EXHIBIT 99.1
For Immediate Release For more information contact:
Monday, November 6, 2006 Frank T. Kane, Vice President-Finance & CFO
Chromcraft Revington, Inc.
Reports Third Quarter and Nine Months Results
West Lafayette, Indiana, November 6, 2006 -- Chromcraft Revington, Inc.
(AMEX:CRC) today reported sales for the three months ended September 30, 2006 of
$35,348,000, representing a 13.4% decrease as compared to sales of $40,836,000
for the prior year period. Third quarter shipments were lower as compared to the
prior year primarily due to competitive pressure and a weak retail furniture
environment. Sales of all furniture categories, particularly in occasional
furniture, were lower as compared to the prior year third quarter.
As previously announced on September 1, 2006, the Company's board of
directors approved the restructuring of certain of the Company's operations. The
purposes of the restructuring are to reduce fixed costs, to improve the
utilization of a global supply chain and to increase overall asset utilization.
The restructuring program includes the shutdown, relocation, consolidation and
outsourcing of certain furniture manufacturing and distribution operations. As a
result, the Company recorded a restructuring and impairment charge of $5,773,000
pre-tax or $3,492,000 after-tax, representing a $.79 loss per share, for the
three months ended September 30, 2006. Most of the restructuring and impairment
charge represents non-cash items.
In connection with the restructuring, the Company determined that it is
unlikely that certain state net operating loss carryforwards will now be
utilized. As a result, the Company recorded a non-cash income tax charge of
$325,000, or $.08 loss per share, for the three months ended September 30, 2006
related to establishing a valuation allowance for such state net operating loss
carryforwards.
After recognizing the aforementioned restructuring and impairment
charge and tax valuation allowance, the net loss for the third quarter of 2006
was $4,457,000, or $1.01 loss per share, as compared to net earnings of
$1,191,000, or $.27 per share on a diluted basis for the prior year period.
Excluding the impact of the restructuring and impairment charge and the tax
valuation allowance, the Company would have had a net loss of $640,000, or $.14
loss per share, for the three months ended September 30, 2006. In addition,
operating results for the third quarter of 2006 were impacted by a reduced
production level, which affected fixed cost absorption and manufacturing
efficiencies, an unfavorable sales mix, and higher manufacturing costs and
professional fees.
For the nine months ended September 30, 2006, the net loss and loss per
share were $2,652,000 and $.60, respectively, as compared to net earnings of
$5,540,000, or $1.28 per share on a diluted basis, for the prior year period.
Excluding the impact of the restructuring and impairment charge and the tax
valuation allowance, the Company would have had net earnings of $1,165,000, or
$.26 per share on a diluted basis, for the first nine months of 2006.
Mr. Benjamin Anderson-Ray, Chairman and Chief Executive Officer, said
that the restructuring activities are an important step in repositioning the
Company in the global furniture marketplace and in strengthening its ability to
remain competitive. The Company's overall strategy requires a transformation of
its business model to increased global sourcing activities, as well as a
conversion of U.S. operations towards an increased focus on distribution and
logistics of imported products and a shift in its manufacturing operations
towards use of demand flow and value added mass customization techniques.
Looking forward, Mr. Anderson-Ray said that fourth quarter operating
results will be negatively impacted by the previously announced closure of the
Company's Warrenton, NC wood processing plant on December 8, 2006. The Company
expects to incur restructuring costs and related asset impairment charges of
$1.0 million to $1.5 million in the three months ending December 31, 2006. He
added that in addition to the Warrenton restructuring costs, the Company expects
to incur fourth quarter expenses to shutdown, vacate and prepare for sale
various facilities in connection with the restructuring activities announced on
September 1, 2006. Mr. Anderson-Ray pointed out that, after considering the
impact of these restructuring costs, the Company expects to incur an operating
loss for the three months ending December 31, 2006. He added that as the Company
continues to adapt to the global furniture marketplace and integrate functions
common to its various products, additional restructuring charges, asset
impairments, transition costs and/or increased operating expenses may be
necessary in the future.
Chromcraft Revington businesses design, manufacture and market
residential and commercial furniture throughout the United States. The Company
wholesales its products under the "Chromcraft," "Peters-Revington," "Silver
Furniture," "Cochrane Furniture" and "Sumter" brand names.
This release contains forward-looking statements that are based on
current expectations and assumptions. These forward-looking statements can be
generally identified as such because they include future tense or dates, or are
not historical or current facts, or include words such as "believes," "expects,"
"intends," "plans," or words of similar import. Forward-looking statements are
not guarantees of performance or outcomes and are subject to certain risks and
uncertainties that could cause actual results or outcomes to differ materially
from those reported, expected or anticipated as of the date of this release.
Among such risks and uncertainties that could cause actual results or
outcomes to differ materially from those reported, expected or anticipated are
the ability of the Company to complete the restructuring actions referenced in
this press release as currently planned and at estimated costs; general economic
conditions; import and domestic competition in the furniture industry; ability
of the Company to execute business strategies; market interest rates; consumer
confidence levels; cyclical nature of the furniture industry; consumer and
business spending; changes in relationships with customers; customer acceptance
of existing and new products; new home and existing home sales; and other
factors that generally affect business. An additional list of risks relating to
the Company's business is located in the Company's Form 10-K for the fiscal year
ended December 31, 2005.
The Company does not undertake any obligation to update or revise
publicly any forward-looking statements to reflect information, events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events or circumstances.
* * *
Condensed Consolidated Statements of Operations (unaudited)
Chromcraft Revington, Inc.
(In thousands, except per share data)
<Table>
<Caption>
Three Months Ended Nine Months Ended
-------------------------------- --------------------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Sales $ 35,348 $ 40,836 $ 121,589 $ 128,896
------------- ------------- ------------- -------------
Gross margin (1) 550 8,949 17,677 29,740
Selling, general and administrative expenses (1) 6,885 6,720 20,933 20,301
------------- ------------- ------------- -------------
Operating income (loss) (6,335) 2,229 (3,256) 9,439
Interest expense 63 342 193 660
------------- ------------- ------------- -------------
Earnings (loss) before income tax expense (benefit) (6,398) 1,887 (3,449) 8,779
Income tax expense (benefit) (2) (1,941) 696 (797) 3,239
------------- ------------- ------------- -------------
Net earnings (loss) $ (4,457) $ 1,191 $ (2,652) $ 5,540
============= ============= ============= =============
Earnings (loss) per share of common stock
Basic $ (1.01) $ .28 $ (.60) $ 1.30
Diluted $ (1.01) $ .27 $ (.60) $ 1.28
Shares used in computing earnings (loss) per share
Basic 4,423 4,322 4,406 4,253
Diluted 4,423 4,398 4,406 4,315
(1) The Company previously announced, on September 1, 2006, a restructuring
plan to shutdown, relocate, consolidate and outsource certain furniture
manufacturing and distribution operations. As a result, the Company
recorded total restructuring costs and related impairment charges
during the three and nine months ended September 30, 2006 of $5,773,000
pre-tax as follows:
Restructuring charges:
Costs to shutdown, vacate and prepare for sale $ 36
One-time termination benefits 122
Inventory write-downs 2,748
-------------
2,906
Impairment charges 2,867
-------------
$ 5,773
=============
Statements of Operations classification:
Gross margin $ 5,633
Selling, general and administrative
expenses 140
-------------
$ 5,773
=============
(2) In connection with the restructuring of its operations in Sumter, South
Carolina, the Company has determined it is unlikely that certain state
net operating loss carry-forwards will now be utilized. As a result,
the Company recorded a non-cash income tax charge of approximately
$325,000 related to establishing a valuation allowance for such state
net operating loss carryforwards during the third quarter of 2006.
Condensed Consolidated Balance Sheets (unaudited)
Chromcraft Revington, Inc.
(In thousands)
September 30, October 1, December 31,
2006 2005 2005
------------ ------------ ------------
Cash and cash equivalents $ 2,384 $ -- $ --
Accounts receivable 18,949 22,257 18,735
Inventories 34,700 36,556 37,009
Prepaid expenses and other 2,840 2,660 1,922
------------ ------------ ------------
Current assets 58,873 61,473 57,666
Property, plant and equipment, net 26,115 30,664 30,274
Deferred income taxes and other long-term assets 1,672 804 1,319
------------ ------------ ------------
Total assets $ 86,660 $ 92,941 $ 89,259
============ ============ ============
Accounts payable $ 4,554 $ 5,072 $ 5,448
Accrued liabilities 8,058 9,073 7,340
------------ ------------ ------------
Current liabilities 12,612 14,145 12,788
Bank debt -- 4,390 --
Deferred compensation 2,010 2,585 2,486
Other long-term liabilities 1,037 1,364 1,323
------------ ------------ ------------
Total liabilities 15,659 22,484 16,597
Stockholders' equity 71,001 70,457 72,662
------------ ------------ ------------
Total liabilities and stockholders' equity $ 86,660 $ 92,941 $ 89,259
============ ============ ============
</Table>
More...
Condensed Consolidated Statements of Cash Flows (unaudited)
Chromcraft Revington, Inc.
(In thousands)
Nine Months Ended
--------------------------------
September 30, October 1,
2006 2005
------------- -------------
Operating Activities
Net earnings (loss) $ (2,652) $ 5,540
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities
Depreciation expense 2,502 2,643
Non-cash asset impairment charges 2,867 --
Non-cash ESOP compensation expense 620 670
Non-cash stock compensation expense 371 184
Non-cash inventory obsolescence write-downs 3,378 12
Deferred income taxes (1,131) 372
Loss on disposal of property, plant and equipment 19 230
Changes in operating assets and liabilities
Accounts receivable (214) (4,124)
Inventories (1,069) (2,902)
Prepaid expenses and other (484) (1,216)
Accounts payable and accrued liabilities (164) 429
Deferred compensation and other long-term assets
and liabilities (430) (571)
------------- -------------
Cash provided by operating activities 3,613 1,267
------------- -------------
Investing Activities
Capital expenditures, net (1,229) (1,047)
------------- -------------
Cash used in investing activities (1,229) (1,047)
------------- -------------
Financing Activities
Net borrowing under an unsecured bank revolving credit line -- 4,390
Net prepayments under a secured bank revolving credit line -- (1,450)
Principal payments on a bank term loan -- (4,250)
Stock repurchase from related party -- (754)
Exercise of stock options -- 1,844
------------- -------------
Cash used in financing activities -- (220)
------------- -------------
Change in cash and cash equivalents 2,384 --
Cash and cash equivalents at beginning of period -- --
------------- -------------
Cash and cash equivalents at end of period $ 2,384 $ --
============= =============