Earnings down for many in '05
By Furniture Today Staff -- Furniture Today, June 5, 2006
High Point — Big furniture manufacturers and importers found it tougher to make a buck last year.
Of the 13 companies on the Top 25 that report earnings publicly, just four posted higher net profits in 2005 than in 2004. Two companies, Rowe and Na-tuzzi, had net losses in the most recent year.
Five companies did what has become a common practice in the furniture industry, taking charges for restructuring and asset impairment. Such charges reflect the ongoing sea change as U.S. manufacturing facilities are closed and offshore sourcing continues to grow.
Posting the highest earnings last year, as usual, was components and furniture giant Leggett & Platt. Leggett's $251.3 million net profit was down 11.9% from the previous year, however, as the company took a charge against earnings reflecting its restructuring to reduce capacity and improve performance.
Another company with a diverse product line, Montreal's Dorel Inds., also saw its net earnings decline, by 8.7% to US$91.3 million. Restructuring costs hurt Dorel's bottom line as well, with a charge in connection with the shutdown of its Ameriwood ready-to-assemble furniture plant in Wright City, Mo., and the shift of production to other Ameriwood factories.
A newcomer to the earnings list after an initial public offering of stock last year is Samson Holding, the Chinese parent of Lacquer Craft, which owns the Universal, Legacy Classic and Craftmaster brands in the United States. In its first annual report, Samson reported a stellar year with net earnings of $89 million, up 27.1% from 2004.
The biggest turnaround story last year was at La-Z-Boy, which recovered from a $25.6 million loss in the 12 months ended in January 2005 to record a $28 million profit in the latest 12-month period. The company had heavier restructuring charges a year ago, as well as an $8.3 million charge related to an accounting change.
Other companies posting improvements last year were Ethan Allen, with a 2.9% net gain, and Stanley Furniture, up 11.7%.
| Top 25 earnings for 2005 | ||||
|---|---|---|---|---|
| Dollar amounts in millions for companies that publicly report earnings. Figures in parentheses are losses or declines. | ||||
| Company | Operating income | Change from 2004 | Net income | Change from 2004 |
| (a) Includes a charge of approximately $40 million in 2005 from expenses related to restructuring activity and unusually high workers' compensation costs, with a partially offsetting one-time income tax benefit. (b) For the 12 months ended Dec. 31. Includes pretax restructuring and impairment charges of $4.2 million in 2005 and $12.6 million in 2004. (c) For the 12 months ended Jan. 28, 2006. Includes net income from discontinued operations of $1 million, an extraordinary gain of $1.4 million and pretax restructuring charges of $5.3 million in 2006. Includes pretax restructuring charges of $14.3 million, $25,000 in net income from discontinued operations, and an $8.3 million extraordinary charge, the cumulative effect of an accounting change, in 2005. (d) Includes pretax restructuring and related asset impairment charges of $5.3 million in 2005 and $1.6 million in 2004. Also includes a $369,000 pretax credit on the sale of property in 2004. (e) Fiscal year ended Nov. 26. Includes pretax restructuring and asset impairment charges of $6.16 million in 2005 and $4.06 million in 2004. Includes nonoperating pretax income of $8.06 million in 2005 and $7.1 million in 2004. (f) Includes a $710,000 one-time income tax benefit in 2005 from the favorable resolution of a tax contingency. (g) Trailing 12 months ended Dec. 31. Includes a pretax gain on the sale of facilities of $200,409, a $60,000 income tax benefit, and a $400,000 charge for stock-based compensation in 2005. Includes a $608,613 pretax gain on the sale of a facility in 2004. (h) Fiscal year ended Nov. 27. 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 in 2005, and a $105,000 net loss on discontinued operations and $179,000 in net earnings from discontinued real estate operations. (i) Converted from European euros. |
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| Leggett & Platt (a) | $444.0 | (2.5%) | $251.3 | (11.9%) |
| Dorel | 193.5 | 6.4% | 91.3 | (8.7%) |
| Samson Holding (Lacquer Craft) | 95.5 | 29.4% | 89.0 | 27.1% |
| Ethan Allen (b) | 138.2 | (1.0%) | 80.7 | 2.9% |
| Furniture Brands International | 99.3 | (36.2%) | 61.4 | (32.9%) |
| La-Z-Boy (c) | 57.1 | (30.3%) | 28.0 | — |
| Stanley | 37.4 | 7.9% | 23.2 | 11.7% |
| Hooker (d) | 25.4 | (22.6%) | 11.8 | (35.0%) |
| Bassett (e) | 7.5 | 93.7% | 7.6 | (7.9%) |
| Chromcraft Revington (f) | 11.1 | (15.4%) | 7.2 | (5.5%) |
| Flexsteel (g) | 6.7 | (48.6%) | 7.5 | (41.9%) |
| Rowe (h) | (15.2) | — | (5.3) | — |
| Natuzzi (i) | (18.7) | — | (20.8) | — |
