American's sales rise 1.7% in quarter
May 15, 2013,
ECRU, Miss. - Upholstery producer American Furniture Mfg. reported a first-quarter sales increase of 1.7% as the company reversed a net loss from last year's first quarter.
The financial report, included in a Securities and Exchange Commission filing by parent company Compass Diversified Holdings, also showed that American recorded an operating profit of $573,000, nearly double the operating profit of $273,000 in the same quarter last year.
Net income of $94,000 reversed a net loss of $177,000 in the first quarter of 2012.
Net sales for the quarter were $30.82 million, up from $30.29 million in the comparable quarter. Compass said the sales increase was due largely to the introduction of a power motion upholstery line. Stationary upholstery sales were flat.
Compass hired a new president and senior management team at American last fall, and American executives said a revamped product line received overwhelmingly positive reviews at last month's High Point Market.
The company will begin shipping the new products in late summer and early fall.
Elias Sabo, a Compass partner, said in a call with securities analysts that American met expectations in the quarter.
"The improvement in operations reflects the proactive measures we have taken at AFM including reducing the company's cost structure and working capital requirements in light of the challenging retail environment in the furniture industry. We are confident this business is well positioned to benefit from an eventual recovery of the overall economy and housing market, and we expect AFM to generate at a minimum breakeven cash flow in 2013," Sabo told analysts, as reported on the website Seeking Alpha.