- Revenue from continuing operations decreased 12.4% for quarter -
Comparable store sales decreased by 12.8% for quarter - Loss from
continuing operations ($6,852,000) versus ($1,815,000) for quarter
- Basic EPS and Diluted EPS ($0.97) versus ($0.26) for quarter -
Two additional Ashley Furniture HomeStores open - Related company
ceases operations WOODBURY, N.Y., Jan. 12 /PRNewswire-FirstCall/ --
Jennifer Convertibles, Inc. (NYSE Amex: JEN) announced today its
financial results for the first fiscal quarter ended November 28,
2009. For the first quarter, revenue from continuing operations
decreased by 12.4% to $23.2 million from the $26.5 million reported
for the same period last year. For the first quarter, the Company
had a net loss of $6,870,000, or ($0.97) per basic and diluted
share, compared to net loss of $1,869,000, or ($0.26) per basic and
diluted share for the same period last year. The net loss for the
period includes a provision for loss on amounts due from the
related company of $3,167,000 or ($0.45) per basic and diluted
share. For the first quarter, operating margins from continuing
operations decreased to 26.7% as a percentage of revenue from
continuing operations compared to 29.1% for the same period last
year. For the first quarter, selling, general and administrative
expenses from continuing operations increased by 3.7% to $9,649,000
from $9,308,000 reported for the same period last year. During each
of the thirteen-week periods ended November 28, 2009 and November
29, 2008, the Company closed one store in Peoria, Arizona and one
store in Lansing, Illinois, respectively. The operating results of
the closed store in Arizona were reported as discontinued
operations. The operating results of the closed store in Illinois
is recorded in continuing operations based on management's judgment
that there will be significant continuing sales to customers of the
closed store in other stores in the area. During the thirteen-week
periods ended November 28, 2009 and November 29, 2008, revenue from
the closed stores reported as discontinued operations amounted to
$20,000 and $223,000, respectively. Loss from operations of the
closed stores amounted to $18,000 and $54,000 for the thirteen-week
periods ended November 28, 2009 and November 29, 2008,
respectively. Harley J. Greenfield Chief Executive Officer of
Jennifer commenting on the results of the quarter said, "Obviously
we are not pleased with the write-offs of amounts due from the
related company, which impacted our results for the fourth and
first fiscal quarters and will impact our results to a lesser
extent in our second fiscal quarter. However, as I indicated
following year-end I believe this will result in a substantial
opportunity and be positive in the long-term for Jennifer. The
impact of the agreement with the related company is as follows: --
As of January 1, 2010 the related company ceased operations and we
began operating their stores for our benefit. -- We are in the
process of evaluating the potential for each of their 20 stores and
will begin negotiations with the landlords of those we wish to
keep. -- We have assumed all administrative functions within our
existing operation. -- Maybe most important, we will now be
operating as one company free of any appearance of potential
conflict. We continue to be pleased with the progress of our Ashley
Furniture HomeStores division. During the quarter, sales increased
by 31.5% to $3,815,000 from $2,901,000 in the same period last
year. Operating income increased by 51.4% to $168,000 from $111,000
last year. Same stores sales increased by 19.7 % during the period.
We opened two new stores during the quarter and are opening a new
store in Brooklyn before the end of January." Mr. Greenfield added,
"I am very positive about the future of Jennifer based on the
following: -- Our new extreme value merchandise in the Jennifer
division gives us a competitive advantage in this economy and seems
to be stabilizing sales. -- New stores from the related company
will add to revenue. -- Ashley Furniture HomeStores division is
growing rapidly." Jennifer Convertibles is the owner and licensor
of the largest group of sofabed specialty retail stores in the
United States, with 145 Jennifer Convertibles® stores and is the
largest specialty retailer of leather furniture with 14 Jennifer
Leather stores. Following the transaction with the related company,
as of January 12, 2010 the Company owned 159 stores and operated
four licensed Ashley Furniture HomeStores. Statements in this press
release other than the statements of historical fact are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements are
subject to certain risks and uncertainties, including changes in
retail demand, vendor performance and other risk factors identified
from time to time in the Company's filings with the Securities and
Exchange Commission that could cause actual results to differ
materially from any forward-looking statements. These
forward-looking statements represent the Company's judgment as of
the date of the release. The Company disclaims, however, any
interest or obligations to update these forward-looking statements.
JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES SUMMARY CONSOLIDATED
BALANCE SHEETS (IN THOUSANDS) 11/28/09 (UNAUDITED) 08/29/09
----------- -------- CASH AND CASH EQUIVALENTS $7,001 $5,609
RESTRICTED CASH 99 99 ACCOUNTS RECEIVABLE 2,634 1,816 MERCHANDISE
INVENTORIES, Net 8,232 9,076 DUE FROM RELATED COMPANY, Net of
Allowance for Losses 563 3,147 PREPAID EXPENSES AND OTHER CURRENT
ASSETS 1,098 1,214 ----- ----- 19,627 20,961 FIXTURES, EQUIPMENT
& LEASEHOLD IMPROVEMENTS, Net 2,264 2,355 GOODWILL 483 483
OTHER ASSETS 568 670 --- --- $22,942 $24,469 ======= =======
ACCOUNTS PAYABLE $16,942 $14,317 CUSTOMER DEPOSITS 8,247 4,976
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 5,437 6,001 DUE TO
RELATED COMPANY 500 400 DEFERRED RENT AND ALLOWANCES - Current
Portion 629 589 --- --- TOTAL CURRENT LIABILITIES 31,755 26,283
DEFERRED RENT AND ALLOWANCES, Net of Current Portion 2,238 2,360
OBLIGATIONS UNDER CAPITAL LEASES, Net of Current Portion 84 96 ---
--- TOTAL LIABILITIES 34,077 28,739 ------ ------ STOCKHOLDERS'
DEFICIENCY (11,135) (4,270) ------- ------ $22,942 $24,469 =======
======= JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA) (UNAUDITED) THIRTEEN WEEKS ENDED
-------------------- 11/28/09 11/29/08 -------- -------- REVENUE:
NET SALES $22,041 $24,980 REVENUE FROM SERVICE CONTRACTS 1,138
1,473 ----- ----- 23,179 26,453 ------ ------ COST OF SALES AND
OTHER CHARGES 16,996 18,764 SELLING, GENERAL & ADMINISTRATIVE
EXPENSES 9,649 9,308 PROVISION FOR LOSS ON AMOUNTS DUE FROM RELATED
COMPANY 3,167 - DEPRECIATION AND AMORTIZATION 222 244 --- ---
30,034 28,316 ------ ------ LOSS FROM OPERATIONS (6,855) (1,863)
INTEREST INCOME 9 54 INTEREST EXPENSE (4) (5) --- --- LOSS FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES (6,850) (1,814) INCOME
TAXES 2 1 --- --- LOSS FROM CONTINUING OPERATIONS (6,852) (1,815)
LOSS FROM DISCONTINUED OPERATIONS (18) (54) --- --- NET LOSS
$(6,870) $(1,869) ======= ======= BASIC AND DILUTED LOSS PER COMMON
SHARE: ---------------------------------------- LOSS FROM
CONTINUING OPERATIONS $(0.97) $(0.26) LOSS FROM DISCONTINUED
OPERATIONS - - --- --- NET LOSS $(0.97) $(0.26) ====== ====== BASIC
AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,073,466
7,073,466 ========= ========= DATASOURCE: Jennifer Convertibles,
Inc. CONTACT: Donald Radcliffe, Radcliffe & Associates,
+1-212-605-0201, http://investors.jenniferfurniture.com/
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