Chromcraft Revington, Inc. (NYSE Amex: CRC) today reported its
results for the fourth quarter and year ended December 31, 2011.
Sales for the fourth quarter of 2011 were $15.7 million or 19.0%
higher than the prior quarter and 8.2% higher than the same period
last year. The net loss for the fourth quarter of 2011 was
$255,000, which was 75.5% lower than the prior quarter, marking the
fourth consecutive quarter of reduced losses, and 90.5% lower than
the loss in the same period in 2010.
Our improved operating results in the fourth quarter as compared
to the third quarter of 2011 were primarily due to increased sales,
a favorable product sales mix and lower selling, general and
administrative expenses. Residential furniture shipments in the
fourth quarter of 2011 were higher than the third quarter of 2011
primarily due to shipments of a new home entertainment product line
which began shipping in the fourth quarter and increased sales of
occasional and dining room furniture. Commercial sales increased in
the fourth quarter of 2011 as compared to the prior quarter
primarily due to increased sales of seating and table products.
Despite the increases in residential sales in the fourth quarter,
entering 2012 we continue to face the challenges resulting from
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.
Our sales increase of 8.2% for the three months ended December
31, 2011 as compared to the same period in 2010 was primarily due
to higher shipments of commercial seating and sales of the new home
entertainment product line.
Sales for the year ended December 31, 2011 were $55.3 million, a
1.8% decrease from the prior year. Shipments of residential
furniture in 2011 were lower than 2010 primarily due to lower sales
of occasional furniture, and to a lesser extent dining room
furniture, partially offset by higher sales of bedroom furniture
due to the introduction of a new bedroom line that began shipping
in the second quarter of 2011. Commercial furniture shipments were
higher in 2011 as compared to the prior year due to an increase in
shipments of seating products to government agencies, higher
education institutions and the health care industry.
The net loss for 2011 was $4.4 million, or 37.3% lower than
2010. The reduced loss for both the fourth quarter of 2011 and the
year ended December 31, 2011 compared to the same periods in 2010
was primarily due to a reduction in selling, general and
administrative expenses and a favorable product sales mix. The
reduction in selling, general and administrative expenses in 2011
resulted primarily from lower marketing-related expenses in 2011;
charges in 2010 for a fourth quarter asset impairment related to an
information technology system which we determined was not
recoverable and payments made to former sales executives for
unearned commissions which were payable under their employment
agreements; and a reversal in the fourth quarter of 2011 of an
accrual for estimated environmental costs related to land that we
sold in December 2011.
Excluding receipt of a tax refund of $6.6 million in 2010, we
used $1.0 million less cash in operating activities in 2011 as
compared to 2010, primarily due to a reduced cash loss in 2011. The
Company had $0.9 million of net borrowings on its credit facility
during 2011, and an outstanding loan balance of $0.9 million at
December 31, 2011.
Commenting on these results, Ronald H. Butler, Chairman and
Chief Executive Officer, said, “Despite the continuing difficult
retail operating environment, we are encouraged by our fourth
consecutive quarterly reduction in net loss, which represented a
91% improvement over the prior year quarter and the increased sales
levels in the fourth quarter compared to both the prior quarter and
the same period last year. These improvements reflect increased
order activity and shipments of contract commercial products, cost
containment initiatives and reduced selling, general and
administrative expenses. The ongoing difficult operating
environment in the residential furniture market will continue to be
challenging in 2012.
“We are pleased with our recent acquisition of California-based
Executive Office Concepts, Inc. (‘EOC’), which will become part of
our commercial contract division and its products will be sold
under the EOC brand name. We believe its commercial product lines,
especially an extensive health care line, complement our current
product line of seating, tables, and waiting area furniture. We
plan to operate EOC and offer its branded products to our contract
customers, especially those seeking office suites and those in the
health care segment. In addition, our commercial product division
was awarded a three year vendor contract late in 2011 which took
effect on January 1, 2012 with the Premier health care alliance
which serves more than 2,500 U.S. hospitals and 80,000-plus other
health care sites. The health care sector continues to grow
significantly and we believe this alliance relationship continues
to position the commercial line of our Chromcraft division where it
needs to be for the future. 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.”
Mr. Butler continued, “In line with this strategy, we refinanced
our credit facility on April 20, 2012 and entered into a new two
year secured revolving credit facility with Gibraltar Business
Capital LLC of up to $5 million based upon eligible accounts
receivable of the Company. We believe this new credit facility
provides us with the flexibility and borrowing capacity we need to
meet our anticipated cash operating needs.”
Chromcraft Revington® businesses design, manufacture and import
residential and commercial furniture marketed primarily in the U.S.
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® and Executive Office Concepts brands. 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 and a manufacturing facility for
office suites and other commercial furniture lines in
California.
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,” “intend,” “plan,”
“anticipate,” 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; our ability to execute our business strategies; 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 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
home and existing home sales; financial viability of our customers
and their ability to continue or increase product orders; loss of
key management; other factors that generally affect business; and
certain risks set forth in the Company’s annual report on Form 10-K
for the year ended December 31, 2011.
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 Twelve Months Ended December 31,
December 31, December 31, December 31,
2011
2010 2011 2010 Sales
$ 15,738 $ 14,546 $ 55,266 $ 56,269 Cost of sales
12,851 12,858
45,669 47,114
Gross margin 2,887 1,688 9,597 9,155 Selling, general and
administrative expenses
3,022
4,302 13,620
15,801 Operating loss (135 ) (2,614 )
(4,023 ) (6,646 ) Interest expense, net
(120 ) (74
) (332 )
(298 ) Net loss
$
(255 ) $ (2,688
) $ (4,355 )
$ (6,944 ) Basic and
diluted loss per share of common stock $ (.05 ) $ (.57 ) $ (.91 ) $
(1.48 ) Shares used in computing basic and diluted loss per
share 4,808 4,720 4,775 4,693
Condensed Consolidated Balance Sheets
(unaudited) Chromcraft Revington, Inc. (In thousands)
December 31, December 31,
2011 2010
Assets Cash $ - $ 4,179 Accounts receivable, less
allowance of $150 in 2011 and $300 in 2010 8,581 7,552 Inventories
14,194 14,191 Prepaid expenses and other
745
711 Current assets 23,520 26,633
Property, plant and equipment, net 6,483 7,235 Other assets
819 579 Total assets
$ 30,822 $
34,447 Liabilities and Stockholders' Equity
Revolving credit facility $ 901 $ - Accounts payable 3,955
4,144 Accrued liabilities
3,699
3,346 Current liabilities 8,555 7,490
Deferred compensation 327 461 Other long-term liabilities
1,075 1,667 Total liabilities
9,957 9,618 Stockholders' equity
20,865
24,829 Total liabilities and
stockholders' equity
$ 30,822
$ 34,447
Condensed Consolidated Statements of Cash Flows (unaudited)
Chromcraft Revington, Inc. (In thousands)
Twelve Months Ended December 31, December 31,
2011 2010 Operating Activities Net
loss $ (4,355 ) $ (6,944 )
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization expense 763 905 Non-cash share based
and ESOP compensation expense 391 191 Provision for doubtful
accounts 48 148 Amortization of deferred financing costs 86 50
Non-cash inventory write-downs 200 375 Non-cash asset impairment
charges - 350 Non-cash accretion expense 34 33 (Gain) loss on
disposal of assets 12 (5 ) Changes in operating assets and
liabilities: Accounts receivable (1,077 ) (39 ) Refundable income
taxes - 6,578 Inventories (203 ) (1,272 ) Prepaid expenses and
other (34 ) 279 Accounts payable (189 ) 780 Accrued liabilities 353
(559 ) Long-term deferred compensation (134 ) (138 ) Other
long-term liabilities and assets
(750
) 3 Cash provided by
(used in) operating activities
(4,855
) 735 Investing
Activities Capital expenditures (25 ) (197 ) Proceeds on disposal
of assets
2 5
Cash used in investing activities
(23
) (192 )
Financing Activities Deferred financing costs (202 ) - Net
borrowings on revolving credit facility
901
- Cash provided by
financing activities
699
- Change in cash (4,179 ) 543
Cash at beginning of the period
4,179
3,636 Cash at end of the period
$ - $
4,179
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