- Revenue from continuing operations increased 3.9% for quarter, decreased 2.2% year-to-date
WOODBURY, N.Y., Nov. 20 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its financial results for the fourth quarter and fiscal year ended August 25, 2007.
For the fourth quarter, revenue from continuing operations increased by 3.9% to $37.5 million from the $36.1 million reported for the same period last year. For the fiscal year 2007, revenue from continuing operations decreased 2.2% to $136.6 million from the $139.7 reported in the same period last year.
For the fourth quarter, the Company generated net income of $1,741,000, or $0.25 and $0.23 per basic and diluted share, respectively, compared to net income of $1,573,000, or $0.21 and $0.18 per basic and diluted share for the same period last year. For the fiscal year 2007, net income was $3,971,000 or $0.54 and $0.48 per basic and diluted share, respectively, compared to net income of $5,220,000 or $0.71 and $0.63 per basic and diluted share for the same period last year.
For the fourth quarter, operating margins from continuing operations increase to 32.9% as a percentage of revenue from continuing operations compared to 32.0% for the same period last year. For the twelve month period, operating margins from continuing operations decreased to 31.2% compared to 31.6% for the same period last year.
For the fourth quarter, selling, general and administrative expenses from continuing operations increased to 27.9% as a percentage of revenue from continuing operations compared to 26.8% for the same period last year. For the twelve month period, selling, general and administrative expenses from continuing operations increased to 28.0% compared to 27.4% for the same period last year.
During the fourth quarter, the Company closed three stores. During fiscal 2007, the Company closed eight stores, of which the operating results of two stores were reported as discontinued operations. (Loss) income from discontinued operations amounted to $(26,000) and $3,000 in the fourth quarter of 2007 and 2006, respectively. For the twelve month periods for fiscal 2007 and 2006, (loss) income from discontinued operations amounted to $(79,000) and $139,000, respectively.
Harley J Greenfield, Chief Executive Officer of Jennifer said, "I am extremely pleased to report the results for the fourth quarter and fiscal year ended August 25, 2007. Our industry has been under extreme pressure for some time, which has impacted our comparable store sales numbers. Despite this downturn in the industry we have been able to maintain our profitability due to cost cutting, supply chain management and adjusting our merchandising and advertising strategies. During the year, we increased cash and marketable securities to more than $17.7 million and stockholder's equity to over $10 million." Mr. Greenfield added, "Late in our fiscal year we opened our first Ashley Furniture HomeStore. The grand opening of this 40,000 square foot store took place in mid-June. During the fiscal year, the expenses associated with opening, staffing, training, advertising, and initial operations generated a loss of $677,000, which impacted our year-end results by about $0.08- $0.09 per share. However, the sales volume generated by this store will be the equivalent to that of 10 to 15 Jennifer stores. We expect that this store will add significant revenues and profitability in fiscal 2008. We plan to open at least one and possibly more of these stores in our next fiscal year. We believe that start-up expenses will be dramatically less as we open additional stores, and these stores will add substantial revenue and increase profitability to our existing strong Jennifer model." Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 165 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 16 Jennifer Leather stores. As of November 20, 2007, the Company owned 159 stores and licensed 22 (including 21 owned and operated by a related company on a royalty free basis) and operates one licensed Ashley Furniture HomeStore.
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)
08/26/06
08/25/07 (Restated) CASH AND CASH EQUIVALENTS $8,375 $7,641
MARKETABLE SECURITIES 8,300 5,000
RESTRICTED CASH 1,076 864
ACCOUNTS RECEIVABLE 855 906
MERCHANDISE INVENTORIES, Net 14,391 13,597
DUE FROM RELATED COMPANY 4,834 4,869
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,235 1,160
39,066 34,037
FIXTURES, EQUIPMENT &
LEASEHOLD IMPROVEMENTS, Net 3,377 2,682
ANNUITY CONTRACT - 935
GOODWILL 1,650 1,650
OTHER ASSETS 706 703 $44,799 40,007
ACCOUNTS PAYABLE $19,718 $ 18,838
CUSTOMER DEPOSITS 6,543 7,036
ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES 4,183 4,383
DUE TO RELATED COMPANY 550 500
DEFERRED RENT AND ALLOWANCES -
Current Portion 713 587
TOTAL CURRENT LIABILITIES 31,707 31,344 DEFERRED RENT AND ALLOWANCES -
Net of Current Portion 2,948 2,959
OBLIGATIONS UNDER CAPITAL LEASES -
Net of Current Portion 119 145
TOTAL LIABILITIES 34,774 34,448 STOCKHOLDERS' EQUITY 10,025 5,559 $44,799 $40,007 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA) THREE MONTHS ENDED TWELVE MONTHS ENDED
08/25/07 08/26/06 08/25/07 08/26/06
REVENUE:
NET SALES $35,117 $33,630 $127,736 $130,289
REVENUE FROM SERVICE
CONTRACTS 2,360 2,433 8,885 9,465
37,477 36,063 136,621 139,754 COST OF SALES AND
OTHER CHARGES 25,135 24,538 93,948 95,585 SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 10,444 9,650 38,288 38,304 DEPRECIATION AND
AMORTIZATION 243 223 933 839
35,822 34,411 133,169 134,728 INCOME FROM OPERATIONS 1,655 1,652 3,452 5,026 INTEREST INCOME 195 138 736 402 INTEREST EXPENSE (3) (4) (14) (26) INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 1,847 1,786 4,174 5,402 INCOME TAXES 80 216 124 321 INCOME FROM CONTINUING
OPERATIONS 1,767 1,570 4,050 5,081 (LOSS) INCOME FROM
DISCONTINUED OPERATIONS
(including income on store
closings of $180
for fiscal 2006) (26) 3 (79) 139
NET INCOME $1,741 $1,573 $3,971 $5,220 BASIC INCOME (LOSS)
PER COMMON SHARE: INCOME FROM CONTINUING
OPERATIONS $0.25 $0.21 $0.55 $0.69
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS - - (0.01) .02
NET INCOME $0.25 $0.21 $0.54 $0.71 DILUTED INCOME (LOSS) PER
COMMON SHARE: INCOME FROM CONTINUING
OPERATIONS $0.23 $0.18 $049 $0.61
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS - - (0.01) 0.02
NET INCOME $0.23 $0.18 $0.48 $0.63
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,136,641 6,614,770 6,910,523 6,043,157 WEIGHTED AVERAGE COMMON
SHARES ISSUABLE ON
CONVERSION OF OUTSTANDING
SERIES A PARTICIPATING
PREFERRED STOCK 924,500 924,500 924,500 1,292,269 TOTAL WEIGHTED AVERAGE
COMMON SHARES BASIC 8,061,141 7,539,270 7,835,023 7,335,426 EFFECT OF POTENTIAL
COMMON SHARE ISSUANCE:
STOCK OPTIONS 633,896 1,197,445 847,359 886,152
WARRANTS 74,802 87,052 81,635 70,497
SERIES B CONVERTIBLE
PREFERRED STOCK 33,592 62,216 54,265 57,915 WEIGHTED AVERAGE COMMON
SHARES DILUTED 8,803,431 8,885,983 8,818,282 8,349,990
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe, Radcliffe & Associates, +1-212-605-0201
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