Chromcraft Revington Q3 Sales up 3.4%, Trims LossNovember 15, 2012
Chromcraft Revington, West Lafayette, Ind., lost $717,000 in the period ended Sept. 29, 31.2 percent less than the prior-year period's loss.
Through nine months of 2012, sales of $41.7 million were 5.6 percent higher than the first three quarters of 2011. Year-to-date net loss was $3.4 million, 16.2 percent lower than at the same point last year.
The reduced third-quarter net loss was primarily due to an income tax benefit of $0.2 million resulting from the final allocation of the purchase price of Executive Office Concepts Inc.; and to a lesser extent, an increase in gross margin resulting from higher sales. The reduced net loss for the first nine months of 2012 compared with the prior year period is primarily due to the gross margin contributed by EOC products, lower import sourcing expense and the income tax benefit from the final allocation of the EOC purchase price.
The increase in sales for the third quarter of 2012 as compared with the prior year period was primarily due to increased shipments of commercial furniture, in particular office suites and waiting-area furniture resulting from Chromcraft's acquisition of EOC. Residential shipments for the third quarter of 2012 were comparable to the third quarter of 2011, resulting from an increase in sales of home entertainment furniture offset by lower sales of dining room furniture. Residential furniture sales were lower in the third quarter of 2012 compared to the second quarter of 2012, primarily due to lower sales of dining room furniture.
The company continues to face the challenges resulting from weak consumer demand for residential furniture in its product categories and price segment, and ongoing labor-market struggles and reduced consumer access to credit. These factors led to a slight decrease in residential orders in the third quarter of 2012 compared to the second quarter of 2012. Commercial product orders increased in the third quarter of 2012 resulting in our highest quarterly orders since the third quarter of 2011.
“Despite the continuing low consumer confidence in the economy and the very difficult retail operating environment, we increased sales in the third quarter of 2012 as compared to the prior year period, largely due to increased sales of our commercial furniture products to the health care industry, primarily through our purchase of EOC," said Chromcraft Chairman and CEO Ronald H. Butler. "The ongoing difficult operating environment in the residential furniture market will continue to be challenging into the first quarter of 2013. We believe the recent signs of marginal improvement in the housing market are tempered by the uncertainty over the outcome of the upcoming federal 'fiscal cliff' at the end of 2012 and its impact on consumer spending.