-- Returns to profitability
WOODBURY, N.Y., April 10 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its unaudited financial results for the second fiscal quarter ended February 24, 2007.
For the second quarter, revenue from continuing operations increased by 1.6% to $33.4 million from the $32.9 million reported for the same period last year. For the six-month period, revenue from continuing operations decreased 3.6% to $66.2 million from the $68.7 reported in the same period last year.
For the second quarter, the Company generated net income of $1,258,000 or $0.16 and $0.14 per basic and diluted share, respectively, compared to a net income of $554,000 or $0.08 and $0.07 per basic and diluted share, respectively, for the same period last year. For the six-month period, the net income was $621,000 or $0.08 and $0.07 per basic and diluted share, respectively, compared to a net income of $1,401,000 or $0.19 and $0.18 per basic and diluted share, respectively, for the same period last year.
Operating margins from continuing operations increased during the current three-month period to 29.6% compared to 29.3% the same period last year. For the current six-month period operating margins from continuing operations decreased to 29.7% compared to 30.9% for the six-month period last year.
For the second quarter, selling, general, and administrative expenses from continuing operations decreased to 25.9% as a percentage of revenue from continuing operations compared to 27.0% for the same period last year. For the six-month period, selling, general and administrative expenses from continuing operations increased to 28.6% compared to 28.5% for the same period last year.
During the second quarter, we closed four stores in Illinois. The operating results of these closed stores were recorded in continuing operations based on managements' judgment that there will be significant continuing sales to customers of the closed stores from other stores in their respective areas. For the second quarter of fiscal 2006 loss from discontinued operation was $32,000.
During the quarter, the Company did not open any stores and closed four stores as described above.
Commenting on the results Harley J. Greenfield, Chief Executive Officer of Jennifer said, "I am very pleased to report that the strategies which we utilized in merchandising and advertising, and our adjustments to margins returned the Company to profitability during our second fiscal quarter. This was accomplished despite softness generally in the furniture industry, which continues to impact our operations. We expect profitability to continue." Mr. Greenfield added, "We are extremely excited about the opening, at the end of May, of our first Ashley Furniture HomeStore. We believe that the Ashley stores added to our solid Jennifer base will propel the Company to a new level." 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 16 Jennifer Leather stores. As of April 9, 2007, the Company owned 162 stores and licensed 25 stores. Of the 25 stores, 24 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 STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA) THREE MONTHS ENDED SIX MONTHS ENDED
02/24/07 02/25/06 02/24/07 02/25/06
REVENUE:
NET SALES $ 31,286 $30,730 $61,885 $64,034
REVENUE FROM SERVICE
CONTRACTS 2,185 2,202 4,285 4,640
33,471 32,932 66,170 68,674 COST OF SALES AND OTHER CHARGES 23,551 23,298 46,488 47,468 SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 8,660 8,883 18,955 19,577 DEPRECIATION AND AMORTIZATION 228 196 453 394
32,439 32,377 65,896 67,439 INCOME FROM OPERATIONS 1,032 555 274 1,235 INTEREST INCOME 198 77 353 155 INTEREST EXPENSE (3) - (7) - INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 1,227 632 620 1,390 INCOME TAXES (31) 46 (1) 91 INCOME FROM CONTINUING
OPERATIONS 1,258 586 621 1,299 (LOSS) INCOME FROM OPERATIONS
OF DISCONTINUED OPERATIONS
(including (loss) income on
store closings of $(13) for the
thirteen weeks and $182 for the
twenty-six weeks ended in 2006) - (32) - 102 NET INCOME $1,258 $554 $621 $1,401
BASIC INCOME PER COMMON SHARE:
INCOME FROM CONTINUING
OPERATIONS $0.16 $0.08 $0.08 $ 0.18
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS - - - 0.01
NET INCOME PER COMMON SHARE $0.16 $0.08 $0.08 $ 0.19 DILUTED INCOME PER COMMON SHARE: INCOME FROM CONTINUING
OPERATIONS $0.14 $0.07 $0.07 $0.17
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS - - - .01
NET INCOME PER COMMON SHARE $0.14 $0.07 $0.07 $ 0.18 WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 6,838,162 5,829,714 6,821,013 5,811,285 COMMON SHARES ISSUABLE ON
CONVERSION OF SERIES A
PARTICIPATING PREFERRED
STOCK 924,500 1,424,500 924,500 1,424,500 TOTAL WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
BASIC 7,762,662 7,254,214 7,745,513 7,235,785 EFFECT OF POTENTIAL COMMON
SHARE ISSUANCE:
STOCK OPTIONS 829,330 921,973 1,040,234 451,007
WARRANTS 78,182 71,219 86,808 50,698
SERIES B CONVERTIBLE
PREFERRED STOCK 62,216 62,216 - 56,882 WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING DILUTED 8,732,390 8,309,622 8,872,555 7,794,372 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS) 02/24/07 08/26/06 CASH AND CASH EQUIVALENTS $16,529 $ 12,641
RESTRICTED CASH 74 864
ANNUITY CONTRACT 949 -
ACCOUNTS RECEIVABLE 1,056 906
MERCHANDISE INVENTORIES, Net 13,218 13,597
DUE FROM AFFILIATED COMPANY 4,811 4,869
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,778 1,160
38,415 34,037 FIXTURES, EQUIPMENT & LEASEHOLD
IMPROVEMENTS, Net 2,949 2,682
ANNUITY CONTRACT - 935
GOODWILL 1,650 1,650
OTHER ASSETS 688 703 $43,702 $40,007
ACCOUNTS PAYABLE $19,228 $ 18,838
CUSTOMER DEPOSITS 9,546 7,036
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 4,271 4,383
DUE TO AFFILIATED COMPANY 600 500
DEFERRED RENT AND ALLOWANCES - Current Portion 642 587
TOTAL CURRENT LIABILITIES 34,287 31,344 DEFERRED RENT AND ALLOWANCES -
Net of Current Portion 2,932 2,959
OBLIGATIONS UNDER CAPITAL LEASES -
Net of Current Portion 132 145
TOTAL LIABILITIES 37,351 34,448 STOCKHOLDERS' EQUITY 6,351 5,559
$ 43,702 $ 40,007
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe, Radcliffe & Associates, +1-212-605-0201, for Jennifer Convertibles, Inc. |