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 November 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 Third Quarter 2004 Financial Results
SANTERAMO IN COLLE, BARI, Italy--(BUSINESS WIRE)--Nov. 15,
2004--Natuzzi S.p.A. (NYSE: NTZ):
Quarter's highlights:
-- Net sales decreased 4.8% to EUR 165.5 million compared to the
third quarter 2003
-- Unit sales up 1.5% over last year comparable period
-- Net profit margin declined from 4.0% to 3.4%
-- Cash flow from operations almost tripled to EUR 70.0 million in
the first nine months of 2004
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 third quarter ended September 30,
2004.
NET SALES
----------------------------------------------------------------------
In the third quarter 2004 net sales decreased by 4.8 percent to
EUR 165.5 million, or $ 202.3 million, from EUR 173.9 million, or $
195.9 million, reported in the third quarter 2003. In the first nine
months of 2004, net sales were flat at EUR 559.9 million, or $ 686.2
million, over last year comparable period.
During the third quarter 2004 Natuzzi's net upholstery sales
decreased marginally by 0.4 percent to EUR 147.1 million, or $ 179.8
million, compared to last year's third quarter and other sales
(principally living-room accessories and raw materials) decreased 29.8
percent to EUR 18.4 million, or $ 22.5 million.
Third quarter 2004 net upholstery sales decreased 15.5 percent in
the Americas to EUR 69.2 million, or $ 84.6 million, and increased
22.8 percent in Europe to EUR 66.9 million, or $ 81.8 million. In the
rest of the world net upholstery sales decreased 2.7 percent to EUR
11.0 million, or $ 13.4 million.
In the third quarter of 2004, total net sales to "Divani & Divani
by Natuzzi", "Natuzzi Store" and "Kingdom of Leather" stores increased
25.2 percent to EUR 26.8 million, or $ 32.8 million. During the same
quarter 3 new stores were opened in France, Switzerland and Spain and
one was closed in Italy, bringing the total number of stores to 139 in
Italy and 125 outside Italy.
Leather-upholstered furniture sales in the third quarter of 2004
increased by 0.2 percent with respect to last year's third quarter, to
EUR 120.7 million, or $ 147.6 million. Fabric upholstered furniture
sales were EUR 26.4 million, or $ 32.3 million, down 3.3 percent
compared to the third quarter 2003.
Sales of Natuzzi-branded furniture, which accounted for 76.8
percent of third quarter total net upholstery sales, were EUR 112.9
million, or $ 138.0 million, down 0.3 percent compared to last year's
quarter sales of EUR 113.2 million, or $ 127.5 million. In the same
period, net sales of Italsofa branded furniture decreased 0.9 percent
to EUR 34.2 million, or $ 41.8 million, from EUR 34.5 million, or $
38.9 million.
Pasquale Natuzzi, Chairman and Chief Executive Officer, said:
"Although also the third quarter 2004 was characterized by a weak
demand, by a persistent U.S. dollar depreciation against Euro and,
consequently, by a constant reduction in the order flow, net
upholstery sales were substantially flat, whereas the unit sold have
slightly increased".
GROSS PROFIT & OPERATING INCOME
----------------------------------------------------------------------
Third quarter 2004 gross profit was EUR 57.6 million, or $ 70.4
million, down 5.1 percent over the last year's quarter. During the
same period, Natuzzi's gross profit margin slightly decreased to 34.8
percent from 34.9.
Natuzzi's third quarter 2004 operating income decreased 37.4
percent to EUR 6.7 million or $ 8.2 million. Operating margins for
each year's comparable quarter were 4.0 percent in 2004 and 6.2
percent in 2003.
FOREX & TAXES
----------------------------------------------------------------------
In the third quarter 2004, Natuzzi had a net foreign exchange gain
of EUR 1.8 million, or $ 2.2 million, versus a loss of EUR 2.3 million
or $ 2.6 million reported in the third quarter 2003.
Income taxes for third quarter 2004 were EUR 1.8 million, or $ 2.2
million. The effective tax rate was 24.0 percent versus a 27.1 percent
in the prior year's period.
NET INCOME & EARNINGS PER SHARE
----------------------------------------------------------------------
In the third quarter of 2004, the Company reported a net income of
EUR 5.6 million, or $ 6.8 million, down 20.0 percent from EUR 7.0
million, or $ 7.9 million, achieved in the same period of 2003, while
third quarter earnings per share (ADR) were EUR 0.10, or $ 0.12. In
the nine month period net income decreased 17.8 percent to EUR 27.7
million, or $ 33.9 million, from EUR 33.7 million or $ 37.5 million in
the prior year's comparable period.
Pasquale Natuzzi commented: "In third quarter 2004, the Company's
profitability continued to be affected by the same factors reported in
the previous two quarters: strong appreciation of the Euro, higher
selling costs related to the opening of stores and galleries and
investments in the Natuzzi brand strategy. The economic environment is
characterized by the persisting uncertainties due to the weak demand
and to the continuing appreciation of the Euro. For the whole 2004 we
expect a growth of seats sold of about 3% on 2003, and confirm our
forecast of a Net Earnings of about 5%".
CASH FLOW
----------------------------------------------------------------------
In the first nine months of 2004, net cash flow from operations
almost tripled to EUR 70.0 million or $ 85.8 million. On a per ADR
basis, nine months 2004 net operating cash flow was EUR 1.28, or $
1.57, compared to EUR 0.44 or $ 0.49 in 2003.
OUTLOOK
----------------------------------------------------------------------
Concluded Mr. Natuzzi: "Assuming that the current market, currency
and economic scenario do not further deteriorate, in 2005 our efforts
will be oriented to increase the unit sold by about 5% and to the
achievement of Net Earnings in the region of 5%."
CONVERSION RATES
----------------------------------------------------------------------
The third quarter 2004 and 2003 dollar figures presented in this
announcement were converted at an average noon buying rate of $ 1.2226
per EUR and $ 1.1266 per EUR, respectively. The nine months figures
for 2004 and 2003 were converted at an average noon buying rate of $
1.2255 per EUR and $ 1.1124 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 125 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 139 stores, which it
licenses to qualified furniture dealers. Outside Italy, the Company
sells to various furniture retailers, as well as through 114 licensed
Divani & Divani by Natuzzi and Natuzzi stores and 13 Kingdom of
Leather stores (as of today).
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.
- tables follow -
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statement of Earnings
for the third quarter ended September 30, 2004 and 2003 on the basis
of Italian GAAP
(Expressed in millions of EUR except per share data)
3rd 3rd
Quarter % Quarter % %
------ ----- ------ ----- ------
2004 Sales 2003 Sales Change
------ ----- ------ ----- ------
Upholstery net sales 147.1 147.7 -0.4%
Other sales 18.4 26.2 -29.8%
Net Sales 165.5 100% 173.9 100% -4.8%
Purchases (68.3) (83.7) -18.4%
Labor (23.8) (23.4) 1.7%
Third-party Manufacturers (6.3) (6.8) -7.4%
Manufacturing Costs (7.1) (6.8) 4.4%
Inventories, net (2.4) 7.5 -132.0%
Cost of Sales (107.9) (113.2) -4.7%
Gross Profit 57.6 34.8% 60.7 34.9% -5.1%
Selling Expenses (41.7) (40.9) 2.0%
General and Administrative
Expenses (9.2) (9.1) 1.1%
Operating Income 6.7 4.0% 10.7 6.2% -37.4%
Interest Income, net 0.0 0.1
Foreign Exchange, net 1.8 (2.3)
Other Income, net (1.0) 1.1
Earnings before taxes and
minority interest 7.5 9.6 -21.9%
Income taxes (1.8) (2.6) -30.8%
Earnings before minority
interest 5.7 7.0 -18.6%
Minority Interest 0.1 0.0
Net Earnings 5.6 3.4% 7.0 4.0% -20.0%
============ ============
Earnings per Share 0.10 0.13
============ ============
Average Number of Shares
Outstanding* 54,681,628 54,681,628
KEY FIGURES IN U.S. DOLLARS (millions)
3rd 3rd
Quarter Quarter
--------------------
2004 2003
--------------------
Net Sales 202.3 195.9
Gross Profit 70.4 68.4
Operating Income 8.2 12.1
Net Earnings 6.8 7.9
Earnings per Share in U.S. dollars 0.12 0.15
Average exchange rate (U.S. dollar per Euro) 1.2226 1.1266
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Earnings
for the nine months September 30, 2004 and 2003
and the basis of Italian GAAP
(Expressed in millions of EUR except per share data)
Sept. 30 % Sept. 30 % %
2004 Sales 2003 Sales Change
---------- ----- -------- ------ ------
Upholstery net sales 497.6 491.5 1.2%
Other sales 62.3 68.5 -9.1%
Net Sales 559.9 100% 560.0 100% 0.0%
Purchases (238.4) (273.1) -12.7%
Labor (77.8) (77.4) 0.5%
Third-party Manufacturers (21.6) (24.5) -11.8%
Manufacturing Costs (21.8) (21.3) 2.3%
Inventories, net 4.0 24.9 -83.9%
Cost of Sales (355.6) (371.4) -4.3%
Gross Profit 204.3 36.5% 188.6 33.7% 8.3%
Selling Expenses (138.1) (129.2) 6.9%
General and Administrative
Expenses (29.0) (27.5) 5.5%
Operating Income 37.2 6.6% 31.9 5.7% 16.6%
Interest Income, net (0.1) 0.7
Foreign Exchange, net 2.7 7.8
Other Income, net (0.5) 2.3
Earnings before taxes
and minority interest 39.3 42.7 -8.0%
Income taxes (11.5) (9.1) 26.4%
Earnings before
minority interest 27.8 33.6 -17.3%
Minority Interest 0.1 (0.1)
Net Earnings 27.7 4.9% 33.7 6.0% -17.8%
Earnings per Share 0.51 0.62
Average Number of
Shares Outstanding* 54,681,628 54,681,628
KEY FIGURES IN U.S. DOLLARS (millions)
September 30 September 30
2004 2003
------------ ------------
Net Sales 686.2 622.9
Gross Profit 250.4 209.8
Operating Profit 45.6 35.5
Net Earnings 33.9 37.5
Earnings per Share
in U.S. dollars 0.63 0.69
Average exchange rate
(U.S. dollar per Euro) 1.2255 1.1124
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in
millions of EUR)
3rd 3rd 3rd 3rd
Quarter Quarter % Quarter Quarter %
------- --------- ------ -------- -------- -------
2004 2003 Change 2004 2003 Change
------- --------- ------ -------- -------- -------
Americas 69.2 81.9 -15.5% 385,582 414,624 -7.0%
% of total 47.0% 55.5% 56.2% 61.3%
Europe 66.9 54.5 22.8% 257,441 215,207 19.6%
% of total 45.5% 36.9% 37.5% 31.8%
Rest of world 11.0 11.3 -2.7% 43,031 46,263 -7.0%
% of total 7.5% 7.6% 6.3% 6.9%
TOTAL 147.1 147.7 -0.4% 686,054 676,094 1.5%
----- ----- ----- ----- ------- ------- ----
BREAKDOWN BY COVERING
Sales Seat Units
(Expressed in
millions of EUR)
3rd 3rd 3rd 3rd
Quarter Quarter % Quarter Quarter %
-------- ------ ------- -------- --------- ------
2004 2003 Change 2004 2003 Change
------ ----- ------- -------- --------- ------
Leather 120.7 120.4 0.2% 518,687 511,023 1.5%
% of total 82.1% 81.5% 75.6% 75.6%
Fabric 26.4 27.3 -3.3% 167,367 165,071 1.4%
% of total 17.9% 18.5% 24.4% 24.4%
TOTAL 147.1 147.7 -0.4% 686,054 676,094 1.5%
----- ------ ------ ----- -------- -------- ----
BREAKDOWN BY BRAND
Sales Seat Units
(Expressed in
millions of EUR)
3rd 3rd 3rd 3rd
Quarter Quarter % Quarter Quarter %
--------- ------- ------ -------- --------- ------
2004 2003 Change 2004 2003 Change
--------- ------- ------ -------- --------- ------
Natuzzi 112.9 113.2 -0.3% 443,096 457,045 -3.1%
% of total 76.8% 76.6% 64.6% 67.6%
Italsofa 34.2 34.5 -0.9% 242,958 219,049 10.9%
% of total 23.2% 23.4% 35.4% 32.4%
TOTAL 147.1 147.7 -0.4% 686,054 676,094 1.5%
------ -------- ------- ------- -------- -------- ------
(*) Net of shares repurchased
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in millions of EUR)
SeptemberSeptember September 30 September
30 30 % 30 %
------------------------------------ -----------------
2004 2003 Change 2004 2003 Change
------------------------------------ -----------------
Americas 225.3 240.7 -6.4% 1,251,530 1,258,395 -0.5%
% of total 45.3% 49.0% 54.5% 56.6%
Europe 238.5 221.8 7.5% 908,823 835,267 8.8%
% of total 47.9% 45.1% 39.5% 37.6%
Rest of world 33.8 29.0 16.6% 138,288 127,805 8.2%
% of total 6.8% 5.9% 6.0% 5.8%
TOTAL 497.6 491.5 1.2% 2,298,641 2,221,467 3.5%
--------------------------------------------------- -----------------
BREAKDOWN BY COVERING
Sales Seat Units
(Expressed in millions of EUR)
September September 30 September September
30 % 30 30 %
----------------------------- ----------- ----------------
2004 2003 Change 2004 2003 Change
----------------------------- ----------- ----------------
Leather 409.4 400.6 2.2% 1,753,002 1,673,646 4.7%
% of total 82.3% 81.5% 76.3% 75.3%
Fabric 88.2 90.9 -3.0% 545,639 547,821 -0.4%
% of total 17.7% 18.5% 23.7% 24.7%
TOTAL 497.6 491.5 1.2% 2,298,641 2,221,467 3.5%
----------------------------------------- ----------- ----------------
BREAKDOWN BY BRAND
Sales Seat Units
Expressed inmillions of EUR)
September September September September
30 30 % 30 30 %
---------------------------- ---------- ----------------
2004 2003 Change 2004 2003 Change
---------------------------- ---------- ----------------
Natuzzi 383.7 390.3 -1.7% 1,516,763 1,551,946 -2.3%
% of total 77.1% 79.4% 66.0% 69.9%
Italsofa 113.9 101.2 12.5% 781,878 669,521 16.8%
% of total 22.9% 20.6% 34.0% 30.1%
TOTAL 497.6 491.5 1.2% 2,298,641 2,221,467 3.5%
------------------------------------------ ---------- ----------------
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet
as of September 30, 2004 and December 31, 2003
(Expressed in millions of EUR)
September December
30, 31,
----------- =========
2004 2003
----------- =========
Current Assets:
Cash and cash equivalents 101.8 63.6
Marketable debt securities 0.0 0
Trade receivables, net 133.6 154.5
Other receivables 45.4 58.1
Inventories 101.5 97.5
Unrealized foreign exchange gain 3.0 6.3
Prepaid expenses and accrued income 3.4 2.1
Deferred income taxes 4.4 1.0
Total current assets 393.1 383.1
Non-Current Assets:
Net property, plant and equipment 263.0 254.2
Treasury shares 0.0 37.8
Other assets 17.6 17.1
Deferred income taxes 0.2 0.2
Total Assets 673.9 692.4
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 12.2 4.8
Current portion of long-term debt 0.1 1.3
Accounts payable-trade 71.3 80.9
Accounts payable-shareholders for dividends 0.6 0.6
Accounts payable-other 18.0 17.2
Allowance for unrealized foreign exchange losses 0.0 0.0
Income taxes 4.3 4.3
Salaries, wages and related liabilities 16.7 16.1
Total current liabilities 123.2 125.2
Long-Term Liabilities:
Employees' termination indemnity 29.2 27.6
Long-term debt 4.8 4.2
Deferred income taxes 0.4 0.4
Deferred income for capital grants 12.7 13.4
Other liabilities 5.3 5.7
Minority Interest 1.0 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 391.9 369.0
Total shareholders' equity 497.3 515.0
Total Liabilities and Shareholders' Equity 673.9 692.4
=========== =========
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
as of September 30, 2004 and 2003
(Expressed in millions of EUR)
September 30 September 30
2004 2003
------------ ------------
Cash flows from operating activities:
Net earnings 27.7 33.7
Depreciation 20.9 17.1
Employees' termination indemnity 1.6 1.8
Deferred income taxes (3.4) 0.9
Minority interest 0.1 -
(Gain) loss on disposal of assets 0.9 0.2
Change in provision for unrealized foreign
exchange (losses) / gain 3.3 (7.2)
Change in assets and liabilities:
Receivables, net 20.9 24.7
Inventories (4.0) (19.1)
Prepaid expenses and accrued income (1.3) (2.8)
Other assets 12.8 9.4
Accounts payable (9.7) (20.8)
Income taxes 0.0 (3.5)
Salaries, wages and related liabilities 0.6 1.8
Other liabilities (0.4) (11.9)
Total adjustments 42.3 (9.4)
Net cash provided by operating activities 70.0 24.3
Cash flows from investing activities:
Property, plant and equipment:
Additions (36.0) (38.5)
Disposals 7.7 0.4
Government grants received 0.0 3.1
Marketable debt securities:
Purchases (0.2) -
Proceeds from maturities 0.0 -
Proceeds from sales 0.2 -
Purchase of business, net of cash acquired 0.0 (4.3)
Purchase of minority interest (2.9) -
Net cash used in investing activities (31.2) (39.3)
Cash flows from financing activities:
Long term debt:
Proceeds 0.6 1.0
Repayments (1.2) (1.6)
Short-term borrowings 7.5 7.3
Exercise of stock options 0.0 0.0
Treasury shares 0.0 0.0
Dividends paid (7.7) (18.0)
Dividends paid to minority shareholders 0.0 0.0
Net cash used in financing activities (0.8) (11.3)
Effect of translation adjustments on cash 0.2 (2.2)
Increase (decrease) in cash and cash
equivalents 38.2 (28.5)
Cash and cash equivalents, beginning of the
year 63.6 96.7
Cash and cash equivalents, end of the period 101.8 68.2
Natuzzi S.p.A.
THIRD QUARTER 2004
FINANCIAL RESULTS TELECONFERENCE
Senior management will review third quarter 2004 financial
results. The review will be followed by a question
answer session.
Pasquale Natuzzi
Chairman of the Board and Chief Executive Officer
Piero Cordero
Chief Financial Officer
Nicola Dell'Edera
Finance Director
and
Fred Starr
President and Chief Executive Officer, Natuzzi Americas
Tuesday, November 16, 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 November 17, 2004.
CONTACT: Natuzzi S.p.A.
Investor Relations Dept.
Tel.: +39-080-8820-812
Fax: +39-080-8820-241
investor_relations@natuzzi.com
or
Corporate Press Office
Tel.: +39-080-8820-124
Fax: +39-080-8820-508
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: 15th November 2004 By: /s/ GIUSEPPE DESANTIS
---------------------
Giuseppe Desantis