O'Sullivan Industries Reports Third Quarter Results

Apr 26, 2001, 01:00 ET from O'Sullivan Industries Holdings, Inc.

    LAMAR, Mo., April 26 /PRNewswire/ -- O'Sullivan Industries Holdings, Inc.,
 (OTC Bulletin Board:    OSULP) a leading manufacturer of ready-to-assemble
 furniture, today reported results for the third quarter of fiscal 2001 ended
 March 31, 2001.
     For the quarter, net sales were $101.1 million compared to a record of
 $116.7 million for the third quarter of fiscal 2000.  Adjusted EBITDA, which
 is defined as earning before interest, taxes, depreciation, amortization,
 merger related expenses, compensation expense from stock options, loss on the
 settlement of an interest rate swap and restructuring charge, was
 $14.7 million for the third quarter of this fiscal year.  Reflecting the lower
 sales level, adjusted EBITDA decreased from $16.5 million for the third
 quarter of fiscal 2000, but remained at 14.5% of net sales.
     Net income for the quarter was $1.0 million compared to $2.9 million for
 the third quarter of last year.  Net loss attributable to common stockholders
 after accounting for accumulated but unpaid dividends for the third quarter of
 this fiscal year was $1.8 million compared to net income of $0.6 million for
 the comparable quarter a year ago.
     For the first nine months of fiscal 2001, sales were $288.2 million, down
 12.6% from sales of $329.7 million for the first nine months of fiscal 2000.
 Adjusted EBITDA decreased to $35.4 million for the first nine months of this
 fiscal year, or 12.3% of sales, from $44.7 million, or 13.6% of sales, for the
 comparable period a year ago.  Net loss attributable to common stockholders
 for the first nine months of this fiscal year was $16.8 million compared to
 net loss of $7.1 million for the comparable nine month period.
     "We were able to achieve several of our strategic objectives during this
 quarter," stated Richard D. Davidson, president and chief executive officer.
 "We maintained our EBITDA margins at the same level as a year ago -- 14.5% of
 sales -- even with the decrease in our sales.  We brought our inventories back
 in line with a reduction of $7.4 million dollars and continued to reduce our
 days sales outstanding.  The positive cash flow after capital expenditures was
 approximately $1.0 million for the March quarter and $3.6 million year-to-
 date.
     "Our sales results, as well as those of the whole furniture industry, have
 been affected by the lower consumer confidence levels and resulting unsettled
 business environment," Mr. Davidson continued.  "Retail activity has continued
 its slow pace through the March quarter and into the June quarter.  Given the
 visibility we have today, we believe our sales for the June quarter should be
 flat to down in the mid-single digits from the prior year.  We currently
 expect our adjusted EBITDA for the June quarter to be about the same as last
 year's $13.8 million."
     Mr. Davidson concluded, "Although the current economic conditions are
 extremely difficult, we continue to believe in the long-term growth potential
 of the RTA industry.  We have taken the necessary actions to align our cost
 structure, inventory and receivables to the prevailing level of business.  We
 believe these actions should position O'Sullivan to capture share in the
 eventual resumption of market growth."
 
     The forward-looking statements in this release involve risks and
 uncertainties that are dependent upon a number of factors such as sales
 levels, product mix, customer acceptance of existing and new products,
 material price increases, bankruptcy or loss of significant customers,
 interest rate fluctuations, and other factors, all of which are difficult to
 predict and most of which are beyond O'Sullivan's control.  Actual results
 could differ materially from those expressed in the forward-looking
 statements.  Please review the Company's 10-K and most recent 10-Q reports
 filed with the Securities and Exchange Commission.
 
     O'SULLIVAN THIRD QUARTER RESULTS
     (Continued)
     Condensed Consolidated Statement of Operations
     (In thousands except per share data)
     (unaudited)
                                                Three Months Ended March 31,
                                                                           %
                                                 2001         2000       Change
     Net sales                                 $101,145     $116,686      -13%
     Cost of sales                               72,545       82,732      -12%
     Gross profit                                28,600       33,954      -16%
     Gross profit percent                         28.3%        29.1%
 
     Selling, marketing and administrative       17,523       21,412      -18%
     Restructuring charge                           -            -         -
     Merger related expenses                        -            -         -
     Transaction fee to related party
     Compensation expense from stock
      options                                       -            -         -
     Loss on settlement of interest rate
      swap                                          -            -         -
 
     Operating income                            11,077       12,542      -12%
     Interest expense, net                        9,525        7,695      +24%
     Income (loss) before income taxes,
       extraordinary item and cumulative
       effect of accounting change                1,552        4,847      -68%
     Income taxes (benefit)                         573        1,912      -70%
 
     Income (loss) before extraordinary
      item and cumulative effect of accounting
        change                                      979        2,935      -67%
     Extraordinary loss from early
      extinguishment
       of debt, net of income tax benefit
        of $171                                     -            -         -
     Cumulative effect of accounting
      change, net of income tax benefit
      of $53                 -            -         -
     Net income (loss)                              979        2,935      -67%
     Dividends and accretion on preferred
      stock                                      (2,791)      (2,376)
     Net income (loss) attributable to
      common stockholders                       $(1,812)        $559     -424%
 
 
     O'SULLIVAN THIRD QUARTER RESULTS
     (Continued)
     Condensed Consolidated Statement of Operations
     (In thousands except per share data)
     (unaudited)
                                                Nine Months Ended March 31,
                                                                       %
                                               2001        2000      Change
 
     Net sales                                $288,243    $329,701       -13%
     Cost of sales                             208,586     232,180       -10%
     Gross profit                               79,657      97,521       -18%
     Gross profit percent                        27.6%       29.6%
 
     Selling, marketing and administrative      56,202      64,568       -13%
     Restructuring charge                       10,506         -          -
     Merger related expenses                       -         7,792        -
     Transaction fee to related party                        3,062
     Compensation expense from stock
      options                                      -        10,627        -
     Loss on settlement of interest rate
      swap                                         -           408        -
 
     Operating income                           12,949      11,064       +17%
     Interest expense, net                      26,487      10,952      +142%
     Income (loss) before income taxes,
       extraordinary item and cumulative
       effect of accounting change             (13,538)        112    -12188%
     Income taxes (benefit)                     (4,738)      3,747      -226%
 
     Income (loss) before extraordinary
      item and cumulative effect of
      accounting change                         (8,800)     (3,635)     +142%
     Extraordinary loss from early
      extinguishment of debt, net of income
      tax benefit of $171                          -          (305)       -
     Cumulative effect of accounting
      change, net of income tax benefit
      of $53                                       (95)        -          -
     Net income (loss)                          (8,895)     (3,940)     +126%
     Dividends and accretion on preferred
      stock                                     (7,936)     (3,158)
     Net income (loss) attributable to
      common stockholders                     $(16,831)    $(7,098)     +137%
 
 
 
     Condensed Consolidated Balance Sheets
     (in thousands)                                March 31           June 30,
                                               2001        2000         2000
     Assets                                       Unaudited
     Current assets:
       Cash and cash equivalents               $13,433     $14,756     $11,867
       Trade receivables, net                   56,691      73,824      58,975
       Inventories, net                         55,517      55,530      65,256
       Prepaid expenses and other assets         7,126       5,678       6,432
           Total current assets                132,767     149,788     142,530
 
     Property, plant and equipment, net         95,445      94,242      99,548
     Other assets                               12,751      14,800      14,295
     Goodwill, net                              38,504      40,172      39,755
                                              $279,467    $299,002    $296,128
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                        $15,106     $20,210     $15,399
       Accrued liabilities                      24,364      29,463      30,547
       Current portion - long term debt         14,000       3,000       3,000
           Total current liabilities            53,470      52,673      48,946
 
     Long term debt - less current             236,261     248,190     247,299
     Non - current liabilities                   5,576       2,793       3,364
     Deferred taxes                             14,478      17,257      17,626
     Mandatorily redeemable preferred stock     14,643      12,230      12,781
     Stockholders' equity (deficit)            (44,961)    (34,141)    (33,888)
                                              $279,467    $299,002    $296,128
 
 
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SOURCE O'Sullivan Industries Holdings, Inc.
    LAMAR, Mo., April 26 /PRNewswire/ -- O'Sullivan Industries Holdings, Inc.,
 (OTC Bulletin Board:    OSULP) a leading manufacturer of ready-to-assemble
 furniture, today reported results for the third quarter of fiscal 2001 ended
 March 31, 2001.
     For the quarter, net sales were $101.1 million compared to a record of
 $116.7 million for the third quarter of fiscal 2000.  Adjusted EBITDA, which
 is defined as earning before interest, taxes, depreciation, amortization,
 merger related expenses, compensation expense from stock options, loss on the
 settlement of an interest rate swap and restructuring charge, was
 $14.7 million for the third quarter of this fiscal year.  Reflecting the lower
 sales level, adjusted EBITDA decreased from $16.5 million for the third
 quarter of fiscal 2000, but remained at 14.5% of net sales.
     Net income for the quarter was $1.0 million compared to $2.9 million for
 the third quarter of last year.  Net loss attributable to common stockholders
 after accounting for accumulated but unpaid dividends for the third quarter of
 this fiscal year was $1.8 million compared to net income of $0.6 million for
 the comparable quarter a year ago.
     For the first nine months of fiscal 2001, sales were $288.2 million, down
 12.6% from sales of $329.7 million for the first nine months of fiscal 2000.
 Adjusted EBITDA decreased to $35.4 million for the first nine months of this
 fiscal year, or 12.3% of sales, from $44.7 million, or 13.6% of sales, for the
 comparable period a year ago.  Net loss attributable to common stockholders
 for the first nine months of this fiscal year was $16.8 million compared to
 net loss of $7.1 million for the comparable nine month period.
     "We were able to achieve several of our strategic objectives during this
 quarter," stated Richard D. Davidson, president and chief executive officer.
 "We maintained our EBITDA margins at the same level as a year ago -- 14.5% of
 sales -- even with the decrease in our sales.  We brought our inventories back
 in line with a reduction of $7.4 million dollars and continued to reduce our
 days sales outstanding.  The positive cash flow after capital expenditures was
 approximately $1.0 million for the March quarter and $3.6 million year-to-
 date.
     "Our sales results, as well as those of the whole furniture industry, have
 been affected by the lower consumer confidence levels and resulting unsettled
 business environment," Mr. Davidson continued.  "Retail activity has continued
 its slow pace through the March quarter and into the June quarter.  Given the
 visibility we have today, we believe our sales for the June quarter should be
 flat to down in the mid-single digits from the prior year.  We currently
 expect our adjusted EBITDA for the June quarter to be about the same as last
 year's $13.8 million."
     Mr. Davidson concluded, "Although the current economic conditions are
 extremely difficult, we continue to believe in the long-term growth potential
 of the RTA industry.  We have taken the necessary actions to align our cost
 structure, inventory and receivables to the prevailing level of business.  We
 believe these actions should position O'Sullivan to capture share in the
 eventual resumption of market growth."
 
     The forward-looking statements in this release involve risks and
 uncertainties that are dependent upon a number of factors such as sales
 levels, product mix, customer acceptance of existing and new products,
 material price increases, bankruptcy or loss of significant customers,
 interest rate fluctuations, and other factors, all of which are difficult to
 predict and most of which are beyond O'Sullivan's control.  Actual results
 could differ materially from those expressed in the forward-looking
 statements.  Please review the Company's 10-K and most recent 10-Q reports
 filed with the Securities and Exchange Commission.
 
     O'SULLIVAN THIRD QUARTER RESULTS
     (Continued)
     Condensed Consolidated Statement of Operations
     (In thousands except per share data)
     (unaudited)
                                                Three Months Ended March 31,
                                                                           %
                                                 2001         2000       Change
     Net sales                                 $101,145     $116,686      -13%
     Cost of sales                               72,545       82,732      -12%
     Gross profit                                28,600       33,954      -16%
     Gross profit percent                         28.3%        29.1%
 
     Selling, marketing and administrative       17,523       21,412      -18%
     Restructuring charge                           -            -         -
     Merger related expenses                        -            -         -
     Transaction fee to related party
     Compensation expense from stock
      options                                       -            -         -
     Loss on settlement of interest rate
      swap                                          -            -         -
 
     Operating income                            11,077       12,542      -12%
     Interest expense, net                        9,525        7,695      +24%
     Income (loss) before income taxes,
       extraordinary item and cumulative
       effect of accounting change                1,552        4,847      -68%
     Income taxes (benefit)                         573        1,912      -70%
 
     Income (loss) before extraordinary
      item and cumulative effect of accounting
        change                                      979        2,935      -67%
     Extraordinary loss from early
      extinguishment
       of debt, net of income tax benefit
        of $171                                     -            -         -
     Cumulative effect of accounting
      change, net of income tax benefit
      of $53                 -            -         -
     Net income (loss)                              979        2,935      -67%
     Dividends and accretion on preferred
      stock                                      (2,791)      (2,376)
     Net income (loss) attributable to
      common stockholders                       $(1,812)        $559     -424%
 
 
     O'SULLIVAN THIRD QUARTER RESULTS
     (Continued)
     Condensed Consolidated Statement of Operations
     (In thousands except per share data)
     (unaudited)
                                                Nine Months Ended March 31,
                                                                       %
                                               2001        2000      Change
 
     Net sales                                $288,243    $329,701       -13%
     Cost of sales                             208,586     232,180       -10%
     Gross profit                               79,657      97,521       -18%
     Gross profit percent                        27.6%       29.6%
 
     Selling, marketing and administrative      56,202      64,568       -13%
     Restructuring charge                       10,506         -          -
     Merger related expenses                       -         7,792        -
     Transaction fee to related party                        3,062
     Compensation expense from stock
      options                                      -        10,627        -
     Loss on settlement of interest rate
      swap                                         -           408        -
 
     Operating income                           12,949      11,064       +17%
     Interest expense, net                      26,487      10,952      +142%
     Income (loss) before income taxes,
       extraordinary item and cumulative
       effect of accounting change             (13,538)        112    -12188%
     Income taxes (benefit)                     (4,738)      3,747      -226%
 
     Income (loss) before extraordinary
      item and cumulative effect of
      accounting change                         (8,800)     (3,635)     +142%
     Extraordinary loss from early
      extinguishment of debt, net of income
      tax benefit of $171                          -          (305)       -
     Cumulative effect of accounting
      change, net of income tax benefit
      of $53                                       (95)        -          -
     Net income (loss)                          (8,895)     (3,940)     +126%
     Dividends and accretion on preferred
      stock                                     (7,936)     (3,158)
     Net income (loss) attributable to
      common stockholders                     $(16,831)    $(7,098)     +137%
 
 
 
     Condensed Consolidated Balance Sheets
     (in thousands)                                March 31           June 30,
                                               2001        2000         2000
     Assets                                       Unaudited
     Current assets:
       Cash and cash equivalents               $13,433     $14,756     $11,867
       Trade receivables, net                   56,691      73,824      58,975
       Inventories, net                         55,517      55,530      65,256
       Prepaid expenses and other assets         7,126       5,678       6,432
           Total current assets                132,767     149,788     142,530
 
     Property, plant and equipment, net         95,445      94,242      99,548
     Other assets                               12,751      14,800      14,295
     Goodwill, net                              38,504      40,172      39,755
                                              $279,467    $299,002    $296,128
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                        $15,106     $20,210     $15,399
       Accrued liabilities                      24,364      29,463      30,547
       Current portion - long term debt         14,000       3,000       3,000
           Total current liabilities            53,470      52,673      48,946
 
     Long term debt - less current             236,261     248,190     247,299
     Non - current liabilities                   5,576       2,793       3,364
     Deferred taxes                             14,478      17,257      17,626
     Mandatorily redeemable preferred stock     14,643      12,230      12,781
     Stockholders' equity (deficit)            (44,961)    (34,141)    (33,888)
                                              $279,467    $299,002    $296,128
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X19872651
 
 SOURCE  O'Sullivan Industries Holdings, Inc.