Chromcraft Revington’s 3Q Sales Down 20%

November 14, 2007  by in UnCategorized   

By Home Furnishings Business in on November 2007 Chromcraft Revington Inc., West Lafayette, Ind., reported sales for the three and nine months ended September 29 of $28.4 million and $95 million, respectively, representing respective decreases of 20 percent and 22 percent from the same periods last year.

The company reported a net loss of $2.1 million for the third quarter, and $6.6 million for the first nine months of 2007. That compares to prior-year numbers of a $4.5 million quarterly loss, and a $2.7 million nine-month loss.

Residential furniture shipments in 2007 were lower due to a weak retail environment, competitive pressure from imports and the impact of restructuring the company. Commercial furniture sales were higher for the third quarter and first nine months of 2007 compared to 2006 primarily due to an increase in seating product shipments.

The third-quarter 2007 loss was primarily due to the lower sales volume, an unfavorable product sales mix, price discounting, a non-cash charge for inventory write-downs, severance and other business transition related costs. In addition, the lower sales volume resulted in a reduced domestic production level, which unfavorably impacted fixed cost absorption and manufacturing operations.

The company recorded a non-cash charge for inventory write-downs of $.7 million pre-tax to reflect anticipated net realizable value on disposition in the third quarter. Nine-month results include a non-cash pre-tax charges for inventory write-downs of $3.1 million and for asset impairments of $1.1 million.

As previously reported, the Chromcraft Revington is transforming its business model, which it anticipates will allow it to be more competitive in the global furniture industry. The company continues to reduce its reliance on U.S. manufacturing by shifting its business toward use of the global supply chain, progressively outsourcing existing furniture lines and developing new products based on an outsourced model. The company also is consolidating and transitioning its U.S.-based operations to built-to-order customization and distribution activities. At the same time, the Company is changing its organization from autonomous operating divisions to a unified functional organization and transforming its management structure and staffing to support the new business model.

In 2007, the Company consolidated its residential sales, product development and marketing functions, combined its product showrooms and launched new products under a CR Home banner using extensive consumer research. Supply chain, operations and other administrative areas are also transitioning to a centralized management structure.

Chromcraft Revington sells its residential furniture products under the CR Home banner with the Chromcraft, Peters-Revington, Silver Furniture, Cochrane Furniture and Sumter brand names. It sells commercial furniture under the Chromcraft brand name.