EXHIBIT 99.1
For Immediate Release For more information contact:
Wednesday, October 29, 2003 Frank T. Kane, Vice President & CFO
Chromcraft Revington, Inc.
Reports Higher Third Quarter Earnings
Delphi, Indiana, October 29, 2003 - Chromcraft Revington, Inc.
(NYSE:CRC) today reported higher net earnings for the third quarter of 2003 of
$2,619,000, or $.62 per share on a diluted basis, as compared to $2,228,000, or
$.53 per share on a diluted basis, for the prior year period. Sales for the
quarter decreased 9.5% to $44,951,000 from $49,676,000 in the third quarter of
2002.
For the nine months ended September 27, 2003 net earnings were
$6,399,000, or $1.53 per share on a diluted basis, as compared to earnings
before an accounting change of $7,726,000, or $1.37 per share on a diluted
basis, for the prior year period. Sales for the first nine months of 2003 of
$138,548,000 were 16.1% lower than the prior year period.
The number of weighted average shares outstanding used in the
calculation of diluted earnings per share was 4,190,000 for the first nine
months of 2003 compared to 5,655,000 for the year-earlier period. The lower
number of shares outstanding in 2003 was primarily due to the purchase of
5,695,418 shares of Company common stock by Chromcraft Revington and its
employee stock ownership plan that was completed on March 15, 2002.
Commenting on these results, Michael E. Thomas, Chairman, President and
Chief Executive Officer, said that the sales decline was mainly due to foreign
import competition and a weak economic environment. Thomas added that lower
shipments of dining room, bedroom, occasional and commercial furniture were
partially offset by slightly higher upholstered furniture shipments as compared
to third quarter last year. Thomas pointed out that third quarter operating
results included three non-recurring items: a $950,000 pre-tax inventory write
down for slow moving bedroom furniture, a $3,650,000 pre-tax non-cash gain from
the resolution of a contingency that existed as part of the Company's earlier
acquisition of a subsidiary and $515,000 of additional income tax expense for a
change in estimate of the tax basis of acquired assets. Thomas said that the
non-cash gain added $.54 to earnings per share on a diluted basis. He added that
excluding these non-recurring items, the Company's third quarter operating
income as a percentage of sales was lower as compared to the prior year period
primarily due to fixed costs absorbed over lower sales.
Looking forward, Thomas said that the Company is continuing to reduce
costs and plans to take plant downtime during the fourth quarter to reduce
inventory levels. Thomas added that he expects fourth quarter sales to be flat
to slightly up from the third quarter level with earnings per share on a diluted
basis in the range of $.20 to $.30 per share.
Chromcraft Revington designs, manufactures and sells residential and
commercial furniture throughout the United States under the "Chromcraft,"
"Peters-Revington," "Silver Furniture," "Cochrane Furniture" and "Sumter
Cabinet" brand names. The Company's strategy is to operate as a low-cost, high
quality manufacturer of residential and commercial furniture. To achieve this
goal, the Company has increased imports of low-cost labor intensive furniture
components from the Pacific Rim to supplement the Company's furniture
manufacturing. Using this blended approach of domestic manufacturing and
selective importing, the Company is better able to control the quality of
furniture and service to its customers.
This news release contains forward-looking statements under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include the Company's expected sales and earnings, as
well as other statements containing future tense or dates, or which are not
historical facts, or which include words such as "expects" or "plans".
Forward-looking statements speak only as of the date of this news release, are
not guarantees of future results or performance and are subject to certain risks
and uncertainties that could cause actual results or outcomes to differ
materially from those contained in any forward-looking statement. Among such
risks and uncertainties are general economic conditions; import and domestic
competition in the furniture industry; cyclical nature of the furniture
industry; changes in relationships with customers; customer acceptance of
existing and new products; delays or disruptions in the shipment of the
Company's products; new home and office construction; international conflict;
and other factors listed from time to time in the Company's news releases and
reports filed with the Securities and Exchange Commission. Chromcraft Revington
does not undertake any obligation to update or revise any forward-looking
statements to reflect information, developments, events or circumstances after
the date of this news release.
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Condensed Consolidated Statements of Earnings (Loss) (unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
---------------------- -----------------------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2003 2002 2003 2002
-------- -------- --------- ---------
Sales $ 44,951 $ 49,676 $ 138,548 $ 165,150
-------- -------- --------- ---------
Gross margin 8,765 11,260 29,398 36,564
Selling, general and 7,084 7,141 20,993 22,909
administrative expenses
Other (3,650)(a) - (3,650)(a) -
-------- -------- --------- ---------
Operating income 5,331 4,119 12,055 13,655
Interest expense 276 525 904 1,194
-------- -------- --------- ---------
Earnings before income taxes 5,055 3,594 11,151 12,461
and accounting change
Income tax expense 2,436 1,366 4,752 4,735
-------- -------- --------- ---------
Earnings before accounting change 2,619 2,228 6,399 7,726
Cumulative effect of an accounting
change (net of tax benefit of $1,453) - - - (26,727)
-------- -------- --------- ---------
Net earnings (loss) $ 2,619 $ 2,228 $ 6,399 $ (19,001)
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Net earnings per share of common stock
before an accounting change
Basic $ .63 $ .55 $ 1.55 $ 1.39
Diluted $ .62 $ .53 $ 1.53 $ 1.37
Net earnings (loss) per share of common
stock after an accounting change
Basic $ .63 $ .55 $ 1.55 $ (3.43)
Diluted $ .62 $ .53 $ 1.53 $ (3.43)
Shares used in computing earnings
per share
Basic 4,127 4,059 4,120 5,547
Diluted 4,209 4,167 4,190 5,655
(a) Resolution of a contingency that existed as part of the Company's earlier
acquisition of a subsidiary.
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Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
Sept. 27, Sept. 28, Dec. 31,
2003 2002 2002
-------- -------- --------
Accounts receivable $ 23,021 $ 24,030 $ 18,542
Inventories 36,400 43,745 39,812
Other assets 2,326 5,308 1,040
-------- -------- --------
Current assets 61,747 73,083 59,394
Property, plant and equipment, net 35,846 39,586 38,705
Other long-term assets 1,087 2,022 2,366
-------- -------- --------
Total assets $ 98,680 $114,691 $100,465
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Current portion of bank debt $ 6,250 $ 5,000 $ 5,000
Accounts payable 6,177 6,457 5,642
Accrued liabilities 12,372 15,927 14,611
-------- -------- --------
Current liabilities 24,799 27,384 25,253
Bank debt 17,000 35,050 23,050
Other long-term liabilities 5,066 9,861 6,392
-------- -------- --------
Total liabilities 46,865 72,295 54,695
Stockholders' equity 51,815 42,396 45,770
-------- -------- --------
Total liabilities and stockholders' equity $ 98,680 $114,691 $100,465
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Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Nine Months Ended
----------------------
Sept. 27, Sept. 28,
2003 2002
-------- --------
Operating Activities
Net earnings (loss) $ 6,399 $(19,001)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities
Depreciation and amortization 3,412 3,621
Loss on disposal of equipment 11 97
Deferred income taxes 1,501 525
Non-cash goodwill impairment loss -- 26,727
Non-cash ESOP expenses 635 504
Stock option compensation expense 148 107
Changes in assets and liabilities
Accounts receivable (4,479) (3,005)
Inventories 3,412 (150)
Other current assets (1,286) (196)
Other long-term assets 170 299
Accounts payable and accrued liabilities (1,654) 4,081
Other long-term liabilities (1,687) (795)
-------- --------
Cash provided by operating activities 6,582 12,814
-------- --------
Investing Activities
Capital expenditures (566) (1,321)
Proceeds on disposal of property, plant and equipment 2 124
-------- --------
Cash used in investing activities (564) (1,197)
-------- --------
Financing Activities
Net borrowing (repayment) under a bank revolving credit line (2,300) 16,300
Proceeds from a bank term loan -- 25,000
Principal payments on bank term loan (2,500) (1,250)
Purchase of common stock by ESOP -- (20,000)
Stock repurchases and related costs (2,226) (40,529)
Proceeds from exercise of stock options 1,008 655
-------- --------
Cash used in financing activities (6,018) (19,824)
-------- --------
Decrease in cash and cash equivalents -- (8,207)
Cash and cash equivalents at beginning of period -- 8,207
-------- --------
Cash and cash equivalents at end of period $ -- $ --
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