-- Revenue from continuing operations decreased 6.3% for quarter, 4.5% year-to-date -- Comparable store sales decreased by 8.2% for quarter, 5.6% year-to-date -- Income from continuing operations $1,609,000 versus $2,256,000 for quarter, $2,230,000 versus $3,555,000 year-to-date -- Basic EPS $0.20 versus $0.31 for quarter, $0.28 versus $0.50 year-to- date -- Diluted EPS $0.18 versus $0.26 for quarter, $0.25 versus $0.46 year-to- date -- First Ashley Furniture HomeStore Opens
WOODBURY, N.Y., July 10 /PRNewswire-FirstCall/ -- Jennifer Convertibles, Inc. (AMEX:JEN) announced today its unaudited financial results for the third fiscal quarter ended May 26, 2007.
For the third quarter, revenue from continuing operations decreased by 6.3% to $33.3 million from the $35.5 million reported for the same period last year. For the nine-month period, revenue from continuing operations decreased 4.5% to $99.4 million from the $104.1 reported in the same period last year.
For the third quarter, the Company generated net income of $1,609,000 or $0.20 and $0.18 per basic and diluted share, respectively, compared to net income of $2,245,000 or $0.31 and $0.26 per basic and diluted share, respectively, for the same period last year. For the nine-month period, the net income was $2,230,000 or $0.28 and $0.25 per basic and diluted share, respectively, compared to a net income of $3,646,000 or $0.50 and $0.46 per basic and diluted share, respectively, for the same period last year.
Operating margins from continuing operations decreased during the current three and nine month periods to 32.0% and 30.5%, respectively, compared to operating margins from continuing operations of 32.5% and 31.4%, respectively, during the three and nine month periods last year.
For the third quarter, selling, general and administrative expenses from continuing operations increased to 26.9% as a percentage of revenue from continuing operations compared to 25.8% for the same period last year. For the nine-month period, selling, general and administrative expenses from continuing operations increased to 28.1% compared to 27.6% for the same period last year.
During the third quarter, the Company did not close any stores. During fiscal 2006, the Company closed three stores, of which the operating results were reported as discontinued operations. Revenues from the closed stores reported as discontinued operations amounted to $70,000 and $345,000 in the thirteen and thirty-nine week periods ended May 27, 2006, respectively. Income (loss) from discontinued operations amounted to ($11,000) and $91,000 in the thirteen-week and thirty-nine week periods ended May 27, 2006, respectively. Income related to store closings approximated $182,000 in the thirty-nine week period ended May 27, 2006.
During the quarter, the Company opened one store and had no store closings. In addition, the Company opened a big box, full line home furniture retail store that sells products and accessories of Ashley Homestores, Ltd.
Commenting on the results Harley J. Greenfield, Chief Executive Officer of Jennifer said, "I am pleased to report that the changes to our merchandising and advertising strategies and adjustment to margins which returned us to profitability during our second fiscal quarter continued to be successful. We achieved a 42% increase in income from operations during the quarter to $1,470,000 from the $1,032,000 reported in the second fiscal quarter despite the furniture industry being significantly depressed. Our balance sheet remains strong with over $15 million in cash and short term investments." Mr. Greenfield added, "We recently opened our first Ashley Furniture HomeStore on Glen Cove Road in Carle Place, New York. Our grand opening of this 40,000 square foot store took place in mid-June and we expect this location to produce substantial revenues and additional profitability to fuel Jennifer's growth. We are currently in the process of negotiating the lease for our second Ashley Furniture HomeStore location." 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 May 26, 2007, the Company owned 163 stores and licensed 24 (including 23 owned and operated by a private 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
05/26/07 (Restated) CASH AND CASH EQUIVALENTS $ 7,047 $ 7,641
SHORT TERM INVESTMENTS 8,150 5,000
RESTRICTED CASH 74 864
ACCOUNTS RECEIVABLE 1,196 906
MERCHANDISE INVENTORIES, Net 13,412 13,597
DUE FROM AFFILIATED COMPANY 4,896 4,869
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,427 1,160
36,202 34,037 FIXTURES, EQUIPMENT & LEASEHOLD IMPROVEMENTS, Net 3,301 2,682
ANNUITY CONTRACT - 935
GOODWILL 1,650 1,650
OTHER ASSETS 685 703 $ 41,838 $ 40,007
ACCOUNTS PAYABLE $ 16,813 $ 18,838
CUSTOMER DEPOSITS 8,557 7,036
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 3,891 4,383
DUE TO AFFILIATED COMPANY 550 500
DEFERRED RENT AND ALLOWANCES - Current Portion 673 587
TOTAL CURRENT LIABILITIES 30,484 31,344 DEFERRED RENT AND ALLOWANCES - Net of Current
Portion 2,948 2,959
OBLIGATIONS UNDER CAPITAL LEASES - Net of
Current Portion 126 145
TOTAL LIABILITIES 33,558 34,448 STOCKHOLDERS' EQUITY 8,280 5,559 $ 41,838 $ 40,007 JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA) THREE MONTHS ENDED NINE MONTHS ENDED
05/26/07 05/27/06 05/26/07 05/27/06
REVENUE:
NET SALES $31,012 $33,071 $92,897 $97,105
REVENUE FROM SERVICE
CONTRACTS 2,258 2,425 6,543 7,065
33,270 35,496 99,440 104,170 COST OF SALES AND OTHER CHARGES 22,613 23,944 69,101 71,412 SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 8,950 9,146 27,905 28,723 DEPRECIATION AND AMORTIZATION 237 223 690 617
31,800 33,313 97,696 100,752 INCOME FROM OPERATIONS 1,470 2,183 1,744 3,418 INTEREST INCOME 188 109 541 264 INTEREST EXPENSE (4) (22) (11) (22) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,654 2,270 2,274 3,660 INCOME TAXES 45 14 44 105 INCOME FROM CONTINUING OPERATIONS 1,609 2,256 2,230 3,555 (LOSS) INCOME FROM DISCONTINUED
OPERATIONS (including income on
store closings of $182 for the
thirty-nine weeks ended in 2006) - (11) - 91 NET INCOME $1,609 $2,245 $2,230 $3,646 BASIC INCOME (LOSS) PER COMMON
SHARE: INCOME FROM CONTINUING OPERATIONS $0.20 $0.31 $0.28 $0.49
(LOSS) INCOME FROM DISCONTINUED
OPERATIONS - - - 0.01
NET INCOME $0.20 $0.31 $0.28 $0.50 DILUTED INCOME (LOSS) PER COMMON
SHARE: INCOME FROM CONTINUING
OPERATIONS $0.18 $0.26 $0.25 $0.45
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS - - - .01
NET INCOME $0.18 $0.26 $0.25 $0.46 WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 6,925,320 5,933,705 6,856,009 5,851,919 COMMON SHARES ISSUABLE ON
CONVERSION OF OUTSTANDING
SERIES A PARTICIPATING
PREFERRED STOCK 924,500 1,396,722 924,500 1,415,309 TOTAL WEIGHTED AVERAGE COMMON
SHARES BASIC 7,849,820 7,330,427 7,780,509 7,267,228 EFFECT OF POTENTIAL COMMON
SHARE ISSUANCE:
STOCK OPTIONS 604,768 1,115,264 837,917 615,877
WARRANTS 73,3848 82,543 83,352 63,693
SERIES B CONVERTIBLE
PREFERRED STOCK - 62,216 - 56,379 WEIGHTED AVERAGE COMMON SHARES
DILUTED 8,527,972 8,590,450 8,701,778 8,003,177
DATASOURCE: Jennifer Convertibles, Inc.
CONTACT: Donald Radcliffe of Radcliffe & Associates, +1-212-605-0201, for Jennifer Convertibles, Inc. |