Net Sales Grew 59%- Market for
School Furniture in Strong Recovery - Forward Indicator of Shipments + Backlog at
Three-Year High U.S. Factories, Vertical Model Deliver Superior On-Time Customer Service, Shorten Order-to-Cash Cycle- Reliance on Seasonal Debt at Three-Year Low
Reflecting a strong recovery in the market for school furniture,
The Company’s preferred forward-looking indicator is “Shipments + Backlog,” which the Company defines as actual year-to-date net sales on a given date for the current fiscal year plus the un-shipped backlog that is expected to be recognized within that same fiscal year from customers that have already placed orders at confirmed prices and service terms. Recognizing that year-over-year comparisons to last year’s pandemic might not provide sufficient perspective, management looked back an additional year for comparison to more “normal” market conditions. The following chart shows three years of Shipments + Backlog at
Shipments + Backlog at | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
$ | 107,334,000 | $ | 84,050,000 | $ | 99,396,000 |
In addition to robust levels of business activity, the Company has also achieved iterative efficiencies in its vertical business model. These have been highlighted by current stresses in global supply chains. The speed and flexibility with which the Company can convert low-cost raw materials into higher-value customer-specified finished goods, combined with the precise demand visibility provided by direct relationships with public and private schools, has allowed the Company to reduce its dependence on debt-financed inventory compared to prior years while still providing superior on-time delivery. Borrowings under the Company’s seasonal revolving debt facility are approximately half of last year’s level despite the significant increase in business activity. Management believes these efficiencies will persist through the current delivery season and perhaps into future years.
Here are the numbers for the first quarter ended:
Three Months Ended | ||||||||||||
(In thousands, except per share data) | ||||||||||||
Net sales | $ | 28,367 | $ | 17,817 | ||||||||
Cost of sales | 20,679 | 12,913 | ||||||||||
Gross profit | 7,688 | 4,904 | ||||||||||
Selling, general and administrative expenses | 11,983 | 11,931 | ||||||||||
Operating loss | (4,295 | ) | (7,027 | ) | ||||||||
Pension expense | 506 | 542 | ||||||||||
Interest expense, net | 293 | 404 | ||||||||||
Loss before income taxes | (5,094 | ) | (7,973 | ) | ||||||||
Income tax benefits | (1,185 | ) | (3,275 | ) | ||||||||
Net loss | $ | (3,909 | ) | $ | (4,698 | ) | ||||||
Net loss per share - basic | $ | (0.25 | ) | $ | (0.30 | ) | ||||||
Net loss per share – diluted (a) | $ | (0.25 | ) | $ | (0.30 | ) | ||||||
Weighted average shares outstanding - basic | 15,824 | 15,654 | ||||||||||
Weighted average shares outstanding – diluted (a) | 15,824 | 15,654 | ||||||||||
(a) Net loss per share was calculated based on basic shares outstanding due to the anti-dilutive effect on the inclusion of common stock equivalent shares. | ||||||||||||
Current assets | $ | 59,988 | $ | 69,020 | $ | 50,967 | ||||||
Non-current assets | 73,684 | 82,472 | 74,069 | |||||||||
Current liabilities | 29,642 | 42,386 | 22,106 | |||||||||
Non-current liabilities | 53,172 | 58,387 | 48,743 | |||||||||
Stockholders' equity | 50,858 | 50,719 | 54,187 | |||||||||
Reflecting on the First Quarter’s results,
“The habits of hunkering down are hard to break. We’re seeing that now in the unreliable performance of global supply chains. Some of our own materials and components have also been impacted, but we are fortunate, because of our commitment to our own
“We are very busy, and our employees are earning double-pay for every hour of overtime. We expect to be busy through year-end as the continuing stream of school recovery money makes its way through the system. We thank our employees for their stoutness through a very challenging time, and our shareholders for their conviction in our market and our business model.”
“We often say we’re at our best when we’re challenged. This past year has proven that. To generate positive cash flows during the pandemic and then continue that improvement as the recovery gains speed is gratifying. We’re now seeing the financial benefits of many years’ refinement of our vertical business model. We’re also proud to be part of the nationwide effort to reopen schools and get students back in the classroom, where we think they receive the most balanced learning experience.”
Contact:
(310) 533-0474
Non-GAAP Financial Information
This press release includes a statement of the percentage change in shipments plus unshipped backlog through
Statement Concerning Forward-Looking Information
This news release contains “forward-looking statements” as defined by the Private Securities Reform Act of 1995. These statements include, but are not limited to, statements regarding: the impact of the COVID-19 pandemic on our business, customers, competitors, supply chain and workforce; the anticipated recovery of our customers from COVID-19 and re-opening of school districts; business strategies; market demand and product development; estimates of unshipped backlog; order rates and trends in seasonality; product relevance; economic conditions and patterns; the educational furniture industry including the domestic market for classroom furniture; state and municipal bond and/or tax funding; the rate of completion of bond funded construction projects; cost control initiatives; absorption rates; the relative competitiveness of domestic vs. international supply chains; trends in shipping costs; use of temporary workers; marketing initiatives; and international or non K-12 markets. Forward-looking statements are based on current expectations and beliefs about future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are out of our control and difficult to forecast. These factors may cause actual results to differ materially from those that are anticipated. Such factors include, but are not limited to: uncertainties surrounding the severity, duration and effects of the COVID-19 pandemic; changes in general economic conditions including raw material, energy and freight costs; state and municipal bond funding; state, local, and municipal tax receipts; order rates; the seasonality of our markets; the markets for school and office furniture generally, the specific markets and customers with which we conduct our principal business; the impact of cost-saving initiatives on our business; the competitive landscape, including responses of our competitors and customers to changes in our prices; demographics; and the terms and conditions of available funding sources. See our Annual Report on Form 10-K for the year ended
Source:
2021 GlobeNewswire, Inc., source