- Revenue from continuing operations decreased 8.5% for quarter
WOODBURY, N.Y., Jan. 9 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its unaudited financial results for the first fiscal quarter ended November 25, 2006.
For the first quarter, revenue from continuing operations decreased by 8.5% to $32.7 million from the $35.7 million reported for the same period last year.
For the first quarter, the Company had a net loss of $637,000 or ($0.09) per basic and diluted share, compared to 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 $0.12 and $0.11 per basic and diluted share, respectively, for the same period last year.
Operating margins from continuing operations decreased in the first quarter to 29.9% from 32.4% during the same period last year.
For the first quarter, selling, general and administrative expenses from continuing operations increased to 31.5% as a percentage of revenue from continuing operations compared to 29.9% for the same period last year.
During the thirteen-week period ended November 25, 2006, the Company closed a store in Woodland Hills, California and its operating results are recorded in continuing operations based on management's judgment that there will be significant continuing sales to costumers of the closed store from other stores in the area. For the first quarter of fiscal 2006, income from discontinued operations was $134,000.
During the quarter, the Company did not open any stores and closed one store as described above.
Commenting on the results Harley J. Greenfield, Chief Executive Officer of Jennifer said, "The softness that has been experienced for some time in the retail furniture industry finally impacted our results. As I had indicated previously we noticed a softening in demand at the end of our fourth fiscal quarter. We have made a number of changes including adjustments to margins, merchandising strategies and advertising and believe that these changes will return the Company to profitability in the near future, even if the softness in the industry continues." Mr. Greenfield added, "On a brighter note our cash and investments increased to more than $15.5 million and at the end of the quarter our customer deposits (which result in future sales) increased by almost $3.5 million. Work is underway to complete our first Ashley Furniture HomeStore, which we expect to open by the end of April. This store will be more than 40,000 square and located on Glen Cove Road in Carle Place, New York. We are currently in the process of evaluating locations for our next two Ashley Furniture HomeStores. We believe based on our analysis of stores in similar metropolitan areas that these stores will add substantial growth to our solid Jennifer base as we expect each store to generate between $15 and $20 million in revenues with solid profits." Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 171 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 16 Jennifer Leather stores. As of January 9, 2007, the Company owned 163 stores and licensed 24 stores. Of the 24 stores, 23 are owned and operated by a related private company and one is managed by the private company.
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 judgment 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) 11/25/06 08/26/06 CASH AND CASH EQUIVALENTS $14,800 $12,641
CERTIFICATE OF DEPOSIT 750 -
RESTRICTED CASH 114 864
ACCOUNTS RECEIVABLE 1,209 906
MERCHANDISE INVENTORIES, Net 10,969 13,597
DUE FROM AFFILIATED COMPANY 4,768 4,869
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,197 1,160
33,807 34,037 FIXTURES, EQUIPMENT & LEASEHOLD IMPROVEMENTS, Net 2,711 2,682
ANNUITY CONTRACT 942 935
GOODWILL 1,650 1,650
OTHER ASSETS 699 703 $39,809 $40,007
ACCOUNTS PAYABLE $15,615 $18,838
CUSTOMER DEPOSITS 10,473 7,036
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 4,551 4,383
DUE TO AFFILIATED COMPANY 550 500
DEFERRED RENT AND ALLOWANCES - Current Portion 610 587
TOTAL CURRENT LIABILITIES 31,799 31,344 DEFERRED RENT AND ALLOWANCES - Net of
Current Portion 2,884 2,959
OBLIGATIONS UNDER CAPITAL LEASES - Net of
Current Portion 139 145
TOTAL LIABILITIES 34,822 34,448 STOCKHOLDERS' EQUITY 4,987 5,559 $39,809 $40,007 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA) THIRTEEN WEEKS ENDED
11/25/06 11/26/05
REVENUE:
NET SALES $30,599 $33,304
REVENUE FROM SERVICE CONTRACTS 2,100 2,438
32,699 35,742 COST OF SALES AND OTHER CHARGES 22,937 24,170 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 10,295 10,693 DEPRECIATION AND AMORTIZATION 225 198
33,457 35,061 (LOSS) INCOME FROM OPERATIONS (758) 681 INTEREST INCOME 155 78 INTEREST EXPENSE (4) - (LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (607) 759 INCOME TAXES 30 45 (LOSS) INCOME FROM CONTINUING OPERATIONS (637) 714 (LOSS) INCOME FROM DISCONTINUED OPERATIONS
(including income on store closings of $0 and
$195 for the thirteen weeks ended in 2006
and 2005, respectively) - 134 NET (LOSS) INCOME $(637) $848 BASIC (LOSS) INCOME PER COMMON SHARE: (LOSS) INCOME FROM CONTINUING OPERATIONS $(0.09) $0.10
INCOME (LOSS) FROM DISCONTINUED OPERATIONS - 0.02
NET (LOSS) INCOME $(0.09) $0.12
DILUTED (LOSS) INCOME PER COMMON SHARE: (LOSS) INCOME FROM CONTINUING OPERATIONS $(0.09) $0.09
INCOME (LOSS) FROM DISCONTINUED OPERATIONS - 0.02
NET (LOSS) INCOME $(0.09) $0.11
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 6,803,973 5,793,058 WEIGHTED AVERAGE COMMON SHARES ISSUABLE
ON CONVERSION OF OUTSTANDING SERIES A
PARTICIPATING PREFERRED STOCK - 1,424,500 TOTAL WEIGHTED AVERAGE COMMON SHARES
BASIC 6,803,973 7,217,558 EFFECT OF POTENTIAL COMMON SHARE ISSUANCE:
STOCK OPTIONS - 216,546
WARRANTS - 16,479
SERIES B CONVERTIBLE PREFERRED STOCK - 45,013 WEIGHTED AVERAGE COMMON SHARES DILUTED 6,803,973 7,495,596
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe, Radcliffe & Associates, +1-212-605-0201 Web site: http://investors.jenniferfurniture.com/
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