Chromcraft reports 27.2% drop in sales
By Furniture Today Staff -- Furniture Today, April 6, 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 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.
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 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 '07 because of higher shipments of office seating.
Earnings also were affected by a tax valuation allowance of $5.2 million, or a $1.14 loss per share, in the fourth quarter.
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. "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 (and) establishing an Asian-based sourcing and quality control operation."
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