CONFORMED
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934
For the month of September 2004 Commission File Number 1-11854
NATUZZI S.p.A.
(Translation of Registrant's name into English)
Via Iazzitiello 47
70029 Santeramo, Italy
(Address of principal office)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F x Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
(Check One) Yes No X
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b). 82- .)
Natuzzi Announces Second Quarter and First Half 2004 Financial Results
SANTERAMO IN COLLE, Bari, Italy--(BUSINESS WIRE)--Sept. 8, 2004--Natuzzi
S.p.A.:
Quarter's highlights:
-- Net profit margin increased to 6.3% from 5.9% reported in the second
quarter 2003
-- Second quarter 2004 net sales flat over last year comparable period
-- Units sold decreased 0.4% over the prior year's quarter
Natuzzi S.p.A.
SECOND QUARTER AND FIRST HALF 2004
FINANCIAL RESULTS TELECONFERENCE
Senior management will review second-quarter 2004 financial results.
The review will be followed by a question and answer session.
Pasquale Natuzzi
Chairman of the Board and Chief Executive Officer
Giuseppe Desantis
Vice Chairman of the Board
Nicola Dell'Edera
Finance Director
and
Fred Starr
President and Chief Executive Officer, Natuzzi Americas
Thursday, September 9, 2004
10:00 a.m. (New York time)
3:00 p.m. (London time)
4:00 p.m. (Italian time)
Replay of this event will be available on our web-site
www.natuzzi.com
starting from 12:00 a.m. Italian time on September 10, 2004.
The Board of Directors of Natuzzi S.p.A. (NYSE: NTZ) ('Natuzzi' or 'the
Company'), the world's leading manufacturer of leather-upholstered furniture,
today announced financial results for the second quarter and first half 2004.
NET SALES
Natuzzi's second quarter 2004 net sales were flat with respect to last year
second quarter at EUR 202.6 million, or $ 244.1 million. In the same period
total seats sold decreased 0.4 percent. In the six-month period the Company
increased net sales by 2.1 percent to EUR 394.4 million, or $ 483.9 million, and
total seats sold by 4.4 percent.
In the second quarter 2004 net upholstery sales increased 1.1 percent to
EUR 181.1 million, or $ 218.2 million, versus second quarter 2003. Other sales
(principally living-room accessories and raw materials produced by the Company
and sold to third parties) decreased 8.5 percent to EUR 21.5 million, or $ 25.9
million.
Second quarter 2004 net upholstery sales in the Americas were EUR 76.6
million, or $ 92.3 million, 3.6 percent less than the previous year's quarter.
In Europe, net upholstery sales increased 0.8 percent to EUR 91.3 million, or $
110.0 million, while in the rest of the world upholstery sales increased 46.7
percent to EUR 13.2 million, or $ 15.9 million.
In the second quarter of 2004, total net sales to our retail chains Divani
& Divani by Natuzzi, Natuzzi stores and Kingdom of Leather increased 11.4
percent to EUR 31.4 million, or $ 37.8 million. During the quarter 9 new stores
were opened in Italy, Portugal, Slovenia, Spain, Israel, Denmark, and New
Zealand, whereas 1 store was closed in U.K., bringing the total number of
stores, including the Kingdom of Leather's stores, to 140 in Italy and 122
outside Italy as of June 30, 2004.
Leather-upholstered furniture sales increased 2.5 percent over the last
year's quarter to EUR 150.7 million, or $ 181.6 million. In the same period,
fabric-upholstered furniture sales were EUR 30.4 million, or $ 36.6 million,
down 5.2 percent compared to the second quarter of 2003.
Second quarter 2004 net sales of Natuzzi-branded furniture decreased 2.1
percent to EUR 139.3 million, or $ 167.8 million, compared to second quarter
2003, while net sales of Italsofa branded furniture increased 13.6 percent to
EUR 41.8 million, or $ 50.4 million.
Pasquale Natuzzi, Chairman and Chief Executive Officer, said "Unstable
economic and currency conditions, together with the persistent pricing pressure
affecting in particular the US market, generated a decrease in furniture demand,
which at Company level turned into lower orders and flat sales during the entire
second quarter".
GROSS PROFIT & OPERATING INCOME
Natuzzi's second quarter 2004 gross profit increased 13.1 percent to EUR
78.7 million, or $ 94.8 million, compared to last year's quarter. Gross profit
margin increased to 38.9 percent from 34.4.
Second quarter 2004 operating income and margin more than doubled quarter
over quarter to EUR 16.8 million, or $ 20.2 million, and 8.3 percent,
respectively.
FOREX & TAXES
In the second quarter 2004, Natuzzi had a net foreign exchange gain of EUR
1.4 million, or $ 1.6 million, versus EUR 4.1 million or $ 4.7 million reported
in last year's comparable period.
Income taxes for second quarter 2004 were EUR 5.7 million, or $ 6.9
million, representing an effective tax rate of 31.0 percent. In the second
quarter 2003, the effective tax rate was 17.9 percent.
NET INCOME & EARNINGS PER SHARE
In the second quarter 2004, net income increased 6.7 percent versus last
year's quarter to EUR 12.7 million, or $ 15.3 million, while earnings per share
(ADR) were EUR 0.23, or $ 0.28. In the first six months of 2004, net income
decreased 17.2 percent to EUR 22.1 million, or $ 27.1 million from EUR 26.7
million, or $ 29.5 million, reported in the prior year's comparable period.
Pasquale Natuzzi commented "In the second quarter 2004, notwithstanding
flat net sales, the Company increased the net profit margin thanks to the
improvements achieved in our operations. Lower costs and higher operating
efficiencies are primary goals in our mission to make high quality and well
designed living room furniture at a competitive price."
CASH FLOW
In the first six months of 2004 net cash flow from operations increased
103.6 percent to EUR 45.6 million, or $ 55.9 million, from EUR 22.4 million, or
$ 24.8 million, reported in the same period of 2003. On a per ADR basis, net
operating cash flow was EUR 0.83, or $ 1.02, compared to EUR 0.41 or $ 0.45 in
the first half of 2003.
OUTLOOK
Concluded Mr. Natuzzi: "The year-to-date order flow is still marginally
negative when compared to the same period of 2003 due to the challenging
competitive and economic scenario. However, we rely on the historically well
performing fourth quarter to reverse this negative trend and achieve our goal of
an annual increase in units sold of about 5 percent.
Assuming that the competitive, economic and currency scenario do not
deteriorate any further, we confirm our forecast of a net profit margin in the
region of 5 percent."
CONVERSION RATES
The second quarter 2004 and 2003 dollar figures presented in this
announcement were converted at an average noon buying rate of $ 1.2047 per EUR
and $ 1.1359 per EUR, respectively. The six months figures for 2004 and 2003
were converted at an average noon buying rate of $ 1.2269 per EUR and $ 1.1051
per EUR, respectively.
ABOUT NATUZZI S.P.A.
Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and
manufactures a broad collection of leather-upholstered residential furniture.
Italy's largest furniture manufacturer, Natuzzi is the global leader in the
leather segment, exporting its innovative, high-quality sofas and armchairs to
135 markets on 5 continents. Cutting-edge design, superior Italian
craftsmanship, and advanced, vertically-integrated manufacturing operations
underpin the Company's market leadership.
Since 1990, Natuzzi has sold its furnishings in Italy through the popular
Divani & Divani by Natuzzi chain of 138 stores, which it licenses to qualified
furniture dealers. Outside Italy, the Company sells to various furniture
retailers, as well as through 125 licensed Divani & Divani by Natuzzi and
Natuzzi stores, including the 12 Kingdom of Leather stores.
Natuzzi S.p.A. was listed on the New York Stock Exchange on May 13, 1993.
The Company is ISO 9001 and 14001 certified.
Statements in this press release other than statements of historical fact
are "forward-looking statements". Forward-looking statements are based on
management's current expectations and beliefs and therefore you should not place
undue reliance on them. These statements are subject to a number of risks and
uncertainties, including risks that may not be subject to the Company's control,
that could cause actual results to differ materially from those contained in any
forward-looking statement. These risks include, but are not limited to,
fluctuations in exchange rates, economic and weather factors affecting consumer
spending, competitive and regulatory environment, as well as other political,
economical and technological factors, and other risks identified from time to
time in the Company's filings with the Securities and Exchange Commission,
particularly in the Company's annual report on Form 20-F. Forward looking
statements speak as of the date they were made, and the Company undertakes no
obligation to update publicly any of them in light of new information or future
events.
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statement of Earnings
for the second quarter ended June 30, 2004 and 2003 on the basis of
Italian GAAP
(Expressed in millions of EUR except per share data)
2nd Quarter % 2nd Quarter % %
----------- ----- ----------- ----- ------
2004 Sales 2003 Sales Change
----------- ----- ----------- ----- ------
Upholstery net sales 181.1 179.1 1.1%
Other sales 21.5 23.5 -8.5%
----- -----
Net Sales 202.6 100% 202.6 100% 0.0%
Purchases (84.1) (105.1) -20.0%
Labor (26.3) (27.1) -3.0%
Third-party
Manufacturers (6.9) (9.9) -30.3%
Manufacturing Costs (7.1) (7.0) 1.4%
Inventories, net 0.5 16.1 -96.9%
----- -----
Cost of Sales (123.9) (133.0) -6.8%
----- -----
Gross Profit 78.7 38.9% 69.6 34.4% 13.1%
Selling Expenses (51.7) (51.6) 0.2%
General and
Administrative Expenses (10.2) (9.8) 4.1%
----- -----
Operating Income 16.8 8.3% 8.2 4.0% 104.9%
Interest Income, net (0.1) 0.2
Foreign Exchange, net 1.4 4.1
Other Income, net 0.3 2.0
----- -----
Earnings before taxes and
minority interest 18.4 14.5 26.9%
Income taxes (5.7) (2.6) 119.2%
----- -----
Earnings before minority
interest 12.7 11.9 6.7%
Minority Interest 0.0 0.0
Net Earnings 12.7 6.3% 11.9 5.9% 6.7%
============ ============
Earnings per Share 0.23 0.22
============ ============
Average Number of Shares
Outstanding* 54,681,628 54,681,628
(*) Net of shares repurchased 1 EUR = 1,936.27 ITL
KEY FIGURES IN U.S. DOLLARS (millions)
2nd 2nd
Quarter Quarter
2004 2003
-------- --------
Net Sales 244.1 230.1
Gross Profit 94.8 79.1
Operating Income 20.2 9.3
Net Earnings 15.3 13.5
Earnings per Share in U.S. dollars 0.28 0.25
Average exchange rate (U.S. dollar per Euro) 1.2047 1.1359
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statement of Earnings
for six months ended June 30, 2004 and 2003 on the basis of
Italian GAAP
(Expressed in millions of EUR except per share data)
1st Half % 1st Half % %
----------- ----- ----------- ---- ------
2004 Sales 2003 Sales Change
----------- ----- ----------- ---- ------
Upholstery net sales 350.6 343.7 2.0%
Other sales 43.8 42.4 3.3%
----- -----
Net Sales 394.4 100% 386.1 100% 2.1%
Purchases (170.1) (189.4) -10.2%
Labor (53.9) (54.1) -0.4%
Third-party Manufacturers (15.4) (17.6) -12.5%
Manufacturing Costs (14.7) (14.4) 2.1%
Inventories, net 6.4 17.4 -63.2%
----- -----
Cost of Sales (247.7) (258.1) -4.0%
----- -----
Gross Profit 146.7 37.2% 128.0 33.1% 14.6%
Selling Expenses (96.3) (88.3) 9.1%
General and Administrative
Expenses (19.8) (18.4) 7.6%
----- -----
Operating Income 30.6 7.8% 21.3 5.5% 43.7%
Interest Income, net (0.1) 0.6
Foreign Exchange, net 0.9 10.1
Other Income, net 0.4 1.2
----- -----
Earnings before taxes and
minority interest 31.8 33.2 -4.2%
Income taxes (9.7) (6.5) 49.2%
----- -----
Earnings before minority
interest 22.1 26.7 -17.2%
Minority Interest 0.0 0.0
----- -----
Net Earnings 22.1 5.6% 26.7 6.9%-17.2%
============ ============
Earnings per Share 0.40 0.49
============ ============
Average Number of Shares
Outstanding* 54,681,628 54,681,628
(*) Net of shares repurchased 1 EUR = 1,936.27 ITL
KEY FIGURES IN U.S. DOLLARS (millions)
1st 1st
Half Half
2004 2003
------ ------
Net Sales 483.9 426.7
Gross Profit 180.0 141.5
Operating Profit 37.5 23.5
Net Earnings 27.1 29.5
Earnings per Share in U.S. dollars 0.49 0.54
Average exchange rate (U.S. dollar per Euro) 1.2269 1.1051
----------------------------------------------------------------------
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in
millions of EUR)
2nd 2nd 2nd 2nd
Quarter Quarter % Quarter Quarter %
-------- -------- ------ -------- -------- ------
2004 2003 Change 2004 2003 Change
-------- -------- ------ -------- -------- ------
Americas 76.6 79.5 -3.6% 415,666 442,418 -6.0%
% of total 42.3% 44.4% 51.8% 54.9%
Europe 91.3 90.6 0.8% 334,894 320,225 4.6%
% of total 50.4% 50.6% 41.7% 39.7%
Rest of world 13.2 9.0 46.7% 51,905 43,326 19.8%
% of total 7.3% 5.0% 6.5% 5.4%
TOTAL 181.1 179.1 1.1% 802,465 805,969 -0.4%
----------------------------------------------------------------------
BREAKDOWN BY COVERING
Sales Seat Units
(Expressed in
millions of EUR)
2nd 2nd 2nd 2nd
Quarter Quarter % Quarter Quarter %
-------- -------- ------ -------- -------- ------
2004 2003 Change 2004 2003 Change
-------- -------- ------ -------- -------- ------
Leather 150.7 147.1 2.5% 621,240 615,859 0.9%
% of total 83.2% 82.1% 77.4% 76.4%
Fabric 30.4 32.0 -5.2% 181,225 190,110 -4.7%
% of total 16.8% 17.9% 22.6% 23.6%
TOTAL 181.1 179.1 1.1% 802,465 805,969 -0.4%
----------------------------------------------------------------------
BREAKDOWN BY BRAND
Sales Seat Units
(Expressed in
millions of EUR)
2nd 2nd 2nd 2nd
Quarter Quarter % Quarter Quarter %
-------- -------- ------ -------- -------- ------
2004 2003 Change 2004 2003 Change
-------- -------- ------ -------- -------- ------
Natuzzi 139.3 142.3 -2.1% 525,263 550,049 -4.5%
% of total 76.9% 79.5% 65.5% 68.2%
Italsofa 41.8 36.8 13.6% 277,202 255,920 8.3%
% of total 23.1% 20.5% 34.5% 31.8%
TOTAL 181.1 179.1 1.1% 802,465 805,969 -0.4%
----------------------------------------------------------------------
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in
millions of
EUR)
1st 1st 1st Half 1st Half
Half Half % %
------ ------ ------ ---------- ---------- ------
2004 2003 Change 2004 2003 Change
------ ------ ------ ---------- ---------- ------
Americas 156.1 158.8 -1.7% 865,949 843,771 2.6%
% of total 44.5% 46.2% 53.7% 54.6%
Europe 171.6 167.3 2.6% 651,382 620,060 5.1%
% of total 49.0% 48.7% 40.4% 40.1%
Rest of world 22.9 17.6 30.1% 95,257 81,542 16.8%
% of total 6.5% 5.1% 5.9% 5.3%
TOTAL 350.6 343.7 2.0% 1,612,588 1,545,373 4.4%
----------------------------------------------------------------------
BREAKDOWN BY COVERING
(Expressed in millions of EUR)
1st 1st 1st Half 1st Half
Half Half % %
------ ------ ------ ---------- ---------- ------
2004 2003 Change 2004 2003 Change
------ ------ ------ ---------- ---------- ------
Leather 288.7 280.1 3.1% 1,234,315 1,162,623 6.2%
% of total 82.3% 81.5% 76.5% 75.2%
Fabric 61.9 63.6 -2.7% 378,273 382,750 -1.2%
% of total 17.7% 18.5% 23.5% 24.8%
TOTAL 350.6 343.7 2.0% 1,612,588 1,545,373 4.4%
----------------------------------------------------------------------
BREAKDOWN BY BRAND
(Expressed in millions of EUR)
1st 1st 1st Half 1st Half
Half Half % %
------ ------ ------ ---------- ---------- ------
2004 2003 Change 2004 2003 Change
------ ------ ------ ---------- ---------- ------
Natuzzi 270.9 277.0 -2.2% 1,073,668 1,094,902 -1.9%
% of total 77.3% 80.6% 66.6% 70.9%
Italsofa 79.7 66.7 19.5% 538,920 450,471 19.6%
% of total 22.7% 19.4% 33.4% 29.1%
TOTAL 350.6 343.7 2.0% 1,612,588 1,545,373 4.4%
----------------------------------------------------------------------
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet
as of June 30, 2004 and December 31, 2003
(Expressed in millions of EUR)
June December
30, 31,
------ --------
2004 2003
------ --------
Current Assets:
Cash and cash equivalents 97.9 63.6
Marketable debt securities 0.2 0
Trade receivables, net 148.9 154.5
Other receivables 47.3 58.1
Inventories 103.9 97.5
Unrealized foreign exchange gain 1.7 6.3
Prepaid expenses and accrued income 3.2 2.1
Deferred income taxes 4.2 1.0
Total current assets 407.3 383.1
----- -----
Non-Current Assets:
Net property, plant and equipment 253.4 254.2
Treasury shares 0.0 37.8
Other assets 15.5 17.1
Deferred income taxes 0.2 0.2
----- -----
Total Assets 676.4 692.4
====== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 6.2 4.8
Current portion of long-term debt 0.7 1.3
Accounts payable-trade 77.5 80.9
Accounts payable-shareholders for dividends 8.2 0.6
Accounts payable-other 16.7 17.2
Allowance for unrealized foreign exchange losses 0.0 0.0
Income taxes 4.4 4.3
Salaries, wages and related liabilities 18.5 16.1
Total current liabilities 132.2 125.2
----- -----
Long-Term Liabilities:
Employees' termination indemnity 28.5 27.6
Long-term debt 4.5 4.2
Deferred income taxes 0.4 0.4
Deferred income for capital grants 12.9 13.4
Other liabilities 5.3 5.7
Minority Interest 0.9 0.9
Shareholders' Equity:
Share capital 54.7 57.5
Reserves 42.4 80.2
Additional paid-in capital 8.3 8.3
Retained earnings 386.3 369.0
Total shareholders' equity 491.7 515.0
----- -----
Total Liabilities and Shareholders' Equity 676.4 692.4
====== ========
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
as of June 30, 2004 and 2003
(Expressed in millions of EUR)
June 30 June
2004 30
2003
------- -----
Cash flows from operating activities:
Net earnings 22.1 26.7
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 14.7 10.7
Employees' termination indemnity 0.9 0.9
Deferred income taxes (3.3) 0.7
Minority interest 0.1 0.0
(Gain) loss on disposal of assets (0.1) 0.3
Change in provision for unrealized foreign exchange
(losses) / gain 4.6 (12.5)
Change in assets and liabilities:
Receivables, net 5.6 10.0
Inventories (6.4) (11.6)
Prepaid expenses and accrued income (1.0) (2.7)
Other assets 10.9 13.1
Accounts payable (3.4) (3.3)
Income taxes 0.1 (5.6)
Salaries, wages and related liabilities 2.4 4.3
Other liabilities (1.6) (8.8)
----- -----
Total adjustments 23.5 (4.3)
----- -----
Net cash provided by operating activities 45.6 22.4
----- -----
Cash flows from investing activities:
Property, plant and equipment:
Additions (19.3) (22.0)
Disposals 6.9 0.4
Government grants received - 0.2
Marketable debt securities:
Purchases (0.2) -
Proceeds from maturities - -
Proceeds from sales - -
Purchase of business, net of cash acquired - -
Purchase of minority interest 0.0 (4.3)
----- -----
Net cash used in investing activities (12.6) (25.7)
Cash flows from financing activities:
Long term debt:
Proceeds 0.4 -
Repayments (0.7) 0.4
Short-term borrowings 1.4 0.3
Exercise of stock options - -
Treasury shares - -
Dividends paid 0.0 -
Dividends paid to minority shareholders - -
----- -----
Net cash used in financing activities 1.1 0.7
----- -----
Effect of translation adjustments on cash 0.2 (1.8)
----- -----
Increase (decrease) in cash and cash equivalents 34.3 (4.4)
Cash and cash equivalents, beginning of the year 63.6 96.7
Cash and cash equivalents, end of the period 97.9 92.3
CONTACT: Natuzzi S.p.A.
Investor Relations Dept.
Tel.: +39-080-8820-812
Fax: +39-080-8820-241
E-mail: investor_relations@natuzzi.com
or
Corporate Press Office
Tel.: +39-080-8820-124
Fax: +39-080-8820-508
E-mail: relazioni.esterne@natuzzi.com
CONFORMED
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NATUZZI S.p.A.
(Registrant)
Date: September 8, 2004 By: /s/ GIUSEPPE DESANTIS
----------------------
Giuseppe Desantis