DMI posts 2.9% sales gain in 1Q
By Furniture Today Staff -- Furniture Today, January 13, 2003
Louisville, Ky. — Case goods manufacturer and importer DMI Furniture reported sales of $26 million in its 2003 first fiscal quarter, a 2.9% increase over the same period last year.
Net income for the quarter ended Nov. 30 jumped nearly 30% over the prior quarter to $424,000.
Excluding $1.6 million in first-quarter 2002 sales from DMI's discontinued Dolly Madison division, revenues were up 9.8% in the first three months of fiscal 2003.
Double-digit growth in the Wynwood and Home Styles residential import divisions helped offset continued difficulty in office furniture, suffering from lower corporate spending, lower overall demand and lower prices at retail.
The soft commercial office market also increased expenses due to manufacturing inefficiencies, the company said. Higher freight costs due to seasonal surcharges and rerouting of cargos to avoid idle West Coast ports also boosted expenses, offset somewhat by a 5.7% drop in selling, general and administrative expenses.
"In spite of some disruption in the supply chain, due to the temporary West Coast port closings during the quarter, we were able to deliver increases in both revenues and income over the previous year's first quarter," said Donald Dreher, DMI's president and chief executive officer.
Dreher said DMI sources 75% of its volume offshore and, of that, about 98% typically goes through West Coast ports. DMI countered the closings by building inventories and rerouting product.
DMI also built up inventories in anticipation of what could be a record second quarter. Dreher also anticipates gross margins will trend up and consumers will continue to seek lower-priced product.
DMI sells residential and commercial furniture from plants in Indiana, Asia and South America. Divisions include DMI Office Furniture, DMI Desk Co., Wynwood Furniture Co. and Home Styles.
| Quarter ended 11/30 | 2002 | 2001 | Change |
|---|---|---|---|
| Sales | $25,994,000 | $25,266,000 | 2.9% |
| Operating income | 1,049,000 | 963,000 | 8.9% |
| Net income | 424,000 | 327,000 | 29.7% |
| Earnings per share | 0.10 | 0.08 | 25.0% |
