[November 13, 2012] |
|
Chromcraft Revington, Inc. Reports Third Quarter and First Nine Month Results
WEST LAFAYETTE, Ind. --(Business Wire)--
Chromcraft Revington, Inc. (NYSE MKT: CRC) today reported its results
for the third quarter of 2012. Sales for the third quarter of 2012 were
$13,673,000 or 3.4% higher than the same period last year, extending the
positive increases over the prior year quarter that began in the fourth
quarter of 2011. Sales for the nine months ended September 29, 2012 were
$41,729,000 or 5.6% higher than the first nine months of 2011. Our net
loss was $717,000 and $3,437,000 for the three and nine month periods
ended September 29, 2012, respectively, or 31.2% and 16.2% lower,
respectively, than the same periods in 2011.
The reduced net loss of $0.7 million in the third quarter of 2012
compared to a net loss of $1.0 million in the third quarter of 2011 was
primarily due to an income tax benefit of $0.2 million resulting from
the final allocation of the purchase price of Executive Office Concepts,
Inc. ("EOC") acquired in March 2012, and to a lesser extent, an increase
in gross margin resulting from higher sales. The reduced net loss for
the first nine months of 2012 compared to the prior year period is
primarily due to the gross margin contributed by EOC products, lower
import sourcing expense and the income tax benefit from the final
allocation of the EOC purchase price.
The increase in sales for the third quarter of 2012 as compared to the
prior year period was primarily due to increased shipments of commercial
furniture, in particular office suites and waiting area furniture
resulting from our acquisition of EOC. Residential shipments for the
third quarter of 2012 were comparable to the third quarter of 2011,
resulting from an increase in sales of home entertainment furniture
offset by lower sales of dining room furniture. Residential furniture
sales were lower in the third quarter of 2012 compared to the second
quarter of 2012, primarily due to lower sales of dining room furniture.
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 difficulties which reflect the ongoing labor market struggles
and reduced consumer access to credit. These factors led to a slight
decrease in residential orders in the third quarter of 2012 compared to
the second quarter of 2012. Commercial product orders increased in the
third quarter of 2012 resulting in our highest quarterly orders since
the third quarter of 2011.
Cash used in operating activities in the first nine months of 2012 was
$1.1 million as compared to $2.6 million used in the prior year period.
The improved cash flow was primarily due to an increase in cash from net
working capital and a lower operating loss. The Company had net
borrowings on its revolving credit facility of $1.5 million in the first
nine months of 2012 which was primarily used to fund the $1.1 million
used for operating activities, the purchase of EOC and the payment of
fees related to our new revolving credit facility with Gibraltar
Business Capital, LLC and the termination of our credit facility with
First Business Capital. Outstanding borrowings on the revolving credit
facility at September 29, 2012 were approximately $2.4 million.
Commenting on these results, Ronald H. Butler, Chairman and Chief
Executive Officer, said, "Despite the continuing low consumer confidence
in the economy and the very difficult retail operating environment, we
increased sales in the third quarter of 2012 as compared to the prior
year period, largely due to increased sales of our commercial furniture
products to the health care industry, primarily through our purchase of
EOC. The ongoing difficult operating environment in the residential
furniture market will continue to be challenging into the first quarter
of 2013. We believe the recent signs of marginal improvement in the
housing market are tempered by the uncertainty over the outcome of the
upcoming federal "fiscal cliff" at the end of 2012 and its impact on
consumer spending.
"Our acquisition of California-based EOC, with its commercial product
lines, especially an extensive health care line, complement our current
product line of seating, tables, and waiting area furniture. In
addition, the three year contract we were awarded late in 2011 with the
Premier healthcare alliance is expected to boost our sales in this
product line. The health care sector continues to grow significantly and
we believe this alliance continues to position the commercial line of
our Chromcraft division favorably for the future."
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 a 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.
Certain information and statements contained in this news release are
forward-looking statements. These forward-looking statements can be
generally identified as such because they include future tense or dates,
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 express management's current
expectations or forecasts of future events or outcomes, but 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 in such statements.
Among such risks and uncertainties that could cause actual results or
outcomes to differ materially from those identified in the
forward-looking statements are the impact of the current economic
difficulties 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 recent slowdown in the U.S. office
furniture market will continue; our ability to sell the right product
mix; our inability to raise prices in response to increasing costs;
continued credit availability under our current credit facility and our
ability to fully utilize the credit facility; our ability to raise
additional financing, if needed; our ability to anticipate or respond to
changes in the tastes or needs of our end users in a timely manner;
supply disruptions with products manufactured in China, Vietnam and
other Asian countries; 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
|
|
|
Nine Months Ended
|
|
|
September 29,
|
|
October 1,
|
|
|
September 29,
|
|
October 1,
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
13,673
|
|
|
$
|
13,226
|
|
|
|
$
|
41,729
|
|
|
$
|
39,528
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
11,023
|
|
|
|
10,709
|
|
|
|
|
33,772
|
|
|
|
32,818
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
2,650
|
|
|
|
2,517
|
|
|
|
|
7,957
|
|
|
|
6,710
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
3,484
|
|
|
|
3,491
|
|
|
|
|
11,132
|
|
|
|
10,598
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(834
|
)
|
|
|
(974
|
)
|
|
|
|
(3,175
|
)
|
|
|
(3,888
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(121
|
)
|
|
|
(68
|
)
|
|
|
|
(500
|
)
|
|
|
(212
|
)
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax benefit
|
|
|
(955
|
)
|
|
|
(1,042
|
)
|
|
|
|
(3,675
|
)
|
|
|
(4,100
|
)
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
238
|
|
|
|
-
|
|
|
|
|
238
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(717
|
)
|
|
$
|
(1,042
|
)
|
|
|
$
|
(3,437
|
)
|
|
$
|
(4,100
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share of common stock
|
|
$
|
(.14
|
)
|
|
$
|
(.22
|
)
|
|
|
$
|
(.69
|
)
|
|
$
|
(.86
|
)
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic and diluted loss per share
|
|
|
5,061
|
|
|
|
4,791
|
|
|
|
|
4,976
|
|
|
|
4,765
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets (unaudited)
|
Chromcraft Revington, Inc.
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
September 29,
|
|
|
|
December 31,
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, less allowance of $165 in 2012 and $150 in 2011
|
|
$
|
7,522
|
|
|
|
$
|
8,581
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
15,108
|
|
|
|
|
14,194
|
|
|
|
|
|
|
|
|
Prepaid expenses and other
|
|
|
701
|
|
|
|
|
745
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
23,331
|
|
|
|
|
23,520
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
6,444
|
|
|
|
|
6,483
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
1,390
|
|
|
|
|
819
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
31,165
|
|
|
|
$
|
30,822
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
$
|
2,425
|
|
|
|
$
|
901
|
|
|
|
|
|
|
|
|
Current maturity of note payable
|
|
|
99
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
6,040
|
|
|
|
|
3,955
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
|
3,503
|
|
|
|
|
3,699
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
12,067
|
|
|
|
|
8,555
|
|
|
|
|
|
|
|
|
Note payable, less current maturity
|
|
|
167
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Deferred compensation
|
|
|
223
|
|
|
|
|
327
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
1,102
|
|
|
|
|
1,075
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
13,559
|
|
|
|
|
9,957
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
17,606
|
|
|
|
|
20,865
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
31,165
|
|
|
|
$
|
30,822
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows (unaudited)
|
Chromcraft Revington, Inc.
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 29,
|
|
|
October 1,
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,437
|
)
|
|
|
$
|
(4,100
|
)
|
|
|
Adjustments to reconcile net loss to
|
|
|
|
|
|
|
|
|
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
499
|
|
|
|
|
593
|
|
|
|
|
|
Non-cash share based and ESOP compensation expense
|
|
|
178
|
|
|
|
|
353
|
|
|
|
|
|
Deferred income tax benefit
|
|
|
(238
|
)
|
|
|
|
-
|
|
|
|
|
|
Provision for doubtful accounts
|
|
|
36
|
|
|
|
|
23
|
|
|
|
|
|
Write-off of deferred financing costs
|
|
|
186
|
|
|
|
|
-
|
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
40
|
|
|
|
|
38
|
|
|
|
|
|
Non-cash inventory write-downs
|
|
|
11
|
|
|
|
|
171
|
|
|
|
|
|
Non-cash accretion expense
|
|
|
27
|
|
|
|
|
26
|
|
|
|
|
|
Changes in operating assets and liabilities, net of effect of
acquired business
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
1,204
|
|
|
|
|
759
|
|
|
|
|
|
|
Inventories
|
|
|
(587
|
)
|
|
|
|
(440
|
)
|
|
|
|
|
|
Prepaid expenses and other
|
|
|
119
|
|
|
|
|
84
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
1,212
|
|
|
|
|
144
|
|
|
|
|
|
|
Long-term liabilities and assets
|
|
|
(393
|
)
|
|
|
|
(224
|
)
|
|
|
Cash used in operating activities
|
|
|
(1,143
|
)
|
|
|
|
(2,573
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(107
|
)
|
|
|
|
(25
|
)
|
|
Proceeds on disposal of assets
|
|
|
5
|
|
|
|
|
2
|
|
|
Acquisition of a business, net of cash acquired
|
|
|
(138
|
)
|
|
|
|
-
|
|
|
|
Cash used in investing activities
|
|
|
(240
|
)
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
Debt issuance costs
|
|
|
(117
|
)
|
|
|
|
-
|
|
|
Payments on EOC note
|
|
|
(24
|
)
|
|
|
|
-
|
|
|
Net borrowings on revolving credit facility
|
|
|
1,524
|
|
|
|
|
-
|
|
|
|
Cash provided by financing activities
|
|
|
1,383
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash
|
|
|
-
|
|
|
|
|
(2,596
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of the period
|
|
|
-
|
|
|
|
|
4,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of the period
|
|
$
|
-
|
|
|
|
$
|
1,583
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-Cash Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of a business:
|
|
|
|
|
|
Assets acquired and liabilities assumed:
|
|
|
|
|
|
|
Identifiable assets acquired and liabilities assumed, net
|
|
$
|
367
|
|
|
|
|
|
Goodwill
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: cash acquired
|
|
|
(62
|
)
|
|
|
|
|
|
Less: note due to seller
|
|
|
(290
|
)
|
|
|
|
|
|
|
|
|
|
|
$
|
138
|
|
|
|
|
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|