Bush Industries Reports Third Quarter Results JAMESTOWN, N.Y., Nov.
11 /PRNewswire-FirstCall/ -- Bush Industries, Inc. , a leading
manufacturer of ready-to-assemble furniture, case goods furniture
and a supplier of surface technologies, released its third quarter
and nine-month financial results for the period ended September 27,
2003. Third Quarter Results Net sales for the third quarter were
$79.0 million, in line with the Company's previous guidance of $78
million to $82 million. Net sales for the 2003 third quarter
decreased approximately 6.4 percent compared with $84.4 million in
last year's third quarter. The Company reported a net loss of $3.6
million, or a loss of $0.26 per diluted share, compared with the
Company's guidance of a fully diluted earnings per share (EPS) loss
of $0.25 to $0.28. This compared to net income of $492,000, or
$0.04 per diluted share in the same quarter for the previous year.
Included in the 2003-third quarter results were losses per share of
$0.08 [including $0.01 for cost reduction initiative] at Bush
Technologies, $0.08 [including $0.02 for cost reduction initiative]
at Bush Furniture Europe and $0.10 [including $0.02 for cost
reduction initiative] at Bush Furniture North America. Results at
Bush Technologies were impacted by sales that were lower than
expected, while Bush Furniture Europe results were in line with
expectations. Results at Bush Furniture North America include costs
associated with multiple new product rollouts of $0.03 per share to
support the Company's planned strategic initiatives and costs
related to the Company's refinancing efforts of $0.04 per share.
"As a result of the third quarter performance, we are continuing to
take aggressive actions toward further controlling our costs. Our
objective throughout 2003 has been to restructure the Company to
meet the needs of the changing markets that we participate in. We
have and are continuing to take clear action to support this
objective. Recently, we undertook an immediate downsizing effort at
Bush Technologies to reduce expenses because of current market
conditions. Furthermore, we are intensifying our efforts to
identify and implement cost reductions on a company-wide basis to
position Bush for the future," stated Paul Bush, chairman and chief
executive officer. Mr. Bush continued, "We are encouraged by the
activities of our largest business segment, our North America
Furniture division. We are gaining momentum through our new
initiatives that are starting to bear fruit and expect the current
overall improved sales trends to continue into the fourth quarter,
and more significantly, into next year." Nine-Month Results For the
first nine months of 2003, net sales were $224.7 million compared
with $251.7 million in the same period last year. The Company
reported a net loss of $16.7 million, or $1.21 per diluted share
for the 2003 nine-month period, compared with a net loss of
$272,000, or $0.02 per diluted share last year. The 2003 nine-month
results include a charge of approximately $11.5 million net of
income taxes ($17.1 million pre-tax), or $0.83 per diluted share
associated with its cost reduction initiative. The 2002 nine-month
results include a charge for the cumulative effect of accounting
change of approximately $2.4 million or $0.17 per diluted share for
the impairment of goodwill attributed to the Company's German
operations. Bank Debt/Lending Agreement The Company's debt
increased by $16.5 million to $131.4 million, compared with $114.9
million at the end of the 2003-second quarter primarily as a result
of an increase in accounts receivable that was a consequence of
Bush Furniture North America and Bush Technologies not selling
certain of their accounts receivable. The bank debt is now
classified under current liabilities on the Company's balance sheet
due to the fact that Bush's existing bank agreement expires on June
30, 2004. Bush has received temporary waivers from its lenders
regarding non-compliance with its covenants through March 1, 2004.
This will facilitate and allow the Company the additional time to
pursue its two-continent financing arrangements. Divisional
Highlights Select highlights by division: -- Bush Furniture North
America (BFNA): 1. Under the Eric Morgan case goods initiative,
BFNA is making inroads in the home furnishings channel. Several new
product lines in bedroom, home entertainment and home office were
introduced during the quarter. 2. New commercial office line
products were placed at both the office superstore and the
commercial office dealer channels. Additionally, several new
S.O.H.O. product lines were introduced and are being tested by the
office superstores. 3. At the electronic and office superstores,
BFNA launched new lines of products for digital and plasma
televisions, among other items. These new product lines continue to
strengthen the Company's offerings to its retail partners. 4.
During the third quarter, BFNA developed import items and lines
that will compliment its domestic laminate offerings, allowing the
Company to provide a full assortment and be a total supplier to its
retail partners. 5. BFNA accelerated shipments of new product to
its original equipment manufacturer partners. -- Bush Furniture
Europe (BFE): At its annual September furniture show, BFE
introduced Caradom, a new line of furniture products for the
healthcare industry; an expanded line of young living and home
entertainment product offerings; and two new professional office
furniture product lines. All of BFE's new product offerings were
well received by the Company's customers. -- Bush Technologies
(BT): BT experienced significantly lower than expected sales during
the 2003 third quarter due to lower than anticipated cell phone
sales by one of its OEM partners, which subsequently reduced the
amount of decorative faceplates sold. As a result, the Company took
immediate actions to down size the division, primarily through
reductions in personnel. Guidance for Remainder of 2003 "The
Company currently expects sales in the fourth quarter to be in a
range of $83 million to $88 million, with sequential sales growth
primarily from our North American Furniture operations, resulting
from our specific market initiatives. We anticipate a fully diluted
consolidated earnings per share (EPS) loss of $0.47 to $0.53 for
the fourth quarter. This loss would be inclusive of costs which
relate to obtaining the bank waivers and our financing efforts
($0.15 to $0.17 EPS) and to our previously announced 2003 cost
reduction initiative ($0.07 EPS) which will be basically completed
by the end of 2003. The balance of the loss is primarily from Bush
Furniture Europe (BFE) and Bush Technologies (BT). BFE's loss
results from the completion of the previously announced
consolidation of facilities, reduction of personnel, and the impact
of its planned vacation shutdown in the fourth quarter. BT's loss
is reflective of lower sales levels that are a result of reduced
cell phone sales that utilize our decorated faceplates. BFNA, while
anticipated to experience sequential sales growth from the
Company's specific initiatives outlined earlier, will be impacted
by further costs connected with our new multiple product rollouts.
As part of our cost saving measures, we are evaluating several
other alternatives. After we complete our evaluation, we may incur
an additional $0.25 to $0.30 per share of non-cash charges.
Additionally, we will be assessing the carrying value of our
goodwill under SFAS No. 142 and the carrying value of our other
long-term assets. If there is a resultant charge in the fourth
quarter, it would be non-cash in nature. We realize that the extent
and resultant impact of our actions are disappointing in the short
term, but taking these actions now should better position the
Company as we move forward into 2004," concluded Paul Bush.
Conference Call The management of Bush will host a conference call
on Wednesday, November 12, 2003 at 11:00 a.m. ET to discuss third
quarter results. Those who wish to participate on the conference
call may do so by calling the toll-free number 888-566-5907
approximately 15 minutes prior to the 11:00 a.m. ET starting time.
A replay of the call in its entirety will be available by telephone
for seven days following completion of the live call, at
800-964-3814. The password for the live call is 2874 and the
leader's name is Don Hauck. The conference call will also be
webcast simultaneously over the Internet through Investor Broadcast
Network's Vcall web site, which can be accessed at
http://www.vcall.com/, and will be rebroadcast by Vcall through
Wednesday, November 19, 2003. Additional financial and/or
statistical information can be accessed at our web site,
http://www.bushindustries.com/ listed under the "About Us - Press
Release" section. Bush Industries, Inc. is a leading global
manufacturer of ready-to- assemble furniture, casegoods furniture,
and a supplier of surface technologies. The Company operates its
business in three segments: Bush Furniture North America, which
concentrates on furniture for the commercial office, home office,
home entertainment, bedroom and other home furnishings distributed
by leading retailers; Bush Furniture Europe, which sells
commercial, home office and other furnishings in the European
market; and Bush Technologies, which is focused on decorated face
plates for cell phones, as well as the utilization of surface
technologies in diverse applications such as automotive interiors,
cosmetics, sporting goods and consumer electronics. Bush operates
several manufacturing and warehouse facilities throughout North
America and Europe. BUSH INDUSTRIES, INC. AND SUBSIDIARIES
Financial Highlights (Unaudited) The following data sets forth
certain condensed consolidated statement of operations information
for the third quarter and nine-month period of 2003 and 2002: For
the Three For the Nine Months Ended Months Ended 9/27/03 9/28/02
9/27/03 9/28/02 (In Thousands Except Per Share Data) Net Sales
$79,004 $84,411 $224,697 $251,672 Costs and Expenses: Cost of Sales
60,237 62,333 177,505 182,457 Selling, General, and Administrative
21,563 19,220 57,079 60,002 Interest 1,953 1,904 5,602 5,490
Restructuring 993 0 9,671 0 84,746 83,457 249,857 247,949 (Loss)
Earnings Before Income Taxes and Cumulative Effect of Accounting
Change (5,742) 954 (25,160) 3,723 Income Tax Benefit (Expense)
2,099 (462) 8,482 (1,597) (Loss) Earnings Before Cumulative Effect
of Accounting Change (3,643) 492 (16,678) 2,126 Cumulative Effect
of Accounting Change 0 0 0 (2,398) Net (Loss) Earnings ($3,643)
$492 ($16,678) ($272) Basic (Loss) Earnings Per Share: Before
Cumulative Effect of Accounting Change ($0.26) $0.04 ($1.21) $0.15
Cumulative Effect of Accounting Change 0 0 0 (0.17) Net Earnings
(Loss) ($0.26) $0.04 ($1.21) ($0.02) Diluted Earnings (Loss) Per
Share: Before Cumulative Effect of Accounting Change ($0.26) $0.04
($1.21) $0.15 Cumulative Effect of Accounting Change 0 0 0 (0.17)
Net (Loss) Earnings ($0.26) $0.04 ($1.21) ($0.02) Weighted Average
Shares Outstanding: Basic 13,824 13,842 13,827 13,813 Diluted
13,824 13,857 13,827 14,037 Other Sales and Earnings Information
(In Thousands): For the Three For the Nine Months Ended Months
Ended 9/27/03 9/28/02 9/27/03 9/28/02 Net Sales To External
Customers: Bush Furniture North America $61,499 $68,284 $166,057
$198,282 Bush Furniture Europe 14,103 10,124 46,304 38,667 Bush
Technologies 3,402 6,003 12,336 14,723 Consolidated Net Sales
$79,004 $84,411 $224,697 $251,672 Segment Earnings (Loss) Before
Income Taxes and Cumulative Effect of Accounting Change: Bush
Furniture North America ($1,832) $2,827 ($3,430) $8,715 Bush
Furniture Europe (1,264) (1,404) (1,462) (2,999) Bush Technologies
(1,653) (469) (3,141) (1,993) (4,749) 954 (8,033) $3,723 Inventory
Write Down Charge 0 0 (7,456) 0 Restructuring (993) 0 (9,671) 0
Consolidated Earnings (Loss) Before Income Taxes and Cumulative
Effect of Accounting Change $(5,742) $954 $(25,160) $3,723 Certain
Consolidated Balance Sheet Data (In Thousands): 9/27/03 12/28/02
Cash and Cash Equivalents $4,152 $2,729 Trade Receivables 26,948
16,544 Inventories 55,211 56,204 Total Current Assets 98,697 86,145
Property, Plant & Equipment (Net) 187,093 196,922 Total Assets
314,107 310,105 Current Liabilities $178,491 $51,344 Long-Term Debt
3,230 100,223 Total Liabilities 195,889 174,020 Stockholders'
Equity 118,218 136,085 Total Liabilities and Stockholders' Equity
314,107 310,105 Other Key Financial Data (In Thousands): For the
Three For the Nine For Full Months Ending Months Ending Year Ending
9/27/03 9/28/02 9/27/03 9/28/02 12/28/02 Depreciation and
Amortization 4,769 4,828 14,368 14,772 20,053 Capital Expenditures
1,059 1,300 2,373 4,412 5,533 Certain statements and information
included in this press release constitute "forward-looking
statements" within the meaning of the Federal Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties, which may cause the
Company's actual results in future periods to differ materially
from forecasted results. Forward-looking statements include
statements regarding the intent, belief, projected or current
expectations of the Company or its Officers (including statements
preceded by, followed by or including forward- looking terminology
such as "may," "will," "should," "believe," "expect," "anticipate,"
"estimate," "continue" or similar expressions or comparable
terminology), with respect to various matters. The Company cannot
guarantee future results, industry trends, levels of activity,
performance or achievements. Factors that could cause or contribute
to such differences include, but are not limited to, economic,
competitive, governmental and technological factors affecting the
Company's operations, markets, products, services and prices,
changes in estimates regarding the Company's future contractual
obligations, and other factors discussed in the Company's filings
with the Securities and Exchange Commission (the "SEC"). Copies of
the Company's SEC filings are available from the SEC or may be
obtained upon request from the Company. The Company does not
undertake any obligation to update the information contained
herein, which speaks only as of this date. DATASOURCE: Bush
Industries, Inc. CONTACT: Jeffrey O'Keefe of The Global Consulting
Group, +1-646-284-9423, for Bush Industries, Inc.; or Donald Hauck,
Sr. Vice President of Bush Industries, Inc., +1-716-665-2510, Ext.
3509 Web site: http://www.bushindustries.com/
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