Chromcraft Revington, Inc. Reports First Quarter Sales Increase of 2.8%

Furniture World News

Chromcraft Revington, Inc. reported sales of $45,921,000 and net earnings of $1,129,000 for the three months ended April 1, 2006. Sales for the current quarter of $45,921,000 represented a 2.8% increase from $44,659,000 reported for the first quarter last year. Shipments of occasional, dining room and upholstered furniture were higher as compared to the prior year period. The sales increase in these product categories for 2006 was partially offset by lower shipments of bedroom and commercial furniture. Shipments of domestically produced furniture for the three months ended April 1, 2006 were lower as compared to the prior year period. Net earnings for the first quarter of 2006 were $1,129,000, or $.25 per share on a diluted basis. This compares to net earnings of $2,256,000, or $.53 per share on a diluted basis, for the same period last year. First quarter earnings were primarily affected by a reduced domestic production level, which affected fixed cost absorption and manufacturing efficiencies, an unfavorable sales mix and higher manufacturing and selling related costs. The Company's balance sheet at quarter end showed continued strengthening with available cash and no bank indebtedness. Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No.123(R) "Share-Based Payment." The adoption of the new accounting standard did not have a material impact on the Company's results of operations for the three months ended April 1, 2006. Commenting on first quarter results, Benjamin M. Anderson-Ray, Chairman and Chief Executive Officer, said that the Company continues to implement its hybrid strategy of U.S. furniture manufacturing combined with sourcing furniture components and finished goods. He said that shipments of domestically produced built-to-order products and imported finished goods grew significantly while shipments of other domestically produced furniture decreased in the first quarter as compared to the prior year. He commented that this reflects the Company's strategic transition towards an improved utilization of a global supply chain combined with the shift to value-added customized furniture. He indicated that the Company is continuing to shift its product development and marketing to a more market-based focus on the needs of consumers and customers. Mr. Anderson-Ray pointed out that this business model will involve a significant expansion of global sourcing activities, as well as a conversion of U.S. operations toward increased use of demand flow and mass customization techniques. Looking forward, he said that first quarter orders were slightly below the prior year period and that sales order backlog entering the second quarter was below the year ago level due, in part, to improved service levels. Mr. Anderson-Ray also commented on the just concluded High Point Furniture Market stating, "At the April Furniture Show, more new furniture collections and programs were launched then ever achieved in the Company's history. Our Peters-Revington brand launched an entirely new consumer lifestyle based program with thirteen occasional furniture groups many of which include entertainment and modular wall units. The Chromcraft brand introduced fifteen new casual dining furniture groups, expansion of its built-to-order Colorcraft program and a new entry price point semi-custom program called Colormates. Our Cochrane brand successfully introduced a new concept of an integrated multi-category built-to-order program with dining room, living room and bedroom furniture groups in styles ranging from casual traditional to urban impressions. Our Sumter brand introduced five new solid wood bedroom and dining room furniture groups. And finally, our Silver brand launched ten new occasional table groups, nine new media furniture credenzas and two new leather upholstered furniture groups. Overall, we were very pleased with the market reaction to these introductions." Chromcraft Revington businesses design, manufacture and market residential and commercial furniture throughout the United States. The Company wholesales its products under "Chromcraft," "Peters-Revington," "Silver Furniture," "Cochrane Furniture" and "Sumter" brand names.