Shermag Reports 29.2 Percent 4Q Sales Decline

June 14, 2007  by in UnCategorized   

By Home Furnishings Business in Case Goods on June 2007 Shermag, Sherbrooke, Quebec, said softness in the U.S. furniture market and the weakening U.S. dollar contributed to a 29.2 percent drop in net revenue during the company’s fourth quarter. The company, which reports its results in Canadian dollars, posted a loss of $4.1 million for the quarter.

For the company’s fiscal year, net revenue declined 17.4 percent to $155.9 million, with a net loss of $17.6 million. A year earlier, the company had a net loss of $30.6 million due, in part, to plant closings and other restructuring costs. Over the past year, the company has announced plans to close two factories and consolidate others as it shifts more sourcing to Asia.

“Shermag ends the year with much progress, including 36 percent of the company’s revenue being produced outside of Canada,” said President and CEO Jeff Casselman. “During the past two years, our workforce has been reduced by half and there has been significant consolidation in company facilities.”

The company currently has 1,200 workers and nine factories, down from 16 two years ago.

“Notwithstanding these measures, further consolidation will likely be required. The current conditions of market and currency mean that we must further reduce our expense base to bring costs in line with revenues. Shermag’s Asian production will continue to increase,” Casselman said.