- Revenue from continuing operations decreased 25.6% for quarter,
21.6% year-to-date - Comparable store sales decreased by 25.2% for
quarter, 24.2% year-to-date - Loss from continuing operations
$5,262,000 versus $777,000 for quarter, $10,765,000 versus
$2,994,000 year to date - Basic and Diluted EPS ($0.74) versus
($0.12) for quarter, ($1.55) versus ($0.47) year to date -
Substantial growth in Ashley Furniture Homestores Division
WOODBURY, N.Y., Dec. 14 /PRNewswire-FirstCall/ -- Jennifer
Convertibles, Inc. (AMEX:JEN) announced today its financial results
for the fourth quarter and fiscal year ended August 29, 2009. For
the fourth quarter, revenue from continuing operations decreased by
25.6% to $22,818,000 from the $30,670,000 reported for the same
period last year. For the fiscal year 2009, revenue from continuing
operations decreased 21.6% to $94,177,000 from the $120,131,000
reported in the same period last year. For the fourth quarter, the
net loss was $5,263,000 or ($0.74) per basic and diluted share,
compared to net loss of $867,000 or ($0.12) per basic and diluted
share, for the same period last year. For the fiscal year 2009, the
net loss was $11,008,000 or ($1.55) per basic and diluted share,
compared to net loss of $3,329,000 or ($0.47) per basic and diluted
share, for the same period last year. The net losses for fiscal
2009 include charges incurred during the fourth quarter totaling
$3,414,000 related to impairment of goodwill, provisions for a
potential legal settlement and provisions for losses in connection
with amounts due from the related company. For the fourth quarter,
operating margins from continuing operations decreased to 29.8%
compared to 31.0% the same period last year. For the twelve-month
period operating margins from continuing operations decreased to
28.9% compared to 29.4% for the same period last year. For the
fourth quarter, selling, general, and administrative expenses from
continuing operations increased to 37.0% as a percentage of revenue
from continuing operations compared to 32.9% for the same period
last year. For the twelve-month period, selling, general and
administrative expenses from continuing operations increased to
35.5% compared to 31.4% for the same period last year. During the
fourth quarter, the Company did not close any stores. During fiscal
2009, the Company closed seven stores of which the operating
results of three stores were reported in discontinued operations.
Loss from discontinued operations was $1,000 and $90,000 in the
fourth quarter of fiscal 2009 and 2008, respectively. For the
twelve-month periods for fiscal 2009 and 2008, loss from
discontinued operations amounted to $243,000 and $335,000,
respectively. Commenting on the results of the year, Harley J
Greenfield, Chief Executive Officer of Jennifer said, "Fiscal 2009
was a challenging year for the Company as the difficulties in the
economy impacted the home furniture industry particularly hard. As
a result during the fourth fiscal quarter we incurred several
events, which significantly impacted our results. Due to the
decline in the operating performance of stores in the Chicago and
Florida markets we recognized an impairment of goodwill of
$1,167,000 during the period. Although this impacts our balance
sheet and income statement it has no operational or cash flow
implications. Of more significance long term is the termination of
the Purchasing Agreement with the related company due to their
failure to make payments to us. We have established a reserve of
$947,000 as of August 29, 2009 against potential losses on amounts
due from the related company as of August 29, 2009. We also expect
to establish substantial reserves for the first quarter of fiscal
2010 relating to amounts, which become due from the related company
subsequent to August 29, 2009 and prior to the termination of the
purchasing agreement in late November. We have taken steps as of
November 27, 2009, which we believe will ensure that we will incur
minimal further losses on any additional products shipped to
customers of the related company. We are in negotiations with the
related company to resolve these issues. I believe the results of
these negotiations should have a positive long-term benefit to
Jennifer and should create an opportunity to generate additional
revenue. Additionally during the fourth quarter we established a
reserve of $1,300,000 for a class action lawsuit for alleged
violations of California Labor Law. We are vigorously defending
this matter." Mr. Greenfield added, "We are very pleased with the
progress of our Ashley Furniture Homestores division. During the
year it generated $12.8 million or more than 13% of our revenue and
generated income before income taxes of about $1.3 million, a 42.6%
increase from the prior fiscal year. Since year-end we have opened
two additional Ashley Furniture Homestores, have announced the
opening of a fifth location in January and our currently
negotiating for additional stores to be opened before the end of
the fiscal year. Recently we have seen an increase in revenues in
our existing Ashley Furniture Homestores locations and our new
stores have opened and are performing as projected. We are also
beginning to see some stabilization in our Jennifer stores.
Capitalizing on our new line of extreme value merchandise, we
expect to see improvement in our Jennifer division as well in
2010." Jennifer Convertibles is the owner and licensor of the
largest group of sofabed specialty retail stores in the United
States, with 148 Jennifer Convertibles stores and is the largest
specialty retailer of leather furniture with 14 Jennifer Leather
stores. As of December 14, 2009, the Company owned 141 stores and
licensed 21 stores (including 19 owned and operated by a related
company on a royalty free basis) and operates four licensed Ashley
Furniture HomeStores. Statements in this press release other than
the statements of historical fact are "forward-looking statements."
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) 08/29/09 08/30/08 -------- --------
CASH AND CASH EQUIVALENTS $5,609 $9,057 RESTRICTED CASH 99 1,116
ACCOUNTS RECEIVABLE 1,816 779 MERCHANDISE INVENTORIES, Net 9,076
10,646 DUE FROM RELATED COMPANY, Net of Allowance for Loss 3,147
4,063 PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,214 1,508 -----
----- 20,961 27,169 MARKETABLE AUCTION RATE SECURITIES - 1,400
FIXTURES, EQUIPMENT & LEASEHOLD IMPROVEMENTS, Net 2,355 3,202
GOODWILL 483 1,650 OTHER ASSETS 670 691 --- --- $24,469 $34,112
======= ======= ACCOUNTS PAYABLE $14,317 $12,932 CUSTOMER DEPOSITS
4,976 6,493 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 6,001
3,892 DUE TO RELATED COMPANY 400 400 DEFERRED RENT AND ALLOWANCES -
Current Portion 589 634 --- --- TOTAL CURRENT LIABILITIES 26,283
24,351 DEFERRED RENT AND ALLOWANCES - Net of Current Portion 2,360
2,905 OBLIGATIONS UNDER CAPITAL LEASES - Net of Current Portion 96
139 --- --- TOTAL LIABILITIES 28,739 27,395 ------ ------
STOCKHOLDERS' EQUITY (4,270) 6,717 ------ ----- $24,469 $34,112
======= ======= JENNIFER CONVERTIBLES, INC. & SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT
SHARE DATA) THREE MONTHS ENDED TWELVE MONTHS ENDED 08/29/09
08/30/08 08/29/09 08/30/08 -------- -------- -------- --------
REVENUE: NET SALES $21,570 $28,905 $88,845 $113,073 REVENUE FROM
SERVICE CONTRACTS 1,248 1,765 5,332 7,058 ----- ----- ----- -----
22,818 30,670 94,177 120,131 ------ ------ ------ ------- COST OF
SALES AND OTHER CHARGES 16,014 21,175 67,006 84,838 SELLING,
GENERAL & ADMINISTRATIVE EXPENSES 8,438 10,086 33,432 37,777
IMPAIRMENT OF GOODWILL 1,167 - 1,167 - PROVISION FOR LOSS RELATED
TO LITIGATION 1,300 - 1,300 - PROVISION FOR LOSS ON AMOUNTS DUE
FROM RELATED COMPANY 947 - 947 - DEPRECIATION AND AMORTIZATION 215
247 1,151 1,005 28,081 31,508 105,003 123,620 ------ ------ -------
------- LOSS FROM OPERATIONS (5,263) (838) (10,826) (3,489)
INTEREST INCOME 9 70 89 521 INTEREST EXPENSE (5) (5) (19) (16) ---
--- --- --- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
(5,259) (773) (10,756) (2,984) INCOME TAXES 3 4 9 10 --- --- ---
--- LOSS FROM CONTINUING OPERATIONS (5,262) (777) (10,765) (2,994)
LOSS FROM OPERATIONS OF DISCONTINUED OPERATIONS (1) (90) (243)
(335) --- --- ---- ---- NET LOSS $(5,263) $(867) $(11,008) $(3,329)
======= ===== ======== ======= BASIC AND DILUTED LOSS PER COMMON
SHARE: LOSS FROM CONTINUING OPERATIONS $(0.74) $(0.11) $(1.52)
$(0.43) LOSS FROM DISCONTINUED OPERATIONS - (0.01) (0.03) (0.04)
--- ----- ----- ----- NET LOSS PER COMMON SHARE $(0.74) $(0.12)
$(1.55) $(0.47) ====== ====== ====== ====== BASIC AND DILUTED
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,073,466 7,073,466
7,073,466 7,073,466 ========= ========= ========= =========
DATASOURCE: Jennifer Convertibles, Inc. CONTACT: Donald Radcliffe,
Radcliffe & Associates, +1-212-605-0201
Copyright