Chromcraft Revington, Inc. reported net earnings for the three months ended December 31, 2004 of $2,157,000, or $.51 per share on a diluted basis, as compared to $1,689,000, or $.41 per share on a diluted basis, for the same period last year. Sales for the fourth quarter decreased 8.9% to $41,630,000 from $45,680,000 in the year earlier quarter.
For the year ended December 31, 2004 net earnings were $7,668,000, or $1.82 per share on a diluted basis, as compared to $8,088,000, or $1.94 per share on a diluted basis, for the prior year. Sales for 2004 were $172,393,000, a 6.4% decrease from last year. Net earnings for 2003 included three previously reported non-recurring items: a $3,650,000 pre-tax non-cash gain from the resolution of a claim that existed as part of the Company's earlier acquisition of a subsidiary, $515,000 of additional income tax expense for a change in estimate of the tax basis of certain acquired assets and a $950,000 pre-tax inventory write down for slow moving bedroom furniture. The net effect of these items added $.28 to earnings per share, on a diluted basis, for the year ended December 31, 2003.
Commenting on fourth quarter results, Michael E. Thomas, Chairman, President and Chief Executive Officer said that the sales decrease from last year was the result of lower shipments of dining room, bedroom and occasional furniture partially offset by higher shipments of commercial and upholstered furniture. The sales decline was primarily due to foreign import competition. Thomas pointed out that earnings for the current quarter were higher compared to the fourth quarter of 2003 primarily due to cost reductions. He added that excess cash flow from operations in the fourth quarter was used to reduce bank indebtedness by $8,350,000. At December 31, 2004 bank indebtedness stood at $5,700,000. Looking ahead, Thomas said that sales orders lag behind last year's level and the Company's backlog entering the first quarter of 2005 was below the year ago level.
Chromcraft Revington designs, manufactures and sells residential and commercial furniture throughout the United States under the "Chromcraft," "Peters-Revington," "Silver Furniture," "Cochrane Furniture" and "Sumter Cabinet" brand names. The Company's strategy is to operate as a low-cost, high quality manufacturer and distributor of residential and commercial furniture. In recent years, the Company has increased imports of low-cost labor intensive furniture components and finished furniture from the Pacific Rim to supplement the Company's furniture manufacturing. Using this blended approach of domestic manufacturing and selective importing, the Company is better able to control the quality of furniture and service to its customers.
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