Jennifer Convertibles Reports Third Quarter Results

WOODBURY, N.Y., July 12, 2011 /PRNewswire/ --  Jennifer Convertibles, Inc. (www.jenniferfurniture.com) announced today its financial results for the third quarter ended May 28, 2011.

For purposes of this press release the results of operations have been combined for the period from August 29, 2010 to February 26, 2011 of the Predecessor Company with the period from February 26, 2011 to May 28, 2011 of the Successor Company. The combined results of operations for the thirty-nine weeks ended May 28, 2011 are compared to the corresponding periods in the prior year.  References to Jennifer Convertibles as the "Successor Company" and "Predecessor Company" in this release pertain to Jennifer Convertibles (a) on the close of business on February 26, 2011 and thereafter and (b) periods prior thereto, respectively.  

For the third quarter, revenue from continuing operations increased by 1.2% to $19,005,000 from $18,781,000 for the same period last year.  For the nine-month period, revenue from continuing operations decreased 3.6% to $54,271,000 from $56,313,000 for the same period last year.  

For the third quarter, net loss was ($1,953,000) or ($1.95) per basic and diluted share, compared to net loss of ($4,775,000) or ($0.68) per basic and diluted share, for the same period last year.  For the nine-month period, net income was $26,763,000, compared to net loss of ($18,058,000) for the same period last year.

For the third quarter, operating margins from continuing operations increased to 28.0% compared to 25.4% for the same period last year. For the nine-month period operating margins from continuing operations remained the same at 26.3% compared to 26.3% for the same period last year.

For the third quarter, selling, general, and administrative expenses from continuing operations decreased to 36.0% as a percentage of revenue from continuing operations compared to 43.9% for the same period last year. For the nine-month period, selling, general and administrative expenses from continuing operations decreased to 37.1% compared to 41.4% for the same period last year.

Reorganization items, net were ($4,000) and $0 in the third quarter of fiscal 2011 and 2010, respectively.  For the nine-month period, reorganization items, net were $33,374,000 compared to $0 for the same period last year. Reorganization items consist of a gain on discharge of debt, legal and other professional fees for bankruptcy services and fair value adjustments.

Income (loss) from operations of discontinued operations was $0 and ($1,100,000) in the third quarter of fiscal 2011 and 2010, respectively.  For the nine-month periods for fiscal 2011 and 2010, income (loss) from discontinued operations amounted to $62,000 and ($2,384,000), respectively.

Rami Abada, President of Jennifer, commenting on the results of the third fiscal quarter said, "While we were not profitable for the third quarter much of it can be attributed to residual effects from the previous nine months in bankruptcy, as well as the time needed to transition the emerging company to a vibrant entity."

Mr. Abada added, "We are at various stages of implementation of many new initiatives including but not limited to new products, new vendors, new marketing campaigns and some more efficient supply chains.  We will continue to explore other opportunities to return us to profitability and provide quality and value to our consumers."

Jennifer Convertibles is the owner of the largest group of sofabed specialty retail stores in the United States, with 65 Jennifer Convertibles® stores and is the largest specialty retailer of leather furniture with 8 Jennifer Leather stores.  As of July 11, 2011, the Company owned 73 stores and operates six 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 Jennifer Convertibles' 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 Jennifer Convertibles' judgment as of the date of the release.  Jennifer Convertibles disclaims, however, any interest or obligations to update these forward-looking statements.

Contact:
Jennifer Convertibles, Inc.
516-496-1900
[email protected]

SOURCE Jennifer Convertibles, Inc.