Archive for July 18th, 2007
By: Furniture World Magazine
Stanley Furniture Company, Inc. reported sales and earnings for the second quarter of 2007.
Net sales of $67.7 million decreased 12.6% from the second quarter of 2006. The company recorded a net loss of $(2.4) million or $(.23) per share compared to net income of $3.9 million or $.32 per share in the year ago quarter. The net loss for the second quarter of 2007 included a charge to earnings of $6.6 million ($4.5 million net of taxes) or $.43 per share for the previously announced final termination of the Company’s defined benefit pension plan.
For the first half of 2007, net sales of $142.8 million decreased 11.3% from the comparable prior year period. Including the charge to earnings for final termination of the Company’s defined benefit pension plan, a net loss of $(700) thousand or $(.07) per share was recorded for the first half of 2007 compared to net income of $9.3 million or $.75 per share in the first half of 2006.
Operating income, excluding pension termination charge of $6.6 million, declined to $3.5 million or 5.2% of net sales in the second quarter of 2007 compared to $6.3 million or 8.1% of net sales in the year-ago quarter. Year-to-date operating income, excluding pension termination charge of $6.6 million, decreased to $6.6 million or 4.6% of net sales compared to $14.9 million or 9.3% of net sales in the first half of 2006. Lower margins resulted primarily from lower sales and production levels together with higher raw material and compensation costs. These factors were partially offset by lower performance based compensation expense due to lower earnings. Sequentially, operating margins improved to 5.2% of net sales in the second quarter of 2007 compared to 4.1% of net sales in the first quarter of 2007. This improvement was primarily due to lower staffing and output levels at one of the Company’s factories which was completed late in the first quarter of 2007 and elimination of the associated transition costs.
The Company received $25 million in proceeds from a private note placement in April 2007. This note bears interest at 6.73% per annum and is payable in seven equal annual principle payments starting in May 2011, with the final payment due in May 2017. A portion of the proceeds from this loan, cash on hand, and cash flow from operations was used to repurchase 521,831 shares of the Company’s common stock for $11.3 million, pay cash dividends of $2.1 million, and make scheduled debt payments of $1.4 million in the first half of 2007. Working capital, excluding cash and current maturities of long-term debt, increased $3.0 million during the first half of 2007 primarily due to a build in inventories. Approximately $21.3 million is currently authorized by the Company’s Board of Directors to repurchase shares of the Company’s common stock.
A year ago the Company announced its decision to terminate its defined benefit pension plan. No benefits were accrued under this plan since it was frozen in 1995, at which time Company contributions to a 401K savings plan became the Company’s primary retirement benefit. Having received all necessary regulatory approvals, distribution of assets and final plan termination occurred in the second quarter of 2007. As expected, this resulted in a final cash contribution of $1.6 million and a charge to earnings of $6.6 million pre-tax, $4.5 million net of taxes, or $.43 per share. Pension expense related to this plan was approximately $1.2 million pre-tax for 2005 and 2006.
Business Outlook
“Business conditions deteriorated slightly as the second quarter progressed,” commented Jeffrey R. Scheffer, President and Chief Executive Officer. “While we are disappointed with lower sales and earnings, we believe this is consistent with current industry-wide conditions.”
“We are not anticipating any significant improvement in the demand environment for the balance of 2007. Consequently, we have lowered our sales and earnings guidance as set forth below,” concluded Scheffer.
Management offers the following guidance. This guidance excludes any potential receipt of funds under the Continued Dumping and Subsidy Offset Act of 2000 (”CDSOA”) involving tariffs collected by the U.S. government on wooden bedroom furniture imported from China.
Total year 2007 guidance:
- Net sales are expected to be in the range of $280 million to $290 million, compared to $307.6 million in 2006.
- Operating income is expected to be in the range of $12.7 million to $14.2 million (excluding a charge to earnings of $6.6 million for the pension plan termination).
- Earnings per share are expected to be in the range of $.65 to $.75 (excluding a charge to earnings of $.42 for the pension plan termination) compared to $1.17 for 2006, excluding income from CDSOA.
Third quarter ending September 29, 2007 guidance:
- Net sales are expected to be in the range of $70 million to $74 million, compared to sales of $75.9 million in the third quarter of 2006.
- Operating income is expected to be in the range of $3.2 million to $3.8 million.
- Earnings per share are expected to be in the range of $.16 to $.20 compared to $.26 in the third quarter of 2006.
Other Information
All earnings per share amounts are on a diluted basis.
Established in 1924, Stanley Furniture Company, Inc. is a leading manufacturer of wood furniture targeted at the upper-medium price range of the residential market. Manufacturing facilities are located in Stanleytown and Martinsville, Va. and Robbinsville and Lexington, N.C. Its common stock is traded on the Nasdaq stock market under the symbol STLY.
July 18th, 2007
Upholstery supplier’s sales have declined, says owner
TORONTO — Consolidated Mercantile Inc. has announced it will sell its investment interest in upholstery manufacturer and importer Distinctive Designs Furniture.
“The board is currently evaluating potential strategies for implementing the sale,” the company said in a statement.
The publicly held merchant banking and management holding company owns 50.3% of Distinctive Designs, which sells both fabric and leather upholstery.
Consolidated said Distinctive’s sales in the first quarter were C$6.3 million, off 18% from the C$7.7 million recorded for the same period of 2006.
For all of 2006, Distinctive’s sales were C$30.2 million, down from C$37 million in 2005. Consolidated recorded net losses of C$9.1 million for 2006 and C$6.1 million for 2005, most of which it attributed to setbacks suffered by Distinctive throughout North America.
“Distinctive’s results were negatively impacted by the continually strengthening Canadian dollar, a difficult retail environment and increased competition, primarily from offshore manufacturers,” Fred Litwin, Consolidated Mercantile’s president, said in a statement.
However, he reassured shareholders that Distinctive’s management was working towards a turnaround. He said the company is pursuing a profit improvement program to reduce material and labor costs and increase sales.
“This includes a substantial increase in its component import programs as well as the initiation of the import of certain finished products, the expansion of its product line to include motion furniture, the closure of its North Carolina plant and the consolidation of its three Toronto facilities into two,” Litwin said. “Distinctive continues to work on new sales and marketing programs, as well as channels of distribution with both existing and prospective new customers.”
Some 41% of Distinctive’s sales are to U.S. retailers. In addition to its brand, the company produces goods under the Kroehler label for the Canadian market and has about 22 Kroehler in-store galleries across the country.
Distinctive President Alan Kornblum also is a major shareholder in the company.
In addition to Distinctive Designs, Consolidated also has an equity position in Polyair Inter Pack, a producer of specialty cover and packaging producer.
July 18th, 2007
By: Furniture World Magazine
Mattress Firm, one of the nation’s leading specialty mattress retailers, announced that the company has concluded its internally-driven, national agency review and selected two strategic partners to drive its creative and media initiatives.
Fort Lauderdale-based Zimmerman Advertising will oversee creative, which is an extension of the role the company has partially held for the past 18 months, while the San Francisco office of OMD will assume responsibilities for media planning and buying. Both firms are part of the Omnicom Group.
“Mattress Firm is in an accelerated growth stage and our brand positioning and marketing efforts are critical components of our overall growth strategy,” said Bill Dandy, executive vice president of branding for Mattress Firm. “After an extensive agency review with some highly talented and qualified agencies, I am confident that we’ve selected two partners who have the leadership and the know-how to develop and implement marketing strategies that will build on our brand equity. We also expect to realize a high degree of synergy between the two agencies, as they are both part of the respected Omnicom family of companies.”
In addition to Zimmerman and OMD, the agency review process included consideration of some the industry’s most recognized and reputable agencies, including several top 10 agencies as ranked by Advertising Age.
Mattress Firm currently operates 400 stores in 35 markets in 20 states. The company has already opened 34 new stores in 2007 through both strategic acquisitions and organic growth and has plans to open an additional 45 by the end of the year.
“We look forward to continuing our brand development work with Mattress Firm as we further establish their position as the premier national specialty store destination for sleep solutions” said Pat Patregnani, President of Zimmerman.
Dandy added: “Pat and his team have played an integral role in establishing our presence in many of our key markets, I look forward to the impact they will have on a national scale.”
“We are thrilled to have the opportunity to work with Mattress Firm. Our team is anxious to begin developing media strategies that will target consumers across multiple mediums to support their accelerated growth plans,” said Monica Karo, Managing Director for OMD West.
Mattress Firm has also been working with Seattle-based Destination Marketing for several years. During the transitional period, which may continue through early spring 2008, Destination Marketing will continue to support Mattress Firm in many of its key markets.
“We are very appreciative of the impact that Dan Voetmann and his team have had on our business results to date and look forward to their continued support throughout this transition.” said Bill Dandy.
About Zimmerman Advertising:
Headquartered in Fort Lauderdale, ZIMMERMAN ADVERTISING, an Omnicom Group ™ company, is currently the 15th largest advertising agency in the United States, with more than 1,000 full-time associates and offices throughout the country, including New York, Los Angeles, Washington D.C., Chicago, Dallas, San Francisco and Atlanta.
About OMD: OMD (www.omd.com) is one of the largest and most innovative media communications specialists in the world, with more than 140 offices in 80 countries. Named 2006 Most Creative Agency in the World by The Gunn Report for Media, OMD also had the distinction of being named Media Agency of the Year and winning a Gold Lion and two Bronze Lions at the 2007 Cannes International Advertising Festival. In addition, OMD was awarded the most Effies in 2006 and 2007, including the highest honor of Grand Effie, and was named 2005 Global Media Agency of the Year by Adweek and 2005 Media Agency of the Year in the U.S. by Advertising Age. The agency network is a unit of Omnicom Group Inc.
About Mattress Firm: Houston-based Mattress Firm (www.mattressfirm.com) is America’s preferred specialty mattress company and the nation’s largest specialty retailer of top-of-the-line Sealy products. Founded in 1986, Mattress Firm’s knowledgeable sales staff, broad product offering and competitive prices have fueled the company’s growth to 400 stores in 35 markets.
July 18th, 2007
Fabric company will be based in High Point
HIGH POINT — Greenhouse Design and Irvin Alan Design have merged into one company under the name Greenhouse Design, to be headquartered here.
Greenhouse Design and Irvin Allen already had the same ownership. With the merger, the company will have 70 employees at the High Point operation, 15 of which are new jobs for the city, transferred from Irvin Alan’s former location in Grand Rapids, Mich.
About 95% of the new company’s fabrics are for residential home furnishings.
The company said that combining warehouse facilities, shipping practices and other operations signals a shift in industry dynamics to operate more efficiently, and assures customers they will continue to see the products.
“Bringing the entire operation to High Point, the home furnishings capital of the world, will only enhance our leading position within the fabrics industry,” said Ryan McCullough, vice president of sales, who was formerly with Irvin Alan. “The combination gives us the opportunity and resources to push for more market share and name recognition under one brand.”
Irvin Alan, a fabric brand for more than 100 years, rolled out a line of designer fabrics in early 2005 that aligned well with the products of Greenhouse Design, the companies said. As a result, the synergy between the two companies continues to grow.
“Greenhouse and Irvin Alan share similar characteristics,” said President Mike Bivins, who has been based here with Greenhouse. “Having them both under one roof in High Point will be beneficial to both our customers and an efficient bottom line.”
The company said it will continue to offer same-day shipping of fabric orders and quarter-yard samples as part of its high-end customer service portfolio.
July 18th, 2007
Nation Reporter,Nairobi
The Government has been sued over a Sh195 million debt for furniture used by former President Daniel Moi.
Furncon Ltd says it has not been paid since September, 1992, when it designed, made and delivered two Presidential chairs, stools, mace table rest and holder and a consignment of other furniture meant for VIP use at state functions.
In its pleadings filed at the High Court in Nairobi, the firm says it won the tender floated by the Department of Defence and later got approval from State House.
Approval given
In order for the furniture to join other insignias of the Republic of Kenya, approval was given by the tender board later assented to by then President Moi himself.
The firm was asked to make more such furniture for presidential lounges at the Eldoret Moi Airbase and Kahawa Garrison, the company claims.
After making the items meant for Kahawa Garrison, the company says it was asked to deliver them to the Agricultural Society of Kenya offices in Nairobi for a three-day presidential function.
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But the President ordered that the furniture remain at the ASK offices.
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Although Mr Moi used the items for a year, Furncon explains that the ASK later wrote to it, advising it to collect the furniture.
Furncon managing director Solomon Njoroge Kiore was later called to a meeting at DoD and advised to go to State House for payment. However, he was sent back to DoD on the grounds that it was the DoD that had made such payments in the past.
Furncon wants a declaration that the ownership of the items passed on to the Government in September, 1992, under the National Flag, Emblems and Names Act
July 18th, 2007
David Perry — Furniture Today
New location, still in Chicago area, will accommodate growth
HINSDALE, Ill. — Top 10 bedding maker Comfort Solutions is looking west — and slightly south — for its new corporate headquarters. The company will be moving from this Chicago suburb to another, Willowbrook, in the fall.
The new headquarters will be roomier and will include a showroom and a technical center for the company’s bedding products. The Willowbrook site is a few miles southwest from current headquarters in an office complex here.
“This is an exciting time for Comfort Solutions,” said Dave Roberts, president and chief operating officer. “The licensees support us and share the same belief in this being the right time to focus on our future capabilities.”
Comfort Solutions recently expanded its senior management team as part of an aggressive growth push. The new headquarters facility is needed “to accommodate expected future growth,” the company said.
“Moving only a few miles accommodates many of our needs, plus we keep our great proximity with good access to both major (Chicago area) airports,” Roberts said. “A new office facility, which now includes research and development and a technical center, allows us to consolidate and enhance product development efforts, all under one roof.”
The office move is set for October, and Comfort Solutions will focus on finishing the technical center by the end of the year.
“As a worldwide company we offer outstanding products that are well built and durable,” Roberts said. “The tech center will help take Comfort Solutions to the next level, providing us the capability to promote even higher standards while keeping us in front of industry issues such as flammability and designing environmentally safe products.”
July 18th, 2007
By: Furniture World Magazine
The Henredon Furniture store in Atlanta announced that is donating beds to the Women’s Resource Center to End Domestic Violence. The 14 Queen Platform Beds, with a retail value of more than $35,000, will help the local shelter provide assistance in transitioning survivors of domestic violence to independence.
“This is one small way Henredon can assist an organization that is committed to aiding women and children in need 365 days a year,” said Kenneth Haythe, Henredon store manager in Atlanta. “The Women’s Resource Center does exceptional work in our community. We hope Henredon’s donation of the beds will allow the shelter to immediately impact and help enhance the lives of the abused individuals that receive them.”
Based in Decatur, Ga., the Women’s Resource Center to End Domestic Violence has been supporting survivors of abuse for more than 20 years. Its first confidential “safehouse” opened in 1987. The organization now has the capacity to house up to 32 women and children before they can transition into a safe and productive living situation. Among its noteworthy programs, the shelter offers 24-hour peer-counseling support, safehouse screening, safety planning and referrals via its hotline.
“Many of the women who come to our safehouse were faced with the choice between homelessness and violence,” said Jean Douglas, executive director of the Women’s Resource Center to End Domestic Violence. “The safehouse provides a third alternative, and connects women with the resources and support necessary for them to build a stable and violence-free life for themselves and their children. Henredon’s generous gifts will help us continue our work. We greatly appreciate companies who choose to stand against violence in the home, and want to extend our gratitude to Henredon for its contribution to our cause.”
For more information about Henredon Furniture, visit www.henredon.com, and for more information about the Women’s Resource Center to End Domestic Violence, please visit www.wrcdv.org or call 404-370-7670.
July 18th, 2007
Johnson City, TN, July 17, 2007–Tarkett Wood, Inc., announces the following changes to its sales and marketing leadership team. Wendy McIlquham has joined Tarkett, leading the marketing and product development efforts for Tarkett Wood. Darrell Tweed will lead the Tarkett Wood sales organization for the Distribution channel.
Wendy McIlquham has joined Tarkett Wood as Marketing Director. Wendy brings more than 20 years of consumer products marketing experience to Tarkett Wood. In her career, Wendy has held domestic and international leadership positions across all facets of consumer products marketing, including Director of Brand Development at Norwalk Furniture and Executive Director of Product Management at American Greetings.
Darrell Tweed has been promoted to the position of Sales Director and Business Development Manager, Distribution Channel. Darrell joined Tarkett in 2001 as Sales and Marketing Manager for Tarkett Canada’s wood distribution business. In 2006 he joined Tarkett Wood as Product Director to lead Tarkett’s product offering evolution. Darrell has over 20 years of experience in the wood flooring industry with the majority of his time as an owner/manager of an independent wood flooring distributor he grew to a nationwide organization from a single site.
In addition to the leadership changes, the following changes have been made to the company’s distribution sales team:
Connie Eckert, Northeast Region Sales Manager
Connie, based in the Philadelphia area joined Tarkett Wood in May, 2007. Connie joined Tarkett in 2003 as National Residential Training Manager for sheet vinyl, FiberFloor & laminate. She took on training for hardwood in 2005. Prior to joining Tarkett, Connie spent 3 years with Mohawk as a Regional Sales Manager. She has over 12 years of industry experience. Connie serves Tarkett Wood’s distribution partners in the Northeast.
Chip Hamilton, Southeast Regional Sales Manager
Chip, who is based in Atlanta, Georgia, has over 20 years of experience in the hardwood flooring industry. He joined Tarkett Wood Floors in January 1993. Hamilton will be responsible for providing support and services for the distribution sales partners in the Southeast region.
Mark Jebo, Western Regional Sales Manager
Mark, based in the San Francisco Area, has been selling hardwood for 17 years. Mark has over 28 years of experience in the flooring industry prior to joining Tarkett Wood in 2003. Mark will serve distribution partners in the Western United States.
John Stopka, Midwest Regional Manager
Based in the Chicago area, John joined Tarkett Wood in June of this year. John has over 17 years of flooring industry experience, from creating new design concepts to logistics, installation and finishing for both wholesale and retail distribution channels. He will cover distribution partners in the central United States.
“These changes in our Sales and Marketing Leadership, coupled with the additions to our Sales Team, have added significant wood knowledge, distribution knowledge and overall industry experience, from which all of our customers will benefit. Having a singular focus on the development of our North American wood business and our Wood Industry customers will result in greater speed and flexibility to react to market trends and market demands. We are now well-positioned to deliver the service and market leadership our customers desire and the growth we desire for 2007 and 2008.”
July 18th, 2007
OREM, Utah–(BUSINESS WIRE)–MITY Enterprises, Inc. (“MITY”; NASDAQ: MITY) announced today that it was acquired by Sorenson Capital Partners, L.P. (Sorenson Capital) and Peterson Partners LP (Peterson Partners) via a merger with an affiliate of Sorenson Capital and Peterson Partners following the satisfaction of the closing conditions of the previously announced transaction agreement. Under the terms of the transaction, the holders of MITY common stock will receive $21.50 per share in cash for their shares.
The board of directors of MITY unanimously approved the merger prior to the announcement of the proposed acquisition on May 2, 2007. The Company’s shareholders approved the proposed merger agreement providing for the merger at a special meeting of shareholders held on June 26, 2007.
With the completion of the transaction, MITY’s common stock has been de-listed and will no longer trade publicly.
“We are excited to add MITY to our growing list of portfolio companies,” said Fraser Bullock, Co-Founder and a Managing Director of Sorenson Capital. “MITY has a great reputation in its industry and a wonderful workforce. We plan on building upon the wonderful foundation established by Greg Wilson and his team during the last twenty years.”
About MITY
Founded in 1987, MITY Enterprises, Inc. designs, manufactures and markets innovative institutional furniture created to meet the efficiency needs of its customers. MITY Enterprises focuses on providing premium quality institutional furniture products to niche markets. The product lines consist of multipurpose room furniture and healthcare seating. MITY’s products are marketed under the Mity-Lite, Broda and Versipanel tradenames. Headquartered in Utah, MITY Enterprises serves national and international customers directly and through distributors. For further information, visit MITY Enterprises online at www.mityinc.com.
About Sorenson Capital
Sorenson Capital (www.sorensoncapital.com) is a private equity fund that provides small- to middle-market buyout and growth equity investments with a particular focus on opportunities in selected states in the western U.S. Sorenson Capital is managed and controlled by West Rim Capital; both are headquartered in Salt Lake City, Utah with offices in Palo Alto, California and Phoenix, Arizona. Press Contact: David Parkinson (801) 284-7015 or david@sorensoncompanies.com.
About Peterson Partners
Peterson Partners, based in Salt Lake City, is one of the Intermountain West’s leading private equity firms. Specializing in small to mid-sized companies, Peterson Partners has a track record of success including investments in JetBlue, Making Memories, EnergySolutions, Asurion, Instashred, Winder Farms, 3form and Diamond Rental. Founded in 1995, Peterson Partners has over $300 million under management through four funds. Press Contact: Jordan Clements (801) 365-0180 or jordan@petersonpartnerslp.com.
July 18th, 2007
DEALS | Family sizes up sale of Woodard LLC
BY CHERYL V. JACKSON cjackson@suntimes.com
Henry Crown and Co., an investment firm controlled by Chicago’s wealthy Crown family, is considering selling outdoor furniture maker Woodard LLC.
The $4 billion clan, which has owned the company for about 20 years, is “in discussions with potential financial and operating partners to evaluate the strategic options for Woodard,” according to a written release made by Woodard Monday. Nothing has been finalized at this time, the company said.
The firm, which also has holdings in the Chicago Bulls, the New York Yankees, ski resorts and its bedrock business, Material Service Corp., is looking at its entire portfolio of operating businesses, and earlier this year got rid of most of its golf and theater operations.
According to the company release, all segments of Woodard are growing.
“The management team fully supports the Crown family during this process of evaluation,” President Dean Engelage said. “Woodard is well-positioned for continued growth and improvement.”
Chicago-based Woodard, a CC Industries Co., makes wrought-iron, aluminum and wicker outdoor furniture.
July 18th, 2007
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