Amisco Reports 16% Sales Decline

Furniture World Magazine

Amisco Industries Ltd.'s net sales fell to $9.1 million during the quarter ended September 2, 2006, down 19.5% from $11.3 million in the third quarter of 2005. The Company's sales and profit margins were affected by a decline in the average exchange rate and Asian competition. Amisco therefore incurred a net loss of $106,266, whereas it had posted net earnings of $646,246 in the third quarter the previous year. The Company recorded net sales of $27.2 million for the nine-month period ended September 2, 2006, compared with $32.2 million in the corresponding period a year earlier. It posted a net loss of $162,641, as opposed to net earnings of $1.5 million during the first nine months of 2005. Canadian sales slipped from $3.6 million in the third quarter of 2005 to $3.1 million in the third quarter of 2006 as a result of a reduction in orders from a few large-sized customers. Sales in the United States decreased from $7.7 million to $6.0 million respectively, due primarily to the decline in the U.S. dollar/Canadian dollar conversion rate. In fact, in US dollars, such sales were down by only $203,000. Sales in the United States were reported at an average conversion rate of 1.2464, compared with a rate of 1.5521 in the third quarter of 2005. All in all, U.S. sales declined by 21.7%, whereas the U.S. dollar/Canadian dollar conversion rate fell 19.7%. The Company recorded a gross profit of $1.6 million, versus $2.9 million in the third quarter of 2005, corresponding to gross profit margins of 17.5% and 25.6% respectively. Thanks notably to tight control over operating costs, selling and administrative expenses were reduced by 19.0% and 7.9% respectively. Amisco posted a net loss of $106,266 or $0.03 per share, as opposed to net earnings of $646,246 or $0.16 per share in the third quarter the previous year. Nine-Month Period Ended September 2, 2006 Net sales fell 15.5% to $27.2 million for the first nine months of the current fiscal year, down from $32.2 million for the same period in 2005. Canadian sales totalled $9.2 million and $10.7 million for the first nine months of fiscal 2006 and 2005 respectively. Sales in the United States amounted to $18.0 million and $21.5 million for the same periods. All in all, sales decreased by 14.2% in Canada, versus 16.2% south of the border. An exchange rate of 1.2613 was applied to U.S. sales during the first three quarters of the current fiscal year, compared with 1.5253 for the same period the previous year. It should be pointed out that sales in the United States declined by only US$29,041. The Company achieved a gross profit of $5.5 million for the nine-month period ended September 2, 2006, compared with $8.3 million in the same period a year earlier, for gross profit margins of 20.1% and 25.7% respectively. Selling and administrative expenses declined by 16.9% and 4.6% respectively. Amisco recorded a net loss of $162,641 $ or $0.04 per share, as opposed to net earnings of $1.5 million or $0.36 per share for the first nine months of fiscal 2005. Financial Position Amisco posted a solid financial position as at September 2, 2006. Total assets amounted to $21.0 million, versus $23.3 million as at November 30, 2005. The Company's current ratio stood at 2.15:1, whereas its balance sheet was long-term debt free. Finally, shareholders' equity totalled $16.0 million, equivalent to $3.92 per share. Amisco Industries Ltd. is a North American leader in the design and manufacture of composite painted tubular and steel sheet residential furniture. Founded in 1954, the Company manufactures beds, tables, chairs and stools. Each of its products can be personalized - finishes, colours, fabrics and dimensions. Recognized for its innovative design and good quality/price value, Amisco furniture is available throughout North America. Amisco records about 65% of its sales in the United States.