Jennifer Convertibles Reports Revenue Decrease For Quarter

Furniture World Magazine

Jennifer Convertibles Reports Second Quarter Results - Revenue from continuing operations decreased 15.3% for quarter, 4.5% year-to-date - Comparable store sales decreased by 24.4% for quarter, 13.7% year-to-date - (Loss) income from continuing operations ($1,160,000) versus $1,237,000 for quarter, ($1,733,000) versus $523,000 year-to-date - Basic EPS ($0.18) versus $0.16 for quarter, ($0.25) versus $0.08 year-to-date - Diluted EPS ($0.18) versus $0.14 for quarter, ($0.25) versus $0.07 year-to-date - Ashley Segment produces $318,000 profit during quarter Jennifer Convertibles, Inc. announced its unaudited financial results for the second fiscal quarter ended February 23, 2008. For the second quarter, revenue from continuing operations decreased by 15.3% to $27.9 million from the $33.0 million reported for the same period last year. For the six-month period, revenue from continuing operations decreased 4.5% to $62.2 million from the $65.1 reported in the same period last year. For the second quarter, the Company had a net loss of ($1,246,000) or ($0.18) per basic and diluted share, compared to net income of $1,258,000 or $0.16 and $0.14 per basic and diluted share, respectively, for the same period last year. For the six-month period, the net loss was ($1,751,000) or ($0.25) per basic and diluted share, compared to net income of $621,000 or $0.08 and $0.07 per basic and diluted share, respectively, for the same period last year. Operating margins from continuing operations decreased during the current three-month period to 27.4% compared to 29.8% the same period last year. For the current six-month period operating margins from continuing operations decreased to 28.8% compared to 29.8% for the six-month period last year. For the second quarter, selling, general, and administrative expenses from continuing operations increased to 31.3% as a percentage of revenue from continuing operations compared to 26.0% for the same period last year. For the six-month period, selling, general and administrative expenses from continuing operations increased to 31.3% compared to 28.9% for the same period last year. During the second quarter, Jennifer closed three stores in Ohio and one store in Georgia compared to four store closings in Illinois the same period last year. The operating results of the closed store in Georgia and the four stores in Illinois were recorded in continuing operations based on management's judgment that there will be significant continuing sales to customers of the closed stores from other stores in the respective areas. The operating results of the three closed stores in Ohio were reported as discontinued operations. (Loss) income from operations of discontinued operations was ($86,000) and $21,000 in the second quarter of fiscal 2008 and 2007, respectively. For the six month periods for fiscal 2008 and 2007, (loss) income from discontinued operations amounted to ($18,000) and $98,000, respectively. During the quarter, the Company did not open any stores, relocated one store and closed four stores as described above. Commenting on the results, Harley J. Greenfield, Chief Executive Officer of Jennifer said, "During the quarter, our first Ashley Furniture HomeStore continued its growth in revenue and increased profitability to $318,000 from the $146,000 achieved in the previous quarter. We are extremely excited about the prospects of the Ashley segment and expect to continue to grow substantially with the addition of our second store early next month." Mr. Greenfield added, "Our second fiscal quarter is seasonally our weakest quarter. In addition, the revenues in our Jennifer stores continue to be impacted by the overall weakness in the furniture industry. We are continuing to monitor costs and adjust our merchandising and advertising strategies." Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 161 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 15 Jennifer Leather stores. As of April 8, 2008, the Company owned 154 stores and licensed 22 stores (including 21 owned and operated by a related company on a royalty free basis) and operates one licensed Ashley Furniture HomeStore.