Chromecraft Announces Warrenton, NC Plant Closure

Furniture World Magazine

Chromcraft Revington, Inc. announced that, its board of directors approved the closure of the Company’s wood processing facility in Warrenton, North Carolina by December 8, 2006. The Company plans to sell its 166,000 square foot facility in Warrenton, as well as related equipment, and lay off 58 associates at this site. The Company intends to source furniture parts produced at this facility from various suppliers. This action is consistent with the Company’s previously stated strategy of improving the utilization of a global supply chain to enhance customer selection and service, consolidating operations, reducing fixed costs and improving overall asset utilization. The Company expects to incur total restructuring costs and related asset impairment charges of $1.0 million to $1.5 million pretax to write-down its building, equipment and inventories and to record severance benefits to terminated associates and relocation costs relating to this plant closure. Most of these charges will be recorded in the fourth quarter of 2006. A portion of these charges and expenses are expected to result in cash expenditures of approximately $0.1 million. These cash expenditures do not include expected cash proceeds from the sale of the facility and equipment and the reduction of inventories ranging from $2.0 million to $2.5 million. General, administrative and relocation costs associated with the wind down of these operations will be expensed as incurred. The restructuring charges associated with the asset impairment of the building and equipment are expected to range from $0.8 million to $1.2 million pretax. In connection with the restructuring, an inventory write-down of approximately $0.1 million to $0.2 million pretax is expected to be recognized to reflect the anticipated net realizable value of certain inventories. In addition, severance for terminated associates and relocation costs are expected to total approximately $0.1 million. As the Company continues to adapt to the global furniture marketplace and integrate functions common to its various products, additional restructuring charges, asset impairments, transition costs and/or increased operating expenses may be necessary in the future. Chromcraft Revington businesses design, manufacture and market residential and commercial furniture throughout the United States. The Company wholesales its products under the “Chromcraft,” “Peters-Revington,” “Silver Furniture,” “Cochrane Furniture” and “Sumter ” brand names.