* Reports Third Consecutive Profitable Quarter
WOODBURY, N.Y., Jan. 10 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its unaudited financial results for the first fiscal quarter ended November 26, 2005.
For the first quarter, revenue from continuing operations increased by 17.8% to $35.8 million from the $30.4 million reported for the same period last year.
For the first quarter, the Company generated net income of $848,000, which includes a $195,000 gain from the early termination of a lease for a store which was closed in June 2005, or $0.11 per basic and diluted share compared to net loss of $2,465,000 or ($0.43) per basic and diluted share for the same period last year.
Operating margins from continuing operations increased in the first quarter to 32.3% from 28.6% in the same period last year.
For the first quarter, selling, general, and administrative expenses from continuing operations decreased to 29.9% as a percentage of revenue from continuing operations compared to 34.4% for the same period last year.
During the first quarter, the Company closed one store in Indiana. During fiscal 2005, the Company closed 20 stores, of which the operating results of 18 were reported as discontinued operations. For the first quarter of fiscal 2006, income from discontinued operations was $165,000. For the first quarter of fiscal 2005, loss from discontinued operations was $398,000.
During the quarter, the Company did not open any stores and closed one store as described above.
Commenting on the results for the quarter, Harley J. Greenfield, Chief Executive Officer of Jennifer said, "We are pleased to report our third consecutive profitable quarter. As I stated at the end of our fiscal year, we continue to see the benefit of the strategies we have implemented to provide customers incredible values while maintaining acceptable margins. These strategies, coupled with our reduced overhead and improved supply chain, should continue to produce increased sales and improved margins in the future." Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 177 Jennifer Convertibles(R) stores and 16 Jennifer Leather stores. As of November 26, 2005, the Company owned 169 stores and licensed 24 (including 23 owned and operating stores by a private company on a royalty free basis.) Statements in this press release other than the statements of historical fact are "forward-looking statements." Such statements are subject to certain risks and uncertainties, including changes in retail demand, vendor performance and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission that could cause actual results to differ materially from any forward-looking statements. These forward-looking statements represent the Company's judgement as of the date of the release. The Company disclaims, however, any interest or obligations to update these forward-looking statements.
JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS) 11/26/05 8/27/05 CASH AND CASH EQUIVALENTS $11,174 $7,177
RESTRICTED CASH 111 111
ACCOUNTS RECEIVABLE 1,261 1,089
MERCHANDISE INVENTORIES, Net 12,472 13,366
DUE FROM AFFILIATED COMPANY 4,561 4,890
PREPAID EXPENSES AND OTHER CURRENT ASSETS 896 1,072
TOTAL CURRENT ASSETS 30,475 27,705 FIXTURES, EQUIPMENT & LEASEHOLD IMPROVEMENTS, Net 2,166 2,259
ANNUITY CONTRACT 1,020 1,013
DEFERRED LEASE COST AND OTHER INTANGIBLES, Net 30 31
GOODWILL, Net 1,650 1,650
OTHER ASSETS 624 557
$35,965 $33,215 ACCOUNTS PAYABLE $17,802 $18,612
CUSTOMER DEPOSITS 9,841 7,840
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 4,123 3,559
DUE TO AFFILIATED COMPANY 550 450
DEFERRED RENT AND ALLOWANCES - Current Portion 524 551
TOTAL CURRENT LIABILITIES 32,840 31,012 DEFERRED RENT AND ALLOWANCES - Net of Current
Portion 3,044 3,051 STOCKHOLDERS' EQUITY 81 (848) $35,965 $33,215 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA) THIRTEEN WEEKS ENDED
11/26/05 11/27/04
REVENUE:
NET SALES $33,399 $28,484
REVENUE FROM SERVICE CONTRACTS 2,441 1,949
35,840 30,433 COST OF SALES AND OTHER CHARGES 24,278 21,738 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 10,713 10,458 DEPRECIATION AND AMORTIZATION 200 272
35,191 32,468 INCOME (LOSS) FROM OPERATIONS 649 (2,035) INTEREST INCOME 79 23 INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 728 (2,012) INCOME TAXES 45 55 INCOME (LOSS) FROM CONTINUING OPERATIONS 683 (2,067) INCOME (LOSS) FROM DISCONTINUED OPERATIONS
(including income (loss) on store closings of
$195 and ($134) in fiscal
2006 and 2005, respectively) 165 (398) NET INCOME (LOSS) $848 $(2,465)
BASIC INCOME (LOSS) PER COMMON SHARE: INCOME (LOSS) FROM CONTINUING OPERATIONS $0.09 $(0.36)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS 0.02 (0.07)
NET INCOME (LOSS) PER COMMON SHARE $0.11 $(0.43) DILUTED INCOME (LOSS) PER COMMON SHARE: INCOME (LOSS) FROM CONTINUING OPERATIONS $0.09 $(0.36)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS 0.02 (0.07)
NET INCOME (LOSS) PER COMMON SHARE $0.11 $(0.43) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,793,058 5,744,725 COMMON SHARES ISSUABLE ON CONVERSION OF SERIES A
PARTICIPATING PREFERRED STOCK 1,424,500 -- TOTAL WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING BASIC 7,217,558 5,744,725 EFFECT OF POTENTIAL COMMON SHARE ISSUANCE:
STOCK OPTIONS 216,546 --
SERIES B CONVERTIBLE PREFERRED STOCK 44,770 --
WARRANTS 221,979 -- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
DILUTED 7,700,853 5,744,725
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe of Radcliffe & Associates, Inc., +1-212-605-0534, for Jennifer Convertibles, Inc. |