Shermag 2Q revenues off 39.7%; loss mounts C$3.7M loss in 2nd qtr.
By Furniture Today Staff -- Furniture Today, November 25, 2007
Sherbrooke, Quebec — Stung by a strong Canadian dollar and a weak U.S. housing market, manufacturer and importer Shermag reported a 39.7% decline in revenues and a C$3.7 million loss in its second quarter ended Sept. 28.
Jeff Casselman, then president and CEO before his resignation last week, said the board "has initiated a complete review of operations" to respond to market conditions.
"We are pursuing all efforts to align our fixed costs in the face of the potent combination of the weakened U.S. dollar and lower sales. Notwithstanding the focus on managing our cost structure, additional measures are required," he said.
Shermag reported revenues of C$25.6 million, down from C$42.5 million in the comparable quarter a year ago. The net loss came to 28 Canadian cents per share, more than triple the loss of C$1.1 million, or 9 cents per share, posted a year ago.
The company said that consolidating Canadian manufacturing, boosting global sourcing, and raising quality and prices for custom-made domestic product had "generated important economies." But tough market conditions and the weak U.S. dollar, recently valued at less than the Canadian dollar, have taken a toll.
"The Canadian dollar continues to move against us at an unprecedented rate.... This will further affect our results as additional price increases may further impact our revenues," Casselman said.
In the six months, revenues of $54.9 million were down 35.4% from a year ago. The net loss was C$7.6 million, compared with a loss of C$5.5 million last year.
| Shermag(a) | |||
|---|---|---|---|
| Owns Jaymar, Mobilier HPL, Mobilier Shermag, Nadeau, Scanway Chanderic and Sofas International | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/28 | 2007 | 2006 | Change |
| (a) In Canadian dollars. (b) Includes exchange losses of C$1.2 million in the 2007 quarter, C$2.6 million in the 2007 six months and C$629,000 in the 2006 six months, and an exchange gain of C$291,000 in the 2006 quarter. |
|||
| Revenues | C$25,619,000 | C$42,517,000 | (39.7%) |
| Operating income | 3,043,000 | 6,333,000 | (52.0%) |
| Net income (b) | (3,688,000) | (1,147,000) | |
| Earnings per share | (0.28) | (0.09) | |
| 6 months ended 9/28 | 2007 | 2006 | Change |
| Revenues | C$54,923,000 | C$84,999,000 | (35.4%) |
| Operating income | 6,307,000 | 9,531,000 | (33.8%) |
| Net income (b) | (7,623,000) | (5,526,000) | |
| Earnings per share | (0.57) | (0.41) | |
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Shermag reports C$3.7 million loss in latest quarter
Nov 13, 2007
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