Bush Industries Provides Fourth Quarter Earnings Guidance

Furniture World Magazine

Bush Industries (NYSE:BSH), a diversified global furniture manufacturer and leading supplier of surface technologies, provided sales and earnings guidance for the fourth quarter of 2001. Net sales for the fourth quarter ended December 31, 2001 are expected to be $83 million, which is in line with current analyst estimates. This compares with net sales of $118 million for the fourth quarter of 2000. The Company announced that it expects to report a net loss for the fourth quarter in a range of $0.37 to $0.42 per share, due to several recent actions taken. Given the prevailing softness in the retail market, the Company will take a non-cash inventory writedown of approximately $2.7 million, net of tax, or $0.19 per share, in order to expedite the sale of some slower moving product. Excluding the inventory write-off, the company expects its fourth quarter net loss to be in the range of $0.13 to $0.18 per share, reflecting its decision to further reduce production in the quarter to support the continuing reduction in finished goods inventory levels. The unanticipated fourth quarter loss will impact income taxes in the quarter by an additional $0.05 per share. Based on this revised fourth quarter forecast, Bush anticipates the full year 2001 to be slightly profitable. Paul Bush, Chairman and Chief Executive Officer of Bush Industries said, "Our strategy of finished goods reduction is achievable because of our previous capital investments that allow us to effectively operate with lower production lot sizes, without impacting our production costs or our best-in-class service that we provide to our customers. In the fourth quarter we anticipate this reduction to be in the $5 million to $7 million range, excluding the non-cash inventory writedown. I'm confident that our strategy of reducing inventories will accelerate and continue into 2002," Mr. Bush stated. Mr. Bush continued, "We expect to use the cash generated from our lower working capital needs, as well as substantially lower capital expenditures, to reduce our debt in the quarter by $10 million to $15 million." He stated, "While we continue to face difficult industry conditions, we are starting to see some upward movement in our order patterns for furniture both in North America and Europe in the month of December. In Bush Technologies, although we are seeing an upward trend in orders of nearly 40% over the third quarter, technology sales are still short of our expectations due to delayed new program launches on the part of the cellular OEM's. However, stronger furniture sales will offset this in the fourth quarter." Mr. Bush concluded, "Although it is still early, based on recent order patterns, we anticipate that our bottom line results for the first quarter of 2002 will be positive. The overall aggressive product and marketing plans that are being implemented by each of our divisions increases our confidence level for an improved 2002." The Company plans to report its fourth quarter earnings in mid-February, 2002. Bush Industries (NYSE:BSH) is a diversified global manufacturer and leading supplier of surface technologies. The Company has four strategic divisions: Bush Business Furniture (BBF), which serves commercial offices and is responsible for all sales to office superstores; Bush Furniture, which focuses on home entertainment, home office and home furnishing products; Bush Furniture Europe, which sells commercial, home office and other furnishings in the European market; and Bush Technologies, which provides furnishing, design and decorating services in diverse applications such as automotive, consumer electronics and cosmetics. Bush operates several manufacturing and warehouse facilities throughout North America and in Germany.