- Reports Fifth Consecutive Profitable Quarter
WOODBURY, N.Y., July 11 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its unaudited financial results for the third fiscal quarter ended May 27, 2006.
For the third quarter, revenue from continuing operations increased by 16.4% to $35.5 million from the $30.5 million reported for the same period last year. For the nine-month period, revenue from continuing operations increased 21.4% to $104.2 million from the $85.8 reported in the same period last year.
For the third quarter, the Company generated net income of $2,245,000 or $0.31 and $0.26 per basic and diluted share, respectively, compared to net income of $1,373,000 or $0.19 per basic and diluted share for the same period last year. For the nine-month period, the net income was $3,646,000 or $0.50 and $0.44 per basic and diluted share, respectively, compared to a net loss of $6,455,000 or ($1.12) per basic and diluted share for the same period last year.
Operating margins from continuing operations increased during the current three and nine month periods to 32.5% and 31.4%, respectively, compared to operating margins from continuing operations of 29.2% and 27.2%, respectively, during the three and nine month periods last year.
For the third quarter, selling, general and administrative expenses from continuing operations decreased to 25.8% as a percentage of revenue from continuing operations compared to 30.2% for the same period last year. For the nine-month period, selling, general and administrative expenses from continuing operations decreased to 27.6% compared to 32.9% for the same period last year.
During the third quarter, we closed a store in Las Vegas, Nevada. The operating results of this closed store and two stores closed during the prior two quarters are recorded in discontinued operations. During fiscal 2005, the Company closed 20 stores, of which the operating results of 18 were reported as discontinued operations. Loss from discontinued operations amounted to ($11,000) and ($103,000) in the third quarter of 2006 and 2005, respectively. For the nine month periods for fiscal 2006 and 2005, income (loss) from discontinued operations amounted to $112,000 and ($954,000), respectively.
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, "We are extremely pleased to again report significant increases in revenues and operating results for our third fiscal quarter. This marks our fifth consecutive profitable quarter." Mr. Greenfield added, "Strong demand for our product offerings has continued and we anticipate reporting increasing revenues, while maintaining operating margins, resulting in continued profitability. We believe the results, which have been achieved during the previous five quarters, confirm that our plan is on course to restore profitability and growth. We expect this to continue into the future." Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 175 Jennifer Convertibles(R) stores and 16 Jennifer Leather stores. As of May 27, 2006, the Company owned 167 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 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)
05/27/06 08/27/05 CASH AND CASH EQUIVALENTS $9,809 $7,177
RESTRICTED CASH 864 111
ACCOUNTS RECEIVABLE 500 1,089
MERCHANDISE INVENTORIES, Net 13,981 13,366
DUE FROM AFFILIATED COMPANY 4,765 4,890
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,352 1,072
31,271 27,705 FIXTURES, EQUIPMENT & LEASEHOLD IMPROVEMENTS, Net 2,557 2,259
ANNUITY CONTRACT 928 1,013
GOODWILL 1,650 1,650
OTHER ASSETS 635 588 $37,041 $33,215 ACCOUNTS PAYABLE $16,472 $ 18,612
CUSTOMER DEPOSITS 8,711 7,840
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 4,208 3,559
DUE TO AFFILIATED COMPANY 550 450
DEFERRED RENT AND ALLOWANCES - Current Portion 562 551
TOTAL CURRENT LIABILITIES 30,503 31,012 DEFERRED RENT AND ALLOWANCES - Net of
Current Portion 2,978 3,051
OBLIGATIONS UNDER CAPITAL LEASES - Net of
Current Portion 128 -
TOTAL LIABILITIES 33,609 34,063 STOCKHOLDERS' EQUITY (CAPITAL DEFICIT) 3,432 (848) $37,041 $33,215 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA) THREE MONTHS ENDED NINE MONTHS ENDED
05/27/06 05/28/05 05/27/06 05/28/05
REVENUE:
NET SALES $33,071 $28,383 $97,105 $80,187
REVENUE FROM SERVICE
CONTRACTS 2,425 2,085 7,065 5,624
35,496 30,468 104,170 85,811 COST OF SALES AND
OTHER CHARGES 23,944 21,583 71,433 62,430 SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 9,146 9,191 28,723 28,232 IMPAIRMENT OF GOODWILL - - - 146 DEPRECIATION AND
AMORTIZATION 223 201 617 697 RECOVERY OF PRIOR YEAR
RECEIVABLES FROM
PRIVATE COMPANY - (2,000) - (2,000)
33,313 28,975 100,773 89,505 INCOME (LOSS) FROM
OPERATIONS 2,183 1,493 3,397 (3,694) INTEREST INCOME 109 33 264 82 INTEREST EXPENSE 22 1 22 2 INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 2,270 1,525 3,639 (3,614) INCOME TAXES 14 49 105 1,887 INCOME (LOSS) FROM
CONTINUING OPERATIONS 2,256 1,476 3,534 (5,501) INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
(including income (loss)
on store closings of $0
and $31 for the thirteen
weeks and $182 and ($300)
for the thirty-nine weeks
ended in 2006 and 2005,
respectively) (11) (103) 112 (954) NET INCOME (LOSS) $2,245 $1,373 $3,646 $(6,455) BASIC INCOME (LOSS) PER
COMMON SHARE: INCOME (LOSS) FROM
CONTINUING OPERATIONS $0.31 $0.20 $0.48 $ (0.96)
INCOME (LOSS) FROM
DISCONTINUED
OPERATIONS - (0.01) 0.02 (0.16)
NET INCOME (LOSS) $0.31 $0.19 $0.50 $ (1.12) DILUTED INCOME (LOSS)
PER COMMON SHARE: INCOME (LOSS) FROM
CONTINUING OPERATIONS $0.26 $0.20 $0.43 $ (0.96)
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS - (0.01) 0.01 (0.16)
NET INCOME (LOSS) $0.26 $0.19 $0.44 $ (1.12) WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,933,705 5,783,058 5,851,919 5,767,948 WEIGHTED AVERAGE
COMMON SHARES ISSUABLE
ON CONVERSION OF
OUTSTANDING SERIES A
PARTICIPATING
PREFERRED STOCK 1,396,722 1,424,500 1,415,309 - TOTAL WEIGHTED AVERAGE
COMMON SHARES BASIC 7,330,427 7,207,558 7,267,228 5,767,948 EFFECT OF POTENTIAL
COMMON SHARE ISSUANCE:
STOCK OPTIONS 1,115,264 103,550 615,877 -
WARRANTS 287,979 - 269,193 -
SERIES B CONVERTIBLE
PREFERRED STOCK 62,216 40,167 62,216 - WEIGHTED AVERAGE COMMON
SHARES DILUTED 8,795,886 7,351,275 8,214,514 5,767,948
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe of Radcliffe & Associates, Inc. for Jennifer Convertibles, Inc., +1-212-605-0201
|