers.
“We believe that the ability to grow as a successful business depends on the quality of our management and employees,” Kuo said. “We are committed to recruiting, training and retaining skilled and experienced people throughout our operations globally to better serve our customers.”
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