Tax refund boosts profits for Chromcraft in 4Q
By Jay McIntosh -- Furniture Today, April 5, 2010
WEST LAFAYETTE, Ind. —
Manufacturer and importer Chromcraft Revington reported a sharply improved profit picture in the fourth quarter, despite a 32.7% decline in sales from the same period a year earlier.
Thanks to a change in federal tax law, the company reported positive net income of $4.7 million in the period despite a $1.9 million operating loss. The law change, enacted in November as part of the federal stimulus package, gave the company a $6.6 million refund on taxes it paid in 2003 and 2004.
In last year's fourth quarter, the company had posted an $8 million loss. The latest quarter's operating loss of $1.8 million was far lower than the $7.9 million operating loss in the 2008 fourth quarter, an improvement that Ronald Butler, chairman and CEO, attributed to the restructuring and cost containment actions implemented starting in 2008.
Fourth-quarter sales were $15.4 million, down from $22.9 million a year earlier.
For the full year, sales were down 36.7% to $62.7 million. The company posted a loss of $1.9 million, compared with a $26.5 million loss in 2008.
The company said that at the end of 2009, it had $3.6 million in cash and no bank borrowings.
Sales in the past year have been affected by the discontinuation of some low-margin products, continued competition from imports, and weak consumer demand, the company said.
Chromcraft Revington's brands include Chromcraft, Peters-Revington, Cochrane and Southern Living, and also the new CR Kids & Beyond youth furniture brand, which was introduced at the Las Vegas Market in February.
Chromcraft Revington
Owns Chromcraft, Peters-Revington and Cochrane
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 12/31 | 2009 | 2008 | Change |
| (a) Includes income tax benefit of $6.6 million in the 2009 quarter and year and income tax expense of $6,000 in the 2008 quarter and $208,000 in the 2008 year. |
|||
| Sales | $15,406,000 | $22,875,000 | (32.7%) |
| Operating income | (1,830,000) | (7,907,000) | — |
| Net income (a) | 4,672,000 | (8,011,000) | — |
| Earnings per share | 1.00 | (1.75) | — |
| Year ended 12/31 | 2009 | 2008 | Change |
| Sales | $62,687,000 | $99,014,000 | (36.7%) |
| Operating income | (8,192,000) | (25,852,000) | — |
| Net income (a) | (1,923,000) | (26,461,000) | — |
| Earnings per share | (0.42) | (5.79) | — |
Butler said the initial reaction to the CR Kids line was positive and that he hopes for a similar response at this month's High Point Market.
He added that while the economic environment remains challenging, “We continue to believe that when the furniture market improves, the company is well positioned to return to profitability.”
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