The Rowe Companies Announces First Quarter Operating Results
March 16 2004 - 7:57PM
PR Newswire (US)
The Rowe Companies Announces First Quarter Operating Results
MCLEAN, Va., March 16 /PRNewswire-FirstCall/ -- The Rowe Companies
, a leading furniture manufacturer and home furnishings retailer,
today reported operating results for the first quarter ended
February 29, 2004. Led by a 24% sales increase in its Storehouse
retail unit, net earnings from continuing operations for the first
quarter totaled $149,000 or $0.01 per diluted share, compared to a
loss in the prior year first quarter of $(813,000), or $(0.06) per
diluted share. Net shipments increased 11% to $70.7 million,
compared with $63.7 million for the same period last year. Gross
profit increased to 35.5% of net shipments compared with 35.1% of
net shipments for the same period last year as retail margins
improved. As previously announced, included in cost of shipments
was an after-tax non-cash charge of $(451,000) or $(0.03) per share
to depreciate certain legacy systems that will be removed from
service this year as the Company'snew ERP system is implemented.
Sales and administrative costs for the quarter were $24.2 million
compared to $22.7 million in the prior year quarter, principally
due to higher retail selling expense associated with higher volume
and increased store occupancy expense. During the quarter the
Company recorded an increase in workers' compensation expense for a
prior year of $(218,000) after tax, a portion of which was
attributable to business units that have subsequently been sold,
but for which the Company retained the workers' compensation
liability. Accordingly, $(105,000) after tax, or $(0.01) per share
was attributed to discontinued operations. Net earnings for first
quarter of 2003 including discontinued operations were $44,000 or
$0.00 per share, compared to $2,000 or $0.00 per share in 2003. Net
earnings for the prior year included the results of the Mitchell
Gold Co., which was sold in April 2003. "We are pleased with the
continuing improvement in our operating results," said Gerald M.
Birnbach, Chairman and President. "Our Storehouse retail business
continues to show strong sales growth, with an 18.8% same store
sales increase for the third consecutive quarter of double digit
same store sales gains. Total sales gained 23.9% for the quarter.
Our Rowe Furniture shipments increased 1% in this quarter, despite
two less production days in its operating calendar compared to last
year." In addition to the non-cash charge in the first quarter
resulting from the accelerated depreciation of certain legacy
systems, there will be an additional non-cash charge of $(148,000)
after tax or $(0.01) per share for the second quarter of fiscal
2004. 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 61 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 and its catalog. 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. THE ROWE COMPANIES AND WHOLLY-OWNED
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED FEBRUARY 29, 2004 AND MARCH 2, 2003 UNAUDITED Three
Months Ended February 29, March 2, 2004 2003 (in thousands - except
per share amounts) Net shipments $70,746 $63,719 Cost of shipments
45,644 41,376 Gross profit 25,102 22,343 Selling and administrative
expenses 24,224 22,684 Operating income (loss) 878 (341) Interest
expense (894) (1,336) Other income 347 395 Earnings (loss) from
continuing operations before taxes 331 (1,282) Tax expense
(benefit) 182 (469) Net earnings (loss) from continuing operations
149 (813) Earnings (loss) from discontinued operations, net of tax
expense (benefit) of $(65) and $499, respectively (105) 815 Net
earnings $44 $2 Net earnings (loss) from continuing operations per
common share $0.01 $(0.06) Net earnings per common share $0.00
$0.00 Weighted average common shares 13,176 13,165 Net earnings
(loss) from continuing operations per common share assuming
dilution $0.01 $(0.06) Net earnings per common share assuming
dilution $0.00 $0.00 Weighted average common shares and equivalents
13,476 13,212 THE ROWE COMPANIES AND WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 29, 2004 AND MARCH 2, 2003
UNAUDITED February 29, November 30, 2004 2003 (Unaudited) (Audited)
($ in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents
$1,360 $3,708 Restricted cash collateralizing letters of credit
3,674 3,674 Accounts receivable, net 20,920 19,889 Notes receivable
100 100 Inventories 33,105 32,387 Deferred income tax asset 869 880
Prepaid expenses and other 3,543 2,711 Total current assets 63,571
63,349 PROPERTY AND EQUIPMENT, net 40,459 41,624 GOODWILL, net
14,224 14,224 OTHER NONCURRENT ASSETS 11,153 10,871 $129,407
$130,068 LIABILITIES CURRENT LIABILITIES Current maturities of
long-term debt $2,011 $3,314 Accounts payable and accrued
liabilities 20,437 21,683 Income taxes payable 1,065 1,061 Customer
deposits 12,896 13,512 Total current liabilities 36,409 39,570
LONG-TERM DEBT 36,721 34,312 DEFERRED LIABILITIES 4,257 4,269 Total
liabilities 77,387 78,151 Total stockholders' equity 52,020 51,917
$129,407 $130,068 DATASOURCE: The Rowe Companies CONTACT: Gene S.
Morphis, Chief Financial Officer of The Rowe Companies,
+1-703-847-8670 Web site: http://www.rowefurniture.com/
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