Chromcraft Revington, Inc. reported improved third quarter 2009 operating results. The net loss for the current quarter was reduced by over 90% from the same period in 2008 and over 60% as compared to the second quarter of 2009. The Company’s net loss for the current quarter was $979,000 as compared to a net loss of $10,167,000 for the third quarter of 2008 and a net loss of $2,464,000 for the second quarter of 2009. Included in the third quarter 2008 results were restructuring and asset impairment charges totaling $6.6 million.
Operating losses have been reduced for three consecutive quarters in 2009. The net loss for the nine months ended October 3, 2009 was 64% lower at $6.6 million as compared to a net loss of $18.5 million for the same period last year. Results for 2008 include total restructuring and asset impairment charges of $8.6 million.
The Company’s third quarter sales were $16.0 million, which were up 10% from the second quarter of 2009, but down 31% from the third quarter of 2008. For the first nine months of 2009, sales were $47.3 million, a decrease of 38% compared to the prior year period due to the discontinuation of certain high end, low demand products, and the effects of the current economic recession.
For the nine-month period ended October 3, 2009, cash flow provided by operating activities was approximately $2.0 million, which compares to $11.3 million of cash used in the prior year period. Reduced working capital requirements and a reduction in slow moving and unprofitable products have improved the Company’s cash and liquidity position. Inventory reductions provided $6.8 million in cash in the first nine months of 2009. At October 3, 2009, the Company had cash of $3.2 million and no bank borrowings.
Weak consumer confidence and housing activity, and the effects of the economic recession continue to depress demand for furniture. Additionally, sales were lower in 2009 due to the discontinuation of certain low margin products and the globalization of the furniture industry.
The Company also announced the anticipated positive effect of recently-enacted federal law that significantly expands the five-year Net Operating Loss (NOL) carryback opportunity enacted earlier this year as part of the Federal stimulus bill. The new law expands the NOL carryback period from two years to five years for U.S. companies. As a result, the Company expects to receive a significant refund in 2010 of previously paid federal income taxes based on the amount of such taxes paid for the 2003 and 2004 tax years.
Commenting on these results, Ronald H. Butler, Chairman and Chief Executive Officer, said that the restructuring and cost containment actions implemented over the last year have made a significant positive impact on third quarter results and have helped reduce the effects of the economic downturn. He added, “As we look to 2010, we assume the economic environment for consumers will continue to be challenging. We’ll continue the process of repositioning our product line focusing on products with broader appeal from our global sourcing network including our new entity, CR International, and from our customizable casual dining and contract furniture facility in Mississippi. When the furniture market improves, we believe the Company is well positioned to return to profitability.”
Chromcraft Revington™ businesses design residential and commercial furniture marketed throughout North America. The Company wholesales its residential furniture products under Chromcraft™, Cochrane™, and Peters-Revington™, as primary brand names. It sells commercial furniture under the Chromcraft™ brand name. The Company sources furniture from overseas, with domestic contract specialty facilities, and operates one U.S. manufacturing facility for its commercial furniture and motion based casual dining furniture in Mississippi.