Chromcraft Revington sales drop 27.2% in fourth quarter
Cites competition from imports, shifts in strategy
By Furniture Today Staff -- Furniture Today, March 31, 2008
WEST LAFAYETTE, Ind. — Chromcraft Revington posted a sales decline of 27.2% in the fourth quarter of 2007 and an operating loss of $8.3 million, citing competition from imports, shifts in the company’s product and selling strategy, and weak retail sales.
For the year, the manufacturer and importer said its sales of $123.4 million were down 23.1% from 2006. The net loss was $14.9 million or $3.30 per share.
The previous year, the company had reported losses of $0.7 million in the fourth quarter and $3.4 million or 77 cents per share for the full 12 months.
Chromcraft Revington also announced that by May 30, it will end its remaining manufacturing operations at its Delphi, Ind., plant, converting it to a warehouse and distribution center. Some 150 workers will be laid off, and production will shift to offshore sourcing.
After the restructuring, the company will have about 550 employees working in manufacturing and distribution at its facilities in Senatobia, Miss., and Lincolnton, N.C., and at corporate headquarters in West Lafayette, Ind.
Officials said restructuring activities last year affected sales. The company discontinued certain underperforming or slow-moving domestic products before the new outsource replacements were available, and customer relationships were disrupted in a realignment of Chromcraft Revington’s sales force.
Commercial furniture sales grew during the year because of higher shipment of office seating products, the company said.
Earnings also were affected by a tax valuation allowance of $5.2 million, or a $1.14 loss per share, in the fourth quarter, reflecting the likelihood that it won’t be able to use some tax-loss carryforwards that were on its balance sheet.
Non-cash inventory writedowns and asset impairment charges also reduced 2007 earnings, as did higher bad debt expense because of the weak retail environment and bankruptcy of a significant customer, the company said.
Ben Anderson-Ray, chairman and CEO, said the results reflect the costs of the company’s ongoing transformation.
“In 2007, we made significant organizational progress in the overall transition toward a unified organization and the greater use of global sourcing, shifting our U.S.-based operations towards built-to order customization and distribution logistics,” he said. “Some of the major changes to date include integration of five sales organizations into one, consolidation of showrooms, integration of marketing and product development activities, restructuring the organization from divisional units into a unified functional structure, establishing an Asian-based sourcing and quality control operation, as well as initiating the consolidation of information systems.
“Most importantly, we have launched the largest number of new products in the company’s history, all based on consumer research and the company’s new operating model,” he added. “While many of these products are just beginning to reach retail floors, we believe that the product pipeline will progressively shift our mix consistent with the new model.”
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Chromcraft reports 27.2% drop in sales
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