The Rowe Companies Announces Fourth Quarter Outlook
MCLEAN, Va., Dec. 9 /PRNewswire-FirstCall/ -- The Rowe Companies (AMEX:ROW), a
leading furniture manufacturer and home furnishings retailer, reported that,
during the implementation of its new Enterprise Resource Planning ("ERP")
system in its Rowe Furniture manufacturing unit, unforeseen problems with
production scheduling were encountered, reducing units produced and shipped.
Thus, net shipments for its fourth quarter ended Nov. 28, 2004 will be lower
than the prior year at approximately $71-$74 million, compared to $74.5 million
in the prior year, which will also result in lower earnings than the prior year
quarter.
"The level of incoming orders received at Rowe Furniture has resulted in a
backlog at the end of November that is approximately $6 million higher than at
the same time last year. Unfortunately, part of the higher backlog is directly
attributable to the disruptions in our production scheduling and the resulting
reduction in units produced and shipped," Mr. Gerald M. Birnbach, Chairman and
President, stated. "Management at every level in the Rowe Furniture division
is intensely focused on resolving these technical issues." "Our new ERP system is an integral part of our long-term plan to improve worker
productivity and provide the company with substantial new capabilities,
including the ability to produce and deliver our merchandise even faster. While
temporary disruptions such as our production scheduling problem are not
uncommon when implementing leading edge technology, we may encounter additional
issues that may delay a return to higher productivity," Mr. Birnbach continued. "In the meantime, we are making every effort to insure that our customers are
not significantly impacted by our reduced production schedules and we are
communicating with them regularly to assure that their needs are adequately
met." "In addition, we are pleased that our Storehouse subsidiary continued its
strong turnaround performance this year with record revenue in the fourth
quarter and for the full year," Mr. Birnbach said.
The Rowe Companies anticipates releasing earnings for the fourth quarter and
full year in late January. The release will be followed by a conference call.
The Rowe Companies operates two subsidiaries in the home furnishings industry:
Rowe Furniture, Inc., a major manufacturer of quality upholstered furniture
serving the middle and upper middle market throughout the U.S. and
internationally; and Storehouse, Inc., a multi-channel, lifestyle home
furnishings business including 60 retail home furnishings stores. Storehouse
makes good design accessible by selling an edited assortment of casual,
contemporary home furnishings through its stores located in the Southeast,
Southwest and Mid-Atlantic markets, its catalog and over the internet.
Statements in this press release concerning Rowe's business outlook or future
economic performance, anticipated profitability, net shipments, expenses or
other financial items; together with other statements that are not historical
facts, are "forward-looking statements" as that term is defined under Federal
Securities Laws. "Forward-looking statements" are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from those anticipated in such statements. Such risks,
uncertainties and factors include, but are not limited to, industry
cyclicality, fluctuations in customer demand and order patterns, unanticipated
delays in the implementation of the new ERP system, the seasonal nature of the
business, changes in pricing, and general economic conditions, as well as other
risks detailed in Rowe's filings with the Securities and Exchange Commission.
CONTACT: Gene S. Morphis, Chief Financial Officer of The Rowe Companies,
+1-703-847-8670. DATASOURCE: The Rowe Companies CONTACT: Gene S. Morphis, Chief Financial Officer of The Rowe Companies, +1-703-847-8670 Web site: http://www.therowecompanies.com/
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