Chromcraft Revington, Inc. (NYSE Amex: CRC) today reported its
results for the second quarter of 2011. Sales for the second
quarter of 2011 of $13,822,000 were 11% higher than the first
quarter of 2011 and its net loss was 30% lower than the prior
quarter. Gross margin expressed in dollars for the second quarter
of 2011 increased by 53%, or 5% as a percent of net sales, from
$1,660,000 to $2,533,000 as compared to the first quarter of
2011.
Operating results in the second quarter of 2011 improved by
$542,000 as our operating loss decreased to $1,186,000 for the
current quarter as compared to $1,728,000 for the first quarter of
2011, primarily due to increased sales and a favorable product
sales mix.
Our improved second quarter operating results compared to the
first quarter of 2011 and the second quarter of 2010 were primarily
due to an increase in commercial furniture shipments, reflecting
what we believe are improved conditions in the U.S. office
furniture market. Commercial furniture sales were slightly higher
for the second quarter of 2011 as compared to the prior year
period. Residential furniture shipments in the second quarter of
2011 were slightly lower as compared to the prior year period
primarily due to weak consumer demand for residential furniture in
our product categories and price segment, which we believe is
consistent with industry trends; the continuing economic downturn
which reflects the ongoing labor and housing market struggles and
high consumer debt levels; and import competition.
Gross margin expressed in dollars for the quarter ended July 2,
2011 was slightly lower than the same period last year which was
offset by a decrease in selling, general and administrative
expenses of $0.2 million primarily due to lower marketing related
expenses. Selling, general and administrative expenses were $0.4
million lower in the first six months of 2011 as compared to the
prior year period primarily due to lower marketing related
expenses.
Cash used in operating activities was $2.3 million for the first
six months of 2011 as compared to $3.0 million provided in the
prior year period. The $3.0 million of cash provided in the 2010
period included the receipt of a tax refund of $6.6 million.
Excluding this tax refund, we used $1.3 million less cash in the
first half of 2011 as compared to the prior year period. The
Company had cash of $1.9 million at July 2, 2011, no bank
borrowings during the first six months of 2011, and no outstanding
loan balance at July 2, 2011.
Commenting on these results, Ronald H. Butler, Chairman and
Chief Executive Officer, said, “Despite our operating loss for the
second quarter, we are encouraged by a marked improvement over the
first quarter 2011 operating results in both sales and operating
loss, primarily due to a pickup in our recent order activity and
shipments of contract commercial products. Although the ongoing
difficult operating environment in the residential furniture market
will continue to be challenging, we expect the positive impact on
our business resulting from what may be the start of a rebound in
the U.S. office furniture market to continue through the remainder
of the year. In these uncertain economic times, we have diligently
focused on our cash flow and balance sheet management along with
controlling operating costs to be in line with our revenue
base.”
Chromcraft Revington® businesses design residential and
commercial furniture marketed throughout North America. The Company
wholesales its residential furniture products under Chromcraft®,
Cochrane®, Peters-Revington®, Southern Living®, and CR Kids &
Beyond® primary brands. It sells commercial furniture under the
Chromcraft® brand. The Company sources furniture from overseas
suppliers, with domestic contract specialty facilities, and
operates one U.S. manufacturing facility for its commercial
furniture and motion based casual dining furniture in
Mississippi.
This release contains forward-looking statements that are based
on current expectations and assumptions. These forward-looking
statements can be generally identified as such because they include
future tense or dates, or are not historical or current facts, or
include words such as “believe,” “may,” “expect,” “anticipate,”
“intend,” “plan,” or words of similar import. Forward-looking
statements are not guarantees of performance or outcomes and are
subject to certain risks and uncertainties that could cause actual
results or outcomes to differ materially from those reported,
expected, or anticipated as of the date of this release.
Among such risks and uncertainties that could cause actual
results or outcomes to differ materially from those reported,
expected or anticipated are general economic conditions, including
the impact of the current recession in the United States and
elsewhere; import and domestic competition in the furniture
industry; ability of the Company to execute its business
strategies, implement its new business model and successfully
complete its business transition; our ability to grow sales and
reduce expenses to eliminate our operating losses; the continuation
of the recent improvement in the U.S. office furniture market; our
ability to sell the right product mix; supply disruptions with
products manufactured in China and other Asian countries; continued
credit availability under the Company’s bank credit facility;
market interest rates; consumer confidence levels; cyclical nature
of the furniture industry; consumer and business spending; changes
in relationships with customers; customer acceptance of existing
and new products; new and existing home sales; financial viability
of the Company’s customers and their ability to continue or
increase product orders; loss of key management; and other factors
that generally affect business; and certain risks as set forth in
the Company’s annual report on Form 10-K for the year ended
December 31, 2010.
The Company does not undertake any obligation to update or
revise publicly any forward-looking statements to reflect
information, events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or
unanticipated events or circumstances.
Condensed Consolidated
Statements of Operations (unaudited) Chromcraft Revington, Inc. (In
thousands, except per share data)
Three Months
Ended Six Months Ended July 2, July 3, July 2,
July 3,
2011 2010 2011
2010 Sales $ 13,822 $ 14,008 $ 26,302 $ 27,915
Cost of sales 11,289 11,339
22,109 22,540 Gross margin 2,533
2,669 4,193 5,375 Selling, general and administrative
expenses 3,719 3,937 7,107
7,548 Operating loss (1,186 ) (1,268 )
(2,914 ) (2,173 ) Interest expense (68 ) (75 )
(144 ) (150 ) Net loss $ (1,254 ) $ (1,343 ) $
(3,058 ) $ (2,323 ) Basic and diluted loss per share of
common stock $ (.26 ) $ (.29 ) $ (.64 ) $ (.50 ) Shares used
in computing loss per share 4,765 4,685 4,751 4,676
Condensed Consolidated Balance Sheets
(unaudited) Chromcraft Revington, Inc. (In thousands) July
2, December 31, 2011 2010
Assets Cash $ 1,850
$ 4,179 Accounts receivable, less allowance of $225 in 2011 and
$300 in 2010 7,250 7,552 Inventories 13,795 14,191 Prepaid expenses
and other 820 711 Current assets 23,715 26,633
Property, plant and equipment, net 6,836 7,235 Other assets
640 579 Total assets $ 31,191 $ 34,447
Liabilities and Stockholders' Equity Accounts payable
$ 3,926 $ 4,144 Accrued liabilities 3,207 3,346
Current liabilities 7,133 7,490 Deferred compensation 396
461 Other long-term liabilities 1,683 1,667 Total
liabilities 9,212 9,618 Stockholders' equity 21,979
24,829 Total liabilities and stockholders' equity $
31,191 $ 34,447 Condensed
Consolidated Statements of Cash Flows (unaudited) Chromcraft
Revington, Inc. (In thousands)
Six
Months Ended July 2, July 3, 2011 2010
Operating
Activities Net loss $ (3,058 ) $ (2,323 )
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization expense 424 472 Non-cash share based
and ESOP compensation expense 208 172 Provision for doubtful
accounts 22 43 Non-cash inventory write-downs 134 221 Non-cash
accretion expense 17 16 Gain on disposal of assets (2 ) - Changes
in operating assets and liabilities: Accounts receivable 280 118
Refundable income taxes - 6,578 Inventories 262 (190 ) Prepaid
expenses and other (109 ) (228 ) Accounts payable and accrued
liabilities (357 ) (1,913 ) Long-term liabilities and assets
(127 ) 22
Cash provided by (used in)
operating activities (2,306 ) 2,988
Investing Activities Capital expenditures (25 ) (135 )
Proceeds on disposal of assets 2 -
Cash used in investing activities (23 )
(135 )
Change in cash (2,329 ) 2,853
Cash
at beginning of the period 4,179 3,636
Cash at end of the period $ 1,850 $
6,489
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