Chromcraft Revington loses $10.2 million in third quarter

Sales decline nearly 20%

Jay McIntosh -- Furniture Today, 11/11/2008 7:36:44 AM

WEST LAFAYETTE, Ind. — Furniture manufacturer and importer Chromcraft Revington said its loss ballooned to $10.2 million in the third quarter, largely because of $6.6 million in asset impairment and restructuring expenses, as sales declined 18.8%.

The loss, amounting to $2.23 per share, was nearly five times the loss of $2.1 million or 46 cents per share posted in the same quarter last year.

Sales of $23.1 million were down from $28.4 million a year ago.

For the first nine months of the year, sales of $76.1 million were down 19.9% from the same period in 2007. The loss was $18.5 million or $4.04 per share, compared with a loss of $6.6 million or $1.46 per share a year earlier.

Residential furniture shipments declined in all categories in the third quarter, the company said, while commercial furniture sales rose because of higher shipments of seating products. On the residential side, officials blamed the weak economy, competition from imports, restructuring activities and unsuccessful product introductions.

Asset impairment and restructuring charges stemmed largely from the decisions this year to close plants in Lincolnton, N.C., and Delphi, Ind. They also include severance costs related to Chromcraft's replacing its CEO and a number of senior managers in the third quarter, while eliminating some salaried positions.

Ronald Butler, chairman and CEO, said the restructuring moves are necessary to enable the company to compete more effectively. He said the company also is responding to the current weak business climate with spending controls and expense reductions, and is focusing on improvements in supply chain, product development and sales activities.

He also said the company has several sources of cash and liquidity to help it complete its transition, including $14.2 million available under a bank credit line. The company also expects to receive sale proceeds of $3.3 million from the Lincolnton plant and equipment, and $3 million from the sale of excess inventories in 2009.

Chromcraft also expects to get an income tax refund of $3.5 million in the fourth quarter of this year, mainly from operating loss carrybacks.