- Revenue from continuing operations decreased 16.3% for quarter, 9.7% year-to-date
WOODBURY, N.Y., Nov. 26 /PRNewswire-FirstCall/ --
Jennifer Convertibles, Inc. (AMEX:JEN) announced today its financial results for the fourth quarter and fiscal year ended August 30, 2008.
For the fourth quarter, revenue from continuing operations decreased by 16.3% to $30.8 million from the $36.8 million reported for the same period last year. For the fiscal year 2008, revenue from continuing operations decreased 9.7% to $120.9 million from the $133.9 reported in the same period last year.
For the fourth quarter, the Company had a net loss of ($867,000), or ($0.12) per basic and diluted share, compared to net income of $1,741,000, or $0.22 and $0.20 per basic and diluted share, respectively, for the same period last year. For the fiscal year 2008, the net loss was ($3,329,000) or ($0.47) per basic and diluted share, compared to net income of $3,971,000 or $0.51 and $0.45 per basic and diluted share, respectively, for the same period last year.
For the fourth quarter, operating margins from continuing operations decreased to 30.8% as a percentage of revenue from continuing operations compared to 33.0% for the same period last year. For the twelve-month period, operating margins from continuing operations decreased to 29.3% compared to 31.3% for the same period last year.
For the fourth quarter, selling, general and administrative expenses from continuing operations increased to 32.9% as a percentage of revenue from continuing operations compared to 27.8% for the same period last year. For the twelve-month period, selling, general and administrative expenses from continuing operations increased to 31.4% compared to 28.0% for the same period last year.
During the fourth quarter, the Company closed one store. During fiscal 2008, the Company closed ten stores, of which the operating results of six stores were reported as discontinued operations. Loss from discontinued operations amounted to $39,000 and $49,000 in the fourth quarter of 2008 and 2007, respectively. For the twelve-month periods for fiscal 2008 and 2007, loss from discontinued operations amounted to $269,000 and $180,000, respectively.
Commenting on the results of the year, Harley J. Greenfield Chief Executive of Jennifer said," Although I am certainly not pleased with the results achieved during fiscal 2008, I believe we have the right strategy in place, even in this unprecedented economy to provide customers merchandise at incredible values while maintaining good margins. We continue to implement strategies to reduce costs. We have also modified our warehousing and management agreements with the Related Company, beginning January 2009. These changes, based on last year's level of activity, would have resulted in approximately $1,400,000 in annual expense reductions. We believe we are excellently positioned to take advantage of any upturn in the economy."
Mr. Greenfield added, " We are pleased with the progress of our Ashley division which is now generating approximately 10% of our revenues. We are pursuing the opening of a third store in 2009. We are also pleased that in this time of credit concern we had approximately $11.5 million in cash and investments at year-end and a vendor line of credit for $10 million which is committed into 2010."
Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 156 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 14 Jennifer Leather stores. As of November 26, 2008, the Company owned 148 stores and licensed 22 (including 21 owned and operated by a related company on a royalty free basis) and operates two 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)
08/30/08 08/25/07
CASH AND CASH EQUIVALENTS $9,057 $8,375
MARKETABLE AUCTION RATE SECURITIES - 8,300
RESTRICTED CASH 1,116 1,076
ACCOUNTS RECEIVABLE 779 855
MERCHANDISE INVENTORIES, Net 10,646 14,391
DUE FROM RELATED COMPANY 4,063 4,834
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,508 1,235
27,169 39,066
MARKETABLE AUCTION RATE SECURITIES 1,400 -
FIXTURES, EQUIPMENT & LEASEHOLD
IMPROVEMENTS, Net 3,202 3,377
GOODWILL 1,650 1,650
OTHER ASSETS 691 706
$34,112 $44,799
ACCOUNTS PAYABLE $12,932 $19,718
CUSTOMER DEPOSITS 6,493 6,543
ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES 3,892 4,183
DUE TO RELATED COMPANY 400 550
DEFERRED RENT AND ALLOWANCES -
Current Portion 634 713
TOTAL CURRENT LIABILITIES 24,351 31,707
DEFERRED RENT AND ALLOWANCES -
Net of Current Portion 2,905 2,948
OBLIGATIONS UNDER CAPITAL LEASES -
Net of Current Portion 139 119
TOTAL LIABILITIES 27,395 34,774
STOCKHOLDERS' EQUITY 6,717 10,025
$34,112 $44,799
JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
08/30/08 08/25/07 08/30/08 08/25/07
REVENUE:
NET SALES $29,067 $34,510 $113,851 $125,300
REVENUE FROM SERVICE
CONTRACTS 1,777 2,301 7,114 8,652
30,844 36,811 120,965 133,952
COST OF SALES AND OTHER
CHARGES 21,331 24,660 85,503 92,045
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 10,152 10,236 38,009 37,452
DEPRECIATION AND
AMORTIZATION 250 237 1,008 902
31,733 35,133 124,520 130,399
(LOSS) INCOME FROM
OPERATIONS (889) 1,678 (3,555) 3,553
INTEREST INCOME 70 195 521 736
INTEREST EXPENSE (5) (3) (16) (14)
(LOSS) INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (824) 1,870 (3,050) 4,275
INCOME TAXES 4 80 10 124
(LOSS)INCOME FROM CONTINUING
OPERATIONS (828) 1,790 (3,060) 4,151
(LOSS) FROM DISCONTINUED
OPERATIONS (including loss on
store closings of $84 for
fiscal 2008) (39) (49) (269) (180)
NET INCOME (LOSS) $(867) $1,741 $(3,329) $3,971
THREE MONTHS ENDED TWELVE MONTHS ENDED
08/30/08 08/25/07 08/30/08 08/25/07
BASIC INCOME (LOSS) PER
COMMON SHARE:
INCOME FROM CONTINUING
OPERATIONS $(0.11) $0.22 $(0.43) $0.53
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS (0.01) - (0.04) (0.02)
NET INCOME $(0.12) $0.22 $(0.47) $0.51
DILUTED INCOME (LOSS) PER
COMMON SHARE:
INCOME FROM CONTINUING
OPERATIONS $(0.11) $0.20 $(0.43) $0.47
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS (0.01) - (0.04) (0.02)
NET INCOME $(0.12) $0.20 $(0.47) $0.45
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,073,466 7,136,641 7,073,466 6,910,523
WEIGHTED AVERAGE COMMON
SHARES ISSUABLE ON
CONVERSION OF OUTSTANDING
SERIES A PARTICIPATING
PREFERRED STOCK - 924,500 - 924,500
TOTAL WEIGHTED AVERAGE
COMMON SHARES BASIC 7,073,466 8,061,141 7,073,466 7,835,023
EFFECT OF POTENTIAL
COMMON SHARE ISSUANCE:
STOCK OPTIONS - 633,896 - 847,359
WARRANTS - 74,802 - 81,635
SERIES B CONVERTIBLE
PREFERRED STOCK - 33,592 - 54,265
WEIGHTED AVERAGE COMMON
SHARES DILUTED 7,073,466 8,803,431 7,073,466 8,818,282
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe of Radcliffe & Associates, +1-212-605-0201,
for Jennifer Convertibles, Inc.