Chromcraft reports $2.1 million loss
Sales decline 20% in third quarter
By Furniture Today Staff -- Furniture Today, November 13, 2007
WEST LAFAYETTE, Ind. — Manufacturer and importer Chromcraft Revington reported a third quarter net loss of $2.1 million as sales declined 20% from a year earlier to $28.4 million.
The net loss was primarily due to lower sales volume, an unfavorable product mix, price discounting and a non-cash charge for inventory writedowns, the company said.
Last year, the company reported $35.3 million in sales during the same quarter and a loss of $4.5 million. For the nine months ended in September, this year’s sales of $95 million were down 22% from last year’s pace. The year-to-date loss was $6.6 million, compared with a $2.7 million loss in the comparable 2006 period.
Company officials said a weak retail environment, competitive pressure from imports and the impact of its corporate restructuring caused sales to decline. Commercial furniture sales were higher for the quarter and the year due to an increase in seating product shipments.
“Our financial results, in addition to those factors described above, continue to reflect the impact and incremental costs of the changes taking place in the company, as well as a poor retail market. While the retail market continues to be very difficult it is important for the company to work through its transition in order to position it for the future,” said Chairman and CEO Ben Anderson-Ray.
Chromcraft recorded an inventory writedown charge of $700,000 during the quarter.
Despite the loss, the company said it had cash of $7.7 million at the end of the quarter and continued to have no bank indebtedness, company officials said.
Meanwhile, the company said that because of its loss this year, it expects to be able to apply for a refund on its 2006 and 2005 income taxes. It paid refundable taxes of $4.3 million in those years, said Frank Kane, senior vice president and chief financial officer. It expects to record most of the refunds in 2008.
The company said it is continuing to reduce its reliance on U.S. manufacturing by shifting its business toward use of the global supply chain, progressively outsourcing existing furniture lines and developing new products based on an outsourced model.
Chromcraft Revington sells residential furniture under the CR Home banner under the Chromcraft, Peters-Revington, Silver Furniture, Cochrane Furniture and Sumter brands.
