MCLEAN, Va., Jan. 31 /PRNewswire-FirstCall/ -- The Rowe Companies (AMEX:ROW), a leading furniture manufacturer and home furnishings retailer, today reported operating results for its fourth fiscal quarter and fiscal year ended November 27, 2005.
Net shipments for the quarter increased 1.9% to $74.5 million, compared to $73.1 million for the comparable prior year period. Gross profit declined to 31.7% of net shipments, compared to 34.4% of net shipments for the fourth quarter of 2004, as manufacturing productivity continued below historical levels and the Company experienced price increases in a number of raw materials. Selling and administrative expenses for the quarter were $28.5 million, compared to $25.7 million in the prior year quarter, principally due to higher retail selling expenses associated with increased sales volume and higher store occupancy expense from the addition of ten net Storehouse locations opened since August 2004. Interest and other income, net, increased from net expense of $275,000 in 2004 to $919,000 in 2005, due to higher interest rates on higher outstanding loan balances and reduced rental income in 2005. Net loss from continuing operations was $(2.7) million or $(0.21) per share, compared to a net loss in the prior year period of $(522,000) or $(0.04) per share. Net loss for the quarter was $(2.7) million or $(0.21) per share, compared to a net loss of $(401,000) or $(0.03) per share in the same period of the prior year.
For the fiscal year ended November 27, 2005, net shipments were $299.4 million, an increase of $4.2 million or 1.4% from the prior year amount of $295.2 million. Gross profit declined to 31.4% of net shipments, from 35.1% for the 2004 comparable period, as a result of reduced manufacturing productivity, higher raw material costs and unfavorable transportation costs. Selling and administrative expenses increased from $100.4 million in 2004 to $109.1 million in 2005, due to higher expenses in the retail segment including selling and store occupancy costs associated with higher sales volume and eight net new stores opened in 2005. Interest and other income, net, increased slightly from net expense of $1,873,000 in 2004 to $1,888,000 in 2005. Net loss from continuing operations declined to $(9.8) million, or $(0.74) per diluted share, in 2005 compared to net earnings of $816,000, or $0.06 per diluted share in 2004.
Net loss, including gains on the sale of investment property recorded in the first and third quarters, was $(5.3) million or $(0.40) per diluted share in 2005 compared to net earnings of $890,000, or $0.07 per diluted share in 2004.
"We have taken steps intended to improve our manufacturing operation's results, including the reassignment of staff and the hiring of outside experts to assist us in making the necessary changes," stated Gerald M. Birnbach, Chairman and President. "We plan to cut costs through an overall reduction in staff and through other initiatives currently under consideration. We also want to thank GE Commercial Finance for their support in completing our debt restructuring." 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 Storehouse, Inc., a multi-channel, lifestyle home furnishings business including 69 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.
The Rowe Companies will hold a conference call which will be webcast at http://www.therowecompanies.com/ to discuss fourth quarter results on February 2, 2006 at 2:00 p.m.
Statements in this press release concerning Rowe's business outlook or future economic performance, anticipated profitability, revenues, 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 stated in such statements. Such risks, uncertainties and factors include, but are not limited to, industry cyclicality, fluctuations in customer demand and order patterns, 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.
(table follows) THE ROWE COMPANIES AND WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED NOVEMBER 27, 2005 AND
NOVEMBER 28, 2004
UNAUDITED Three Months Ended Twelve Months Ended
November November November November
27, 28, 27, 28,
2005 2004 2005 2004
(in thousands, except per share amounts) Net shipments $74,499 $73,071 $299,391 $295,203
Cost of shipments 50,911 47,899 205,447 191,644
Gross profit 23,588 25,172 93,944 103,559
Selling and administrative
expenses 28,536 25,692 109,134 100,376
Operating income (loss) (4,948) (520) (15,190) 3,183
Interest expense (804) (427) (2,895) (2,611)
Other income, net (115) 152 1,007 738
Earnings (loss) from
continuing operations
before taxes (5,867) (795) (17,078) 1,310
Tax expense (benefit) (3,128) (273) (7,281) 494 Net earnings (loss) from
continuing operations (2,739) (522) (9,797) 816 Discontinued operations:
Loss on contingencies
associated with operations
discontinued in prior years,
net of tax benefit of $65 - - - (105)
Earnings from discontinued real
estate operations, net of tax
expense of $0, $75, $43 and
$112, respectively - 121 69 179
Gain on disposals of real
estate investment properties,
net of tax expense of $2,769 - - 4,423 - Net earnings (loss) $(2,739) $(401) $(5,305) $890 Net earnings (loss) from
continuing operations per
common share $(0.21) $(0.04) $(0.74) $0.06 Net earnings (loss) per common
share $(0.21) $(0.03) $(0.40) $0.07 Weighted average common
shares 13,293 13,228 13,288 13,198 Net earnings (loss) from
continuing operations per
common share assuming
dilution $(0.21) $(0.04) $(0.74) $0.06 Net earnings (loss) per common
share assuming dilution $(0.21) $(0.03) $(0.40) $0.07 Weighted average common
shares and equivalents 13,293 13,228 13,288 13,546
First Call Analyst: DATASOURCE: The Rowe Companies CONTACT: Deborah C. Jacks, Secretary, of The Rowe Companies, +1-540-444-5032 Web site: http://www.therowecompanies.com/
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