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Natuzzi S.p.A. Third Quarter And First Nine Months 2012 Financial Results

The dial-in phone numbers for the live conference call will be 1-888-438-5491 (toll-free) for persons calling from the U.S. or Canada, and 1-719-325-2435 for those calling from other countries.

A live web cast of the conference call will be available on line at http://www.natuzzi.com/ under the Investor Relations section.

A replay of the call will be available shortly after the end of the conference call starting from November 19, 2012 (at 1:00 pm US Eastern time) to December 19, 2012. To access the replay of the conference call, interested persons need to dial 1-877-870-5176 (toll-free) for calls from U.S. and Canada, and 1-858-384-5517 for calls from other countries. The access code for the replay is: 2491731.

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About Natuzzi S.p.A.

Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and manufactures a broad collection of residential upholstered furniture. With consolidated revenues of EUR 486.4 million in 2011, Natuzzi is Italy's largest furniture manufacturer. The Natuzzi Group exports its innovative high-quality sofas and armchairs to 130 markets on five continents under separate brand names, Natuzzi, Italsofa, Natuzzi Editions (only for the North American market) / Leather Editions and Softaly. Cutting-edge design, superior Italian craftsmanship and advanced, vertically integrated manufacturing operations underpin the Company's market leadership. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001.

Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Profit & Loss for the third quarter 2012 and 2011 on the basis of Italian GAAP
(expressed in millions Euro except per-share data)
                     
  Three months ended on   Change   Percentage of Sales
    Sept. 30, 2012   Sept. 30, 2011   %   Sept. 30, 2012   Sept. 30, 2011
   
Upholstery net sales 97.5 99.7 -2.2% 87.3% 87.2%
Other sales   14.2   14.7   -3.5%   12.7%   12.8%
Total Net Sales   111.7   114.4   -2.4%   100.0%   100.0%
 
Consumption (*) (48.5) (53.9) -10.0% -43.4% -47.1%
Labor (16.9) (18.9) -10.6% -15.1% -16.5%
Industrial Costs (6.9) (7.7) -10.9% -6.2% -6.7%
of which: Depreciation, Amortization   (2.2)   (2.4)   -8.0%   -2.0%   -2.1%
Cost of Sales   (72.3)   (80.5)   -10.2%   -64.7%   -70.4%
                     
Industrial Margin   39.4   33.9   16.3%   35.3%   29.6%
 
Selling Expenses (19.1) (18.7) 2.6% -17.1% -16.3%
Transportation (12.2) (11.6) 5.2% -10.9% -10.1%
Commissions (2.6) (2.1) 25.8% -2.4% -1.8%
Advertising (4.3) (5.0) -13.3% -3.9% -4.4%
 
Other Selling and G&A (22.6) (24.2) -6.6% -20.2% -21.2%
of which: Depreciation, Amortization (1.9) (2.4) -20.7% -1.7% -2.1%
                     
EBITDA   1.8   (4.1)       1.6%   -3.6%
                     
EBIT   (2.3)   (9.0)       -2.1%   -7.9%
 
Interest Income/(Costs), Net 0.1 0.0
Foreign Exchange, Net (2.0) (0.9)
Other Income/(Cost), Net (0.3) (0.7)
                     
Earning before Income Taxes   (4.5)   (10.6)       -4.1%   -9.3%
 
Current taxes (0.7) 0.3 -0.6% 0.2%
                     
Net Result   (5.2)   (10.3)       -4.7%   -9.0%
 
Minority interest 0.0 0.0
                     
Net Group Result   (5.2)   (10.3)       -4.7%   -9.0%
                     
Net Group Result per Share   (0.09)   (0.19)            
 
                     
Key Figures in U.S. dollars Three months ended on Change Percentage of Sales
(millions)   Sept. 30, 2012   Sept. 30, 2011   %   Sept. 30, 2012   Sept. 30, 2011
 
Total Net Sales 139.7 143.1 -2.4% 100.0% 100.0%
Industrial Margin 49.3 42.4 16.3% 35.3% 29.6%
EBIT (2.9) (11.2) -2.1% -7.9%
Net Group Result (6.5) (12.8) -4.7% -9.0%
Net Group Result per Share (0.12) (0.2)
 
Average exchange rate

(U.S.$ per 1€)

1.2510
 

(*) Purchases plus beginning stock minus final stock and leather processing

  UPHOLSTERY NET SALES BREAKDOWN
                 

GEOGRAPHIC BREAKDOWN

NET SALES (million euro) SEATS SOLD
 
Three months ended on Three months ended on
Sept. 30, 2012   Sept. 30, 2011   Change Sept. 30, 2012   Sept. 30, 2011   Change
 
Americas 43.6 44.7% 41.5 41.6% 5.1% 210,914 52.2% 223,058 50.4% -5.4%
Natuzzi Italia 3.5 3.6% 4.0 4.0% -11.9% 7,416 1.9% 10,958 2.5% -32.3%
Other brands (*) 40.1 41.1% 37.5 37.6% 6.9% 203,498 50.3% 212,100 47.9% -4.1%
 
Europe (ex Italy) 32.1 32.9% 34.3 34.4% -6.3% 120,097 29.7% 132,974 30.0% -9.7%
Natuzzi Italia 12.3 12.6% 14.2 14.3% -13.2% 24,526 6.1% 28,801 6.5% -14.8%
Other brands (*) 19.8 20.3% 20.1 20.1% -1.5% 95,571 23.6% 104,173 23.5% -8.3%
 
Italy (Natuzzi Italia) 6.0 6.2% 8.1 8.2% -25.8% 19,234 4.8% 27,376 6.2% -29.7%
 
Rest of the World 15.8 16.2% 15.8 15.8% -0.2% 54,072 13.4% 59,135 13.4% -8.6%
Natuzzi Italia 7.7 7.9% 7.9 7.9% -2.9% 16,027 4.0% 18,139 4.1% -11.6%
Other brands (*) 8.1 8.3% 7.9 7.9% 2.5% 38,045 9.4% 40,996 9.3% -7.2%
                                       
Total 97.5 100.0% 99.7 100.0% -2.2% 404,317 100.0% 442,543 100.0% -8.6%
                                       
 

BREAKDOWN BY BRAND

NET SALES (million euro) SEATS SOLD
 
Three months ended on Three months ended on
 
    Sept. 30, 2012   Sept. 30, 2011   Change Sept. 30, 2012   Sept. 30, 2011   Change
 
Natuzzi Italia 29.5 30.3% 34.2 34.3% -13.7% 67,203 16.6% 85,274 19.3% -21.2%
 
Other brands (*) 68.0 69.7% 65.5 65.7% 3.8% 337,114 83.4% 357,269 80.7% -5.6%
                                       
Total 97.5 100.0% 99.7 100.0% -2.2% 404,317 100.0% 442,543 100.0% -8.6%
                                       
 
(*) Italsofa, Natuzzi Editions/Leather Editions and unbranded
 

Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Profit & Loss for the first nine months of 2012 & 2011 on the basis of Italian GAAP
(expressed in millions Euro except per-share data)
                     
  Nine months ended on   Change   Percentage of Sales
    Sept. 30, 2012   Sept. 30, 2011   %   Sept. 30, 2012   Sept. 30, 2011
   
Upholstery net sales 298.9 310.7 -3.8% 87.3% 87.1%
Other sales   43.4   46.1   -5.7%   12.7%   12.9%
Total Net Sales   342.3   356.8   -4.1%   100.0%   100.0%
 
Consumption (*) (150.8) (157.0) -4.0% -44.0% -44.0%
Labor (55.1) (59.1) -6.8% -16.1% -16.6%
Industrial Costs (21.5) (23.5) -8.4% -6.3% -6.6%
of which: Depreciation, Amortization   (7.0)   (7.5)   -6.1%   -2.1%   -2.1%
Cost of Sales   (227.3)   (239.6)   -5.1%   -66.4%   -67.2%
                     
Industrial Margin   115.0   117.2   -1.9%   33.6%   32.8%
 
Selling Expenses (53.9) (55.7) -3.1% -15.8% -15.6%
Transportation (34.0) (33.6) 1.3% -9.9% -9.4%
Commissions (7.5) (6.3) 19.1% -2.2% -1.8%
Advertising (12.4) (15.8) -21.4% -3.6% -4.4%
 
Other Selling and G&A (71.4) (78.6) -9.2% -20.8% -22.0%
of which: Depreciation, Amortization (5.9) (7.5) -20.9% -1.7% -2.1%
                     
EBITDA   2.6   (2.1)       0.8%   -0.6%
                     
EBIT   (10.3)   (17.0)       -3.0%   -4.8%
 
Interest Income/(Costs), Net (0.1) (0.2)
Foreign Exchange, Net (1.3) (1.2)
Other Income/(Cost), Net 0.0 16.7
                     
Earning before Income Taxes   (11.7)   (1.8)       -3.4%   -0.5%
 
Current taxes (2.2) (0.9) -0.7% -0.3%
                     
Net result   (13.9)   (2.7)       -4.1%   -0.8%
 
Minority interest (0.1) (0.9)
                     
Net Group Result   (14.0)   (3.6)       -4.1%   -1.0%
                     
Net Group Result per Share   (0.26)   (0.07)            
 
                     
Key Figures in U.S. dollars Nine months ended on Change Percentage of Sales
(millions, except per share data)   Sept. 30, 2012   Sept. 30, 2011   %   Sept. 30, 2012   Sept. 30, 2011
 
Total Net Sales 438.9 457.4 -4.1% 100.0% 100.0%
Industrial Margin 147.4 150.2 -1.9% 33.6% 32.8%
EBIT (13.2) (21.8) -3.0% -4.8%
Net Group Result (18.0) (4.7) -4.1% -1.0%
Net Group Result per Share (0.33) (0.1)
 
Average exchange rate

(U.S.$ per 1€)

1.2820
                     
 
(*) Purchases plus beginning stock minus final stock and leather processing
 

  UPHOLSTERY NET SALES BREAKDOWN
                 

GEOGRAPHIC BREAKDOWN

NET SALES (million euro) SEATS SOLD
Nine months ended on Nine months ended on
Sept. 30, 2012   Sept. 30, 2011   Change Sept. 30, 2012   Sept. 30, 2011   Change
 
Americas 125.1 41.8% 105.2 33.9% 18.9% 613,762 49.8% 576,081 44.0% 6.5%
Natuzzi Italia 11.7 3.9% 12.0 3.9% -3.3% 27,541 2.2% 35,328 2.7% -22.0%
Other brands (*) 113.4 37.9% 93.2 30.0% 21.7% 586,221 47.6% 540,753 41.3% 8.4%
 
Europe (ex Italy) 105.3 35.2% 124.7 40.1% -15.5% 386,198 31.4% 452,617 34.6% -14.7%
Natuzzi Italia 45.6 15.2% 62.0 20.0% -26.5% 93,515 7.6% 133,647 10.2% -30.0%
Other brands (*) 59.7 20.0% 62.7 20.2% -4.7% 292,683 23.8% 318,970 24.4% -8.2%
 
Italy (Natuzzi) 24.3 8.1% 34.8 11.2% -30.1% 76,462 6.2% 109,383 8.4% -30.1%
 
Rest of the World 44.2 14.8% 46.0 14.8% -3.9% 155,018 12.6% 171,534 13.1% -9.6%
Natuzzi Italia 21.4 7.2% 25.0 8.1% -14.4% 46,478 3.8% 59,296 4.5% -21.6%
Other brands (*) 22.8 7.6% 21.0 6.7% 8.6% 108,540 8.8% 112,238 8.6% -3.3%
                                     
Total 298.9 100.0% 310.7 100.0% -3.8% 1,231,439 100.0% 1,309,614 100.0% -6.0%
                                     
 

BREAKDOWN BY BRAND

NET SALES (million euro) SEATS SOLD
Nine months ended on Nine months ended on
  Sept. 30, 2012   Sept. 30, 2011   Change   Sept. 30, 2012   Sept. 30, 2011   Change
 
Natuzzi 102.9 34.4% 133.8 43.1% -23.1% 243,995 19.8% 337,653 25.8% -27.7%
 
Other brands (*) 195.9 65.6% 176.9 56.9% 10.8% 987,444 80.2% 971,961 74.2% 1.6%
                           

 

       
Total 298.9 100.0% 310.7 100.0% -3.8% 1,231,439 100.0% 1,309,614 100.0% -6.0%
                                     
 
(*) Italsofa, Natuzzi Editions / LeatherEditions and unbranded
 

Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Balance Sheets as at September 30, 2012

and December 31, 2011 on the basis of Italian GAAP (Expressed in millions of Euro)

   
ASSETS   Sept. 30, 2012   31-Dec-11
 
Current assets:
Cash and cash equivalents 80.9 94.0
Marketable debt securities 0.0 0.0
Trade receivables, net 93.4 92.9
Other receivables 54.0 44.9
Inventories 85.3 93.5
Unrealized foreign exchange gains 0.0 0.1
Prepaid expenses and accrued income 3.3 2.6
Deferred income taxes 0.6 0.4
         
Total current assets   317.5   328.4
 
Non current assets:
Net property, plant and equipment 163.9 175.8
Other assets 6.3 6.8
         
Total non current assets   170.2   182.6
 
TOTAL ASSETS   487.7   511.0
 
LIABILITIES AND SHAREHOLDERS' EQUITY        
 
Current liabilities:
Short-term borrowings 29.1 24.2
Current portion of long-term debt 3.8 3.7
Accounts payable-trade 49.6 63.6
Accounts payable-other 24.6 21.4
Unrealized foreign exchange losses 0.4 0.6
Income taxes 1.4 1.3
Salaries, wages and related liabilities 10.5 8.0
         
Total current liabilities   119.4   122.8
 
Long-term liabilities:
Employees' leaving entitlement 26.1 26.8
Long-term debt 7.9 10.8
Deferred income taxes - long term 6.7 6.9
Deferred income for capital grants 9.4 9.8
Other liabilities 21.7 20.3
         
Total long-term liabilities   71.8   74.6
         
Minority interest   2.8   3.0
 
Shareholders' equity:
Share capital 54.9 54.9
Reserves 12.0 42.8
Additional paid-in capital 9.3 8.3
Retained earnings 217.5 204.6
         
Total shareholders' equity   293.7   310.6
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   487.7   511.0
 

Natuzzi S.p.A. and Subsidiaries
Consolidated Statements of Cash Flows   Nine months ended on
(Expressed in million of euro)   Sept. 30, 2012   Sept. 30, 2011
Cash flows from operating activities:  
Net earnings (loss) (14.0) (3.6)
 
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 13.0 15.0
Employees' leaving entitlement - 4.0
Deferred income taxes 0.2 (0.6)
Minority interest 0.1 0.9
(Gain) loss on disposal of assets 0.6 (24.6)
Unrealized foreign exchange losses and gains (0.3) (0.6)
Impairment of long lived assets - -
Deferred income for capital grants (0.4) (0.4)
Non monetary operating costs 13.2 (6.3)
 
Change in assets and liabilities:
Receivables, net (0.5) 7.4
Inventories 8.2 (2.8)
Prepaid expenses and accrued income (0.7) (0.9)
Other assets (5.3) (4.6)
Accounts payable (16.8) (1.0)
Income taxes (0.3) (1.8)
Salaries, wages and related liabilities 2.5 0.2
Other liabilities (0.3) (4.0)
 
Net working capital   (13.2)   (7.5)
 
Net cash provided by operating activities   (14.0)   (17.4)
 
Cash flows from investing activities:
Property, plant and equipment:
Additions (2.7) (14.7)
Disposals 1.6 0.1
Proceeds from sales - 45.0
Purchase of business, net of cash acquired (0.2) -
 
Net cash used in investing activities   (1.3)   30.4
 
Cash flows from financing activities:
Long-term debt:
Proceeds - 1.0
Repayments (2.8) (1.0)
Short-term borrowings 4.9 24.4
Capital injection - -
Dividends paid to minority interests - -
 
Net cash used in financing activities   2.1   24.4
 
Effect of translation adjustments on cash 0.1 0.1
 
Increase (decrease) in cash and cash equivalents   (13.1)   37.5
 
Cash and cash equivalents, beginning of the year   94.0   61.1
 
Cash and cash equivalents, end of the period   80.9   98.6
 




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