Jennifer loses $6.9M in 1Q
By Clint Engel -- Furniture Today, January 18, 2010
WOODBURY, N.Y. —
Jennifer Convertibles reported a fiscal first-quarter net loss of nearly $6.9 million, with almost half of it the result of a writeoff of money due from a related company that no longer operates its stores.
Jennifer's loss for the period ended Nov. 28 was larger than its loss of nearly $1.9 million in the same quarter a year ago.
The latest loss includes a writeoff of $3.2 million that was due from the related company.
In a December document filed with the Securities and Exchange Commission, Jennifer said a private affiliated company was in default of its obligations to Jennifer and owed the retailer about $4.3 million.
“Obviously we are not pleased with the write-offs of amounts due from the related company, which impacted our results for the fourth and first fiscal quarters and will impact our results to a lesser extent in our second fiscal quarter,” said Harley Greenfield, CEO of Jennifer.
As of Jan. 1, the related company ceased operations and turned over its 20 stores to Jennifer. Greenfield said Jennifer will evaluate each store's potential and will begin negotiating with landlords on the locations it wants to keep.
He said the change is a positive one for Jennifer.
“Maybe most important, we will now be operating as one company free of any appearance of potential conflict,” Greenfield said. The company now operates 159 Jennifer stores and four Ashley Furniture HomeStores.
For the first quarter, revenue from continuing operations decreased by 12.4% from the same period last year, to $23.2 million.
During the period, Jennifer closed one store in Peoria, Ariz.
Greenfield said the company continues to be pleased with the progress of its Ashley Furniture HomeStores, where sales increased by 31.5% to $3.8 million for the quarter, up from $2.9 million in the same period last year. Operating income increased by 51.4% to $168,000 and same-stores sales rose 19.7 %.
Jennifer opened two new HomeStores in New York during the quarter and will open a Brooklyn store this month.
Greenfield said he is positive about the company's future because its “new extreme value merchandise in the Jennifer division gives us a competitive advantage in this economy and seems to be stabilizing sales.” Also, the new stores from the related company will generate additional revenues, he said, and the HomeStores division is growing rapidly.
Meanwhile, Jennifer said it has received a letter from the New York Stock Exchange Amex saying that company no longer is in compliance for listing the stock and has until Feb. 12 to address how it will regain compliance.
Jennifer said it wasn't in compliance because its stockholders' equity is below $2 million and it has reported losses from continuing operations and net losses in two of its three most recent fiscal years.
For its fiscal year 2009, ended Aug. 29, the company posted a loss of $11 million or $1.55 per share, and had reported a net loss of $3.33 million or 47 cents per share in the previous fiscal year.
Jennifer Convertibles
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| (a) Includes revenues from service contracts of $1.1 million in the 2009 quarter and $1.5 million in the 2008 quarter. (b) Includes a $3.2 million provision for loss on amounts due from a related company in the 2009 quarter. Also includes loss from discontinued operations of $18,000 in the 2009 quarter and $54,000 in the 2008 quarter. |
|||
| 13 weeks ended 11/28 | 2009 | 2008 | Change |
| Revenues (a) | $23,179,000 | $26,453,000 | (12.4%) |
| Operating income | (3,466,000) | (1,619,000) | — |
| Net income (b) | (6,870,000) | (1,869,000) | — |
| Earnings per share | (0.97) | (0.26) | — |
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