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Natuzzi Reports Big First Quarter Sales Increase For Italsofa Brand

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the Board of Directors of Natuzzi S.p.A. (NYSE:NTZ) announced the first quarter 2010 financial results.

Total Net Sales for the first quarter 2010 were €126.4 million with an improvement of 13.6%. Upholstery Net Sales were €111.3 million with an increase of 14.9% compared to the same period of 2009. The contribution by Geographic area was the following: Europe (excluding Italy) 42.4%, Americas 32.3%, Italy 14.1% and Rest of the World 11.2%.

The significant improvement of the Industrial Margin is fundamentally due to a better product-mix sold, and to a constant cost control activity, as well as to a positive euro/dollars exchange rate that affected positively the cost of raw material purchases.

Transportation costs were negatively influenced by a significant increase of the freight fares recorded in some transportation routes since January 2010. All the other SG&A costs slightly improved as compared to the first quarter of 2009.

As a result of these figures, the Company highlights an Operating Income of €0.5 million versus an Operating Loss of €16.6 million in the first quarter of 2009 with a remarkable improvement with respect to the same period of the previous year.

Net Group Result shows a reduced loss of €1.3 million, with respect to a loss of €10.4 million recorded in the same period of 2009, mainly due to some improving actions obtained at a production efficiency level.

Net Financial Position as of March 31, 2010 remains strongly positive for €54.9 million notwithstanding the decrease compared to December 31, 2009.

Pasquale Natuzzi, Chairman and Chief Executive Officer of Natuzzi SpA., commented: "In the first quarter of 2010 we finally recorded a net sales improvement. However, the economic crisis and the worsening market conditions are not yet over and the Group order flows for the first months of 2010 with respect to the last months of 2009 confirm a slow down as compared to the previous positive trend, even if with diversified trends among the various brands and geographic areas. We promptly reacted, from a price point of view, introducing in the Natuzzi Brand new "entry price" products that could stimulate consumer demand coherently with the brand positioning. The Italsofa and Editions brands are confirming the success achieved during the Koln, Milan and High Point fairs and the enormous potential of this new offer .

Along with these commercial initiatives, we have in progress an internal restructuring plan that aims at simplifying the management of company activities, at achieving further cost reductions and innovation in order to improve the quality of products and customer service.

We are confident that the strength of our brands and business model, based on integration between production and distribution, could help us face the adverse market situation. Furthermore, thanks to the perseverance, enthusiasm, ethic values, and commitment of all people working within our Group, we will be able to achieve our goals in terms of service, quality, competitiveness and profitability".

About Natuzzi

Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and manufactures a broad collection of residential upholstered furniture. With consolidated revenues of EUR 515.4 million in 2009, Natuzzi is Italy's largest furniture manufacturer. Natuzzi Group exports its innovative high-quality sofas and armchairs to 130 markets on five continents under two brands, Natuzzi and Italsofa. Cutting-edge design, superior Italian craftsmanship and advanced, vertically integrated manufacturing operations underpin the Company's market leadership. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001 certified.

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