COPPELL, Texas, Feb. 16 /PRNewswire-FirstCall/ -- Craftmade
International, Inc. (OTCQX: CRFT) today reported the following
results for its fiscal 2010 second quarter ended December 31, 2009.
Second Quarter 2010 Consolidated Results Net income for the second
quarter increased by $563,000 to $18,000, as compared to a net loss
of $545,000 for the second quarter of 2009. On a fully diluted
basis, net income per share increased by $0.10 to less than $0.01
for the 2010 second quarter, compared to a net loss of $0.10 in the
year-ago quarter. Weighted average diluted shares outstanding
remained at 5,705,000 and did not change on a quarter-over-quarter
basis. Net sales for the quarter were $35,492,000 as compared to
$37,262,000 reported in the same quarterly period last year, a
decrease of $1,770,000, or 5%. The decrease was due to the reduced
sales in both Specialty and Mass segments, as a result of the
extreme decline in the housing market and dramatic overall economic
downturn experienced in the last year. "The extremely weak housing
market continues to adversely impact our operations as it has over
the last three years. Our breakeven results for the quarter
primarily resulted from the significant cost reductions we
implemented over the past several months in addition to the
synergies we created from the Woodard acquisition," commented J.
Marcus Scrudder, Craftmade's Chief Executive Officer. "Although we
cannot predict when the housing market will recover, it appears
that housing market conditions have begun to stabilize. We continue
to remain cautiously optimistic, however, as uncertain economic
conditions still exist." Gross Profit; Selling, General and
Administrative ("SG&A") Expense and Interest Expense Gross
profit of the Company as a percentage of net sales was 19.4% for
the quarter ended December 31, 2009, compared to 20.7% for the
prior year quarter. This change was primarily due to a decrease in
margins in the Specialty segment, which was partially offset by
increased margins in Mass, driven by margin improvements in
lighting. Total SG&A expenses of the Company decreased
$1,644,000 to $5,989,000, or 16.9%, of net sales for the quarter
ended December 31, 2009, compared to $7,633,000, or 20.5%, of net
sales for the same period last year. This 22% decrease in expenses
was due to significant cost cutting efforts across all categories,
including savings in salaries and wages and contract labor related
to headcount reductions, as well as lower advertising spending and
reductions in travel. Management expects to see continued
significant savings in SG&A expenses versus last year, due to
the continuing impact of the extensive cost cutting efforts noted
above, as well as the impact of moving the Company's stock listing
from NASDAQ to OTCQX and deregistering with the Securities and
Exchange Commission. Net interest expense decreased $43,000 to
$374,000 for the quarter ended December 31, 2009, compared to
$417,000 for the quarter ended December 31, 2008. This decrease was
primarily due to lower average debt balances than carried during
the same period last year, partially offset by higher average
borrowing rates. Net income attributable to noncontrolling interest
increased $42,000 to $234,000 for the six months ended December 31,
2009, from $192,000 for the same period in the previous year. The
increase in net income attributable to noncontrolling interest
resulted from higher profits at Design Trends as a result of
improved margins. Second Quarter 2010 Segment Results Net sales
from the Specialty segment were $14,933,000 for the quarter ended
December 31, 2009, compared to $15,958,000 for the quarter ended
December 31, 2008, a decrease of $1,025,000, or 6%. Sales of fans,
lighting-related products and outdoor furniture to the Specialty
channel continue to be affected by the extremely weak overall
housing market, a difficult credit environment and reduced consumer
spending. Net sales of the Mass segment were $20,559,000 for the
quarter ended December 31, 2009, compared to $21,304,000 for the
quarter ended December 31, 2008, a decrease of $745,000, or 4%. The
reduction in sales versus the prior year is primarily due to lower
sales in the lighting and accessory segments, while outdoor
furniture sales saw a slight increase versus the year-ago quarter.
"We've worked hard to strengthen our financial position, heading
into calendar 2010 to meet the continuing challenges of the housing
market and to emerge on the other side of this recession as a
stronger, leaner, and more efficient company," stated Mr. Scrudder.
"Despite the depressed economic environment, we've continued to do
an outstanding job of delivering quality products and services to
our customers, while reducing overhead costs. We thank our
employees for their tremendous efforts and our stockholders and
customers for their continued support during these challenging
times." For Craftmade's full Quarterly Report for the period ended
December 31, 2009, go to http://www.otcqx.com/, ticker symbol
"CRFT", and select "Filings." Founded in 1985, Craftmade
International, Inc. is engaged in the design, manufacturing,
distribution and marketing of a broad range of home decor products,
including proprietary ceiling fans, lighting products and outdoor
furniture. The Company distributes its premium products through a
network of independent showrooms and mass retail customers through
its headquarters and distribution facility in Coppell, Texas and
manufacturing plant in Owosso, Michigan. More information about
Craftmade International, Inc. can be found at
http://www.craftmade.com/. Various statements in this Press Release
or incorporated by reference herein, in future filings with OTCQX,
in press releases, and in oral statements made by or with the
approval of authorized personnel constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based on current
expectations and are indicated by words or phrases such as "may,"
"will," "should," "could," "might," "expects," "plans,"
"anticipates," "believes," "estimates," "projects," "predicts,"
"forecasts," "intends," "potential," "continue," and similar words
or phrases and involve known and unknown risks, uncertainties and
other factors which may cause actual results, performance or
achievements to be materially different from the future results,
performance or achievements expressed in or implied by such
forward-looking statements. These forward-looking statements
include statements or predictions regarding among other items:
revenues and profits; gross margin; customer concentration;
customer buying patterns; sales and marketing expenses; general and
administrative expenses; pricing and cost reduction activities;
income tax provision and effective tax rate; realization of
deferred tax assets; liquidity and sufficiency of existing cash,
cash equivalents, and investments for near-term requirements;
purchase commitments; product development and transitions;
competition and competing technology; outcomes of pending or
threatened litigation; and financial condition and results of
operations as a result of recent accounting pronouncements. These
forward-looking statements are based largely on expectations and
judgments and are subject to a number of risks and uncertainties,
many of which are beyond our control. Significant factors that
cause our actual results to differ materially from our expectations
are described in our Form 10-K under the heading of "Risk Factors."
We undertake no obligation to publicly update or revise these Risk
Factors or any forward-looking statements, whether as a result of
new information, future events or otherwise. CRAFTMADE
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data) (Unaudited) Three
Months Ended Six Months Ended ------------------ ----------------
December 31, December 31, December 31, December 31, ------------
----------- ------------ ------------ 2009 2008 2009 2008 ---- ----
---- ---- Net sales $35,492 $37,262 $56,540 $67,427 ---------
------- ------- ------- ------- Cost of goods sold (28,606)
(29,556) (43,838) (51,251) ------------- ------- ------- -------
------- Gross profit 6,886 7,706 12,702 16,176 ------------ -----
----- ------ ------ Gross profit as a percentage of net sales 19.4%
20.7% 22.5% 24.0% ---------------- ---- ---- ---- ---- Selling,
general and administrative expenses (5,989) (7,633) (11,864)
(15,530) ---------------- ------ ------ ------- -------
Depreciation and amortization (254) (262) (517) (500)
---------------- ---- ---- ---- ---- Total operating expenses
(6,243) (7,895) (12,381) (16,030) --------------- ------ ------
------- ------- Income (loss) from operations 643 (189) 321 146
---------------- --- ---- --- --- Interest expense, net (374) (417)
(717) (776) ------------- ---- ---- ---- ---- Other income
(expense) - (4) - 1 ------------ --- --- --- --- Income (loss)
before income taxes 269 (610) (396) (629) -------------- --- ----
---- ---- Income tax (expense) benefit (17) 257 271 308 ----------
--- --- --- --- Net income (loss) 252 (353) (125) (321) ----------
--- ---- ---- ---- Less: Net income attributable to noncontrolling
interest (234) (192) (452) (353) ---------------- ---- ---- ----
---- Net income (loss) attributable to Craftmade International $18
$(545) $(577) $(674) ---------------- === ===== ===== =====
Weighted average common shares outstanding: ---------------- Basic
5,705 5,705 5,705 5,705 ----- ----- ----- ----- ----- Diluted 5,705
5,705 5,705 5,705 ------- ----- ----- ----- ----- Basic loss per
common share $0.00 $(0.10) $(0.10) $(0.12) -------------- =====
====== ====== ====== Diluted loss per common share $0.00 $(0.10)
$(0.10) $(0.12) ---------------- ===== ====== ====== ======
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (In thousands) December 31, June 30, 2009 2009 ---- ----
ASSETS (Unaudited) Current assets Cash $131 $384 Accounts
receivable, net 35,970 25,290 Inventories, net 20,519 20,563 Income
taxes receivable 1,191 1,780 Deferred income taxes 1,342 1,367
Prepaid expenses and other current assets 2,544 2,443 ----- -----
Total current assets 61,697 51,827 ------ ------ Property and
equipment, net 10,841 11,141 Goodwill 15,409 14,947 Other
intangibles, net 1,003 1,097 Other assets 2,240 1,856 ----- -----
Total non-current assets 29,493 29,041 ------ ------ Total assets
$91,190 $80,868 ======= ======= LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities Book overdrafts $- $8 Accounts payable
13,629 7,231 Other accrued expenses 1,814 2,422 Current portion of
long-term obligations 834 542 --- --- Total current liabilities
16,277 10,203 ------ ------ Non-current liabilities Long-term
obligations 34,219 29,886 Deferred income taxes 1,127 1,122 -----
----- Total non-current liabilities 35,346 31,008 ------ ------
Total liabilities 51,623 41,211 ------ ------ Stockholders' equity
Craftmade International stockholders' equity: Common stock, $0.01
par value, 15,000,000 shares authorized; 10,204,420 shares issued
102 102 Additional paid-in capital 22,370 22,335 Retained deficit
51,237 51,814 Less: treasury stock, 4,499,920 common shares at cost
(38,126) (38,126) ------- ------- Total Craftmade International
stockholders' equity 35,583 36,125 ------ ------ Noncontrolling
interest 3,984 3,532 ----- ----- Total equity 39,567 39,657 ------
------ Total liabilities and stockholders' equity $91,190 $80,868
======= ======= DATASOURCE: Craftmade International, Inc. CONTACT:
C. Brett Burford, Chief Financial Officer, or Ric DeCastro,
Investor Relations, both of Craftmade International, Inc.,
+1-972-393-3800, Web Site: http://www.craftmade.com/
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