Chromcraft Revington, Inc. Reports Fourth Quarter And Full Year Results
The net loss for 2011 was $4.4 million, or 37.3% lower than 2010. The reduced loss for both the fourth quarter of 2011 and the year ended December 31, 2011 compared to the same periods in 2010 was primarily due to a reduction in selling, general and administrative expenses and a favorable product sales mix. The reduction in selling, general and administrative expenses in 2011 resulted primarily from lower marketing-related expenses in 2011; charges in 2010 for a fourth quarter asset impairment related to an information technology system which we determined was not recoverable and payments made to former sales executives for unearned commissions which were payable under their employment agreements; and a reversal in the fourth quarter of 2011 of an accrual for estimated environmental costs related to land that we sold in December 2011.
Excluding receipt of a tax refund of $6.6 million in 2010, we used $1.0 million less cash in operating activities in 2011 as compared to 2010, primarily due to a reduced cash loss in 2011. The Company had $0.9 million of net borrowings on its credit facility during 2011, and an outstanding loan balance of $0.9 million at December 31, 2011.
Commenting on these results, Ronald H. Butler, Chairman and Chief Executive Officer, said, “Despite the continuing difficult retail operating environment, we are encouraged by our fourth consecutive quarterly reduction in net loss, which represented a 91% improvement over the prior year quarter and the increased sales levels in the fourth quarter compared to both the prior quarter and the same period last year. These improvements reflect increased order activity and shipments of contract commercial products, cost containment initiatives and reduced selling, general and administrative expenses. The ongoing difficult operating environment in the residential furniture market will continue to be challenging in 2012.
“We are pleased with our recent acquisition of California-based Executive Office Concepts, Inc. (‘EOC’), which will become part of our commercial contract division and its products will be sold under the EOC brand name. We believe its commercial product lines, especially an extensive health care line, complement our current product line of seating, tables, and waiting area furniture. We plan to operate EOC and offer its branded products to our contract customers, especially those seeking office suites and those in the health care segment. In addition, our commercial product division was awarded a three year vendor contract late in 2011 which took effect on January 1, 2012 with the Premier health care alliance which serves more than 2,500 U.S. hospitals and 80,000-plus other health care sites. The health care sector continues to grow significantly and we believe this alliance relationship continues to position the commercial line of our Chromcraft division where it needs to be for the future. In these uncertain economic times, we have diligently focused on our cash flow and balance sheet management along with controlling operating costs to be in line with our revenue base.”
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