Exhibit 99
[FALCON LOGO]
FOR FURTHER INFORMATION
AT THE COMPANY:
David L. Morley
President & Chief Operating Officer
9387 Dielman Industrial Drive
St. Louis, MO 63132
(314) 991-9200
FOR IMMEDIATE RELEASE
WEDNESDAY, MARCH 10, 2004
FALCON PRODUCTS REPORTS RESULTS FOR
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FISCAL 2004 FIRST QUARTER
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ST. LOUIS, MISSOURI, MARCH 10, 2004 -- Falcon Products, Inc. (NYSE:
FCP), a leading manufacturer of commercial furniture, today announced sales
and operating results for its first quarter ended January 31, 2004.
Net sales for the first quarter of fiscal 2004 were $49.9 million,
a 23% decrease from $65.1 million for the first quarter of 2003. The Company
reported a net loss for the quarter of $12.2 million, or $1.33 per diluted
share, compared with a net loss of $0.3 million, or $0.03 per diluted share,
in the first quarter of 2003. The first quarter 2004 results include charges
related to the closing of the Company's Canton, Mississippi facility, the
write-off of deferred debt issuance costs and the recording of a deferred
tax valuation allowance. These charges totaled $7.1 million, or $0.78 per
share.
Franklin A. Jacobs, Chairman and Chief Executive Officer, stated,
"This quarter was one of transition for the company. We closed the Canton
facility and relocated production to Morristown. Additionally, we
restructured our financing package. The changes in manufacturing facilities
and dislodged production capacity negatively impacted the company's revenues
and EBITDA during the quarter and required the company to obtain a waiver of
certain covenants from its banks and to amend certain covenants for future
quarters. During this process, the banks understood the issues facing the
company and were very cooperative and the company fully expects to meet its
revised covenants. We are now prepared to move forward and show substantial
improvements in sales and operating results in the second quarter of this
year. We expect sales in the second quarter that are comparable to last year
with improved EBITDA."
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Falcon Products
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A weak hospitality market impacted sales in the quarter. This is
reflective of major purchasing decisions being postponed over the holidays
waiting for the new budget year. Orders in January and February have
strengthened significantly and will be reflected in stronger second quarter
sales. The food service sales decreased because of the successful completion
of the Boston Market project in the first quarter of 2003. The balance of
the food service business continued to grow. The contract office market was
down slightly with flat orders year over year.
David L. Morley, President and Chief Operating Officer stated, "We
accomplished several difficult tasks during the quarter. We closed the
Canton facility, staged the raw materials in Eastern Europe to fully execute
the wood frame strategy, expanded production of our outsource partners in
Europe and the U.S. and increased imports from China. In the next 90 days we
expect to see the benefits of these actions."
The company has restated its banking facility as a current
liability. As our results reflect the actions taken and profitability
improves, management expects that the banking facility should be
reclassified as long term.
Furthermore, the company was preliminarily notified by the New York
Stock Exchange of a pending rule change on eligibility for continued
listing. The exchange expects to formally notify all companies impacted by
the change after March 15, 2004. In the event of such a formal notification,
the company will diligently work with the exchange on a remediation plan.
Mr. Jacobs continued, "The difficult steps have been taken at this
point. The cost reduction activities are ahead of schedule. Savings from key
initiatives are tracking with our plan. The company is totally focused on
execution in the second quarter. We will see the impact of these actions in
the current quarter."
Falcon Products, Inc. will conduct a conference call to discuss
fiscal 2004 first-quarter results on March 11, 2004 at 10:00 a.m. EST. The
call will be Web cast at www.companyboardroom.com and
www.falconproducts.com.
Falcon Products, Inc. is the leader in the commercial furniture
markets it serves, with well-known brands, the largest manufacturing base
and the largest sales force. Falcon and its subsidiaries
[FALCON LOGO]
Falcon Products
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design, manufacture and market products for the hospitality and lodging,
food service, office, healthcare and education segments of the commercial
furniture market. Falcon, headquartered in St. Louis, Missouri, currently
operates 8 manufacturing facilities throughout the world and has
approximately 2,100 employees.
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: Statements contained in this news release which are not historical
fact, such as forward-looking statements, involve risks and uncertainties
which could impact future financial performance , including, but not limited
to, loss of key customers or suppliers within specific industries,
availability or cost of raw materials, increased competitive pricing
pressures reflecting industry conditions and general demand for products.
Additional cautionary statements regarding other risk factors that could
have an effect on future performance of the Company are described in
Falcon's periodic filings with the Securities and Exchange Commission.
Although Falcon believes the expectations reflected in any forward-looking
statements are based on reasonable assumptions, Falcon can give no assurance
that its expectations will be attained. Any forward-looking statements
represent the best judgment of Falcon as of the date of this release. Falcon
disclaims any intent or obligation to update any forward-looking statements.
[FALCON LOGO]
Falcon Products
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FALCON PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FIRST QUARTER 2004 RESULTS
(In thousands, except per share amounts)
(Unaudited)
First Quarter Ended
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January 31, February 1, %
2004 2003 Change
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Net sales $ 49,891 $ 65,134 -23.4%
Cost of sales 42,194 50,346 -16.2%
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Gross margin 7,697 14,788 -48.0%
Selling, general and administrative expenses 10,538 10,819 -2.6%
Interest expense and other 5,052 4,133 N/M
Loss on early extinguishment of debt 3,947 (a) - N/M
Restructuring charges 194 (b) - N/M
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Pre-tax loss (12,034) (164) N/M
Income tax expense 196 132 N/M
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Net loss $ (12,230) $ (296) N/M
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Basic and diluted loss per share $ (1.33) $ (0.03) N/M
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Weighted average diluted shares outstanding 9,164 9,048
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<FN>
N/M Not Meaningful
(a) The Company recorded a $3.9 million loss on early extinguishment of
debt to write-off deferred debt issuance costs in connection with the
refinancing of its senior credit facility.
(b) The Company recorded a $0.2 million pre-tax charge during the first
quarter of 2004 to account for the closure of its Canton, Mississippi
facility and the transfer of production into the Company's other
plants.
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Falcon Products
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FALCON PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Jan. 31, Nov. 1, Liabilities and Jan. 31, Nov. 1,
Assets 2004 2003 Stockholders' Equity 2004 2003
- ------ -------------- ------------ -------------------- ------------- -------------
Cash and cash equivalents $ 1,232 $ 1,356 Accounts payable $ 25,844 $ 27,612
Accounts receivable 24,685 31,877 Customer deposits 5,705 5,249
Inventories 62,836 62,525 Accrued liabilities 11,815 16,842
Other current assets 5,863 5,344 Current maturities of
long-term debt 72,275 3,900
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Total current assets 94,616 101,102 Total current liabilities 115,639 53,603
Property, plant and Long-term debt 106,003 161,485
equipment, net 36,370 36,579
Other long-term obligations 12,223 12,868
Other assets 130,013 128,859 Stockholders' equity 27,134 38,584
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$ 260,999 $ 266,540 $ 260,999 $ 266,540
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