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 May 2005
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-____.)
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: 31st May 2005 By: /s/ GIUSEPPE DESANTIS
----------------------------------
Giuseppe Desantis
Natuzzi Announces First Quarter 2005 Financial Results
SANTERAMO IN COLLE, Bari, Italy--(BUSINESS WIRE)--May 31, 2005--
-- Net sales decreased 13.1 percent over first quarter 2004
-- Net losses of EUR 3.5 million versus net earnings of EUR 9.4
million reported in first quarter 2004
-- Cash flow from operations at EUR 8.7 million
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 announces the approval of the financial results for the first quarter
ended March 31, 2005.
NET SALES
Natuzzi's first-quarter 2005 net sales decreased 13.1 percent to
EUR 166.6 million, or $ 218.4 million, as compared to EUR 191.8
million, or $ 240.0 million, reported in the first quarter 2004.
Over the same comparable period, seats sold decreased 13.1
percent.
In the first quarter of 2005, net upholstery sales were EUR 146.4
million, or $ 192.0 million, 13.6 percent down from EUR 169.5
reported in last year's first quarter. Other sales (principally
living-room accessories and raw materials produced by the Company
and sold to third parties) decreased 9.4 percent to EUR 20.2
million, or $ 26.5 million.
In the first three months of 2005, upholstery sales in the
Americas decreased by 24.7 percent on a quarter-on-quarter- basis
to EUR 59.9 million, or $ 78.5 million. In Europe upholstery sales
were EUR 76.7 million, or $ 100.6 million, down 4.5 percent from
EUR 80.3 million, or $ 100.5 million reported in the first quarter
of 2004. In the Rest of the World upholstery net sales were up 1.0
percent to EUR 9.8, or $ 12.8 million.
In the first quarter 2005, total net sales to Divani & Divani by
Natuzzi, Natuzzi and Kingdom of Leather Stores increased 7.9
percent to EUR 30.0 million, or $ 39.3 million, compared to the
last year's first quarter. During the same quarter four new stores
were opened: one in Italy, one in France and two in Spain, thus
bringing the total number of stores to 271, of which 139 in Italy
and 132 in the rest of the world. As of March 31, 2004 there were
253 stores worldwide.
In the first quarter of 2005, leather-upholstered furniture sales
decreased 12.8 percent to EUR 120.4 million, or $ 157.9 million,
and fabric-upholstered sales by 17.5 percent over last year's
quarter to EUR 26.0 million, or $ 34.1 million.
First quarter 2005 net sales of Natuzzi-branded upholstery were
EUR 105.6 million, or $ 138.5 million, representing a 17.9 percent
decrease from EUR 128.6 million reported in last year's first
quarter. Net sales of Italsofa upholstery were substantially flat
at EUR 40.8 million, or $ 53.5 million.
Pasquale Natuzzi, Chairman and Chief Executive Officer, commented:
"The overall scenario in which the Company is operating is still
characterized by the same mix of unfavorable factors that have
negatively impacted our sales and order flow over the past months:
furniture demand softening in all major markets and aggressive
price competition deriving from low-cost countries located in
Eastern Europe and from China that is even more competitive
compared to the Italian production thanks to the fixed currency
rate with the US Dollar".
GROSS PROFIT & OPERATING INCOME
In the first quarter of 2005, Gross profit decreased by 19.0
percent to EUR 55.1 million, or $ 72.2 million, from EUR 68.0
million, or $ 85.1 million, reported in the prior year first
quarter. Gross profit margin decreased to 33.1 percent from 35.5
percent achieved in first quarter 2004.
In the first quarter 2005 the Group reported a net operating loss
of EUR 1.1, or $ 1.4 million loss, whereas in the same period last
year the Company recorded a net operating income of EUR 13.8
million, or $ 17.3 million.
FOREX & TAXES
In the first quarter of 2005 Natuzzi reported a foreign exchange
loss of EUR 1.5 million, or $ 2.0 million loss, increasing from a
net foreign exchange loss of EUR 0.4 million reported in the
previous year's first quarter.
Income taxes for the first quarter 2005 were EUR 1.0 million, or $
1.3 million. During the same period last year income taxes were
EUR 4.0 million, or $ 5.0 million.
NET INCOME & EARNINGS PER SHARE
In the first-quarter 2005 the Company reported net losses of EUR
3.5 million, or $ 4.6 million net losses, decreasing from net
earnings of EUR 9.4 million, or $ 11.8 million, reported in the
same period last year. Losses per share (ADR) were EUR 0.06, or $
0.08, from EUR 0.17 or $ 0.21 earnings per share reported in the
first quarter 2004.
Pasquale Natuzzi said, "In the first quarter 2005 the Company
reported net losses because of the adverse market and economic
conditions restraining the effectiveness of our marketing
investments and the limited impact of the price increases made in
US to offset the devaluation against the Euro".
CASH FLOW
In the first quarter of 2005 the Company generated EUR 8.7 million
of cash flow from operations, or $11.4 million, a 24.3 percent
decrease from EUR 11.5 million, or $ 14.4 million, generated in
the first three months of 2004 On a per ADR basis, net operating
cash flow was EUR 0.16, or $ 0.21.
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OUTLOOK
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Concluded Mr. Natuzzi: "In the past months, the furniture demand
has been weakening together with a progressive shift of the
consumers' preference towards the promotional products. As a
consequence, year-to-date order flow of the Natuzzi products
manufactured in Italy has decreased by a double digit percentage
versus the same period of 2004, while, over the same periods,
orders for our promotional brand Italsofa manufactured abroad have
grown at a single digit rate.
In light of this, we expect unit sales in 2005 to decrease between
10 and 15 percent versus 2004, while net results should break even
in 2005 and achieve in 2006 a net profit margin in the region of 3
percent as a result of the reorganization plan approved recently
by the Board".
CONVERSION RATES
--------------------------------------------------------------------
The first quarter 2005 and 2004 dollar figures presented in this
announcement were converted at an average noon buying rate of $
1.3112 per EUR and $ 1.2513 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 137 stores, which it licenses to qualified
furniture dealers. Outside Italy, the Company sells to various furniture
retailers, as well as through 135 licensed Divani & Divani by Natuzzi, Natuzzi
Stores and 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.
Forward-Looking Statements
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 first quarter ended March 31, 2005 and 2004 on the
basis of Italian GAAP
(Expressed in millions of EUR except per share data)
1st Quarter % 1st Quarter % %
----------- ----- ----------- ------------
2005 Sales 2004 Sales Change
----------- ----- ----------- ------------
Upholstery net sales 146.4 169.5 -13.6%
Other sales 20.2 22.3 -9.4%
Net Sales 166.6 100% 191.8 100% -13.1%
--------------------------- ----------------- ------------------------
Purchases (79.0) (86.0) -8.1%
Labor (28.2) (27.7) 1.8%
Third-party Manufacturers (6.6) (8.5) -22.4%
Manufacturing Costs (8.1) (7.5) 8.0%
Inventories, net 10.4 5.9 76.3%
Cost of Sales (111.5) (123.8) -9.9%
--------------------------- ----------------- ------------------------
Gross Profit 55.1 33.1% 68.0 35.5% -19.0%
--------------------------- ----------------- ------------------------
Selling Expenses (46.0) (44.7) 3.0%
General and Administrative
Expenses (10.2) (9.5) 6.9%
Operating Income (Loss) (1.1) -0.7% 13.8 7.2%-108.0%
--------------------------- ----------------- ------------------------
Interest Income, net 0.1 0.0
Foreign Exchange, net (1.5) (0.4)
Other Income, net 0.0 0.1
Earnings (Losses) before
taxes and minority interest (2.5) 13.5 -118.5%
--------------------------------------- ----------- -------
Income taxes (1.0) (4.0) -75.0%
Earnings (Losses) before
minority interest (3.5) 9.5 -136.8%
--------------------------------------- ----------- -------
Minority Interest 0.0 0.1
Net Earnings (Losses) (3.5) -2.1% 9.4 4.9%-137.2%
=========================== ================= ========================
Earnings (Losses) per Share (0.06) 0.17 -137.2%
--------------------------- ----------- ----------- -------
Average Number of Shares
Outstanding 54,681,628 54,681,628
----------------------------------------------------------------------
KEY FIGURES IN U.S. DOLLARS (millions)
1st 1st
Quarter Quarter
2005 2004
-------- --------
Net Sales 218.4 240.0
Gross Profit 72.2 85.1
Operating Income (Loss) (1.4) 17.3
Net Earnings (Losses) (4.6) 11.8
Earnings (Losses) per Share in U.S. dollars (0.08) 0.21
Average exchange rate (U.S. dollar per Euro) 1.3112 1.2513
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in
millions of EUR)
1st 1st 1st 1st
Quarter Quarter % Quarter Quarter %
----------------- ------ -------- -------- ------
2005 2004 Change 2005 2004 Change
----------------- ------ -------- -------- ------
Americas 59.9 79.5 -24.7% 348,355 450,283 -22.6%
% of total 40.9% 46.9% 49.5% 55.6%
Europe 76.7 80.3 -4.5% 314,272 316,488 -0.7%
% of total 52.4% 47.4% 44.6% 39.1%
Rest of world 9.8 9.7 1.0% 41,447 43,352 -4.4%
% of total 6.7% 5.7% 5.9% 5.4%
TOTAL 146.4 169.5 -13.6% 704,074 810,123 -13.1%
-------------------- ----------------- ------ -------- -------- ------
BREAKDOWN BY COVERING
Sales Seat Units
(Expressed in
millions of EUR)
1st 1st 1st 1st
Quarter Quarter % Quarter Quarter %
-------- -------- ------ -------- -------- ------
2005 2004 Change 2005 2004 Change
-------- -------- ------ -------- -------- ------
Leather 120.4 138.0 -12.8% 539,511 613,075 -12.0%
% of total 82.2% 81.4% 76.6% 75.7%
Fabric 26.0 31.5 -17.5% 164,563 197,048 -16.5%
% of total 17.8% 18.6% 23.4% 24.3%
TOTAL 146.4 169.5 -13.6% 704,074 810,123 -13.1%
-------------------- -------- -------- ------ -------- -------- ------
BREAKDOWN BY BRAND
Sales Seat Units
(Expressed in
millions of EUR)
1st 1st 1st 1st
Quarter Quarter % Quarter Quarter %
-------- -------- ------ -------- -------- ------
2005 2004 Change 2005 2004 Change
-------- -------- ------ -------- -------- ------
Natuzzi 105.6 128.6 -17.9% 418,676 529,634 -20.9%
% of total 72.1% 75.9% 59.5% 65.4%
Italsofa 40.8 40.9 -0.2% 285,398 280,489 1.8%
% of total 27.9% 24.1% 40.5% 34.6%
TOTAL 146.4 169.5 -13.6% 704,074 810,123 -13.1%
-------------------- -------- -------- ------ -------- -------- ------
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet
as of March 31, 2005 and December 31, 2004
(Expressed in millions of EUR)
March December
31, 31,
2005 2004
Current Assets:
Cash and cash equivalents 88.9 87.3
Marketable debt securities 0.0 0.0
Trade receivables, net 136.7 137.6
Other receivables 37.7 41.2
Inventories 123.0 112.6
Unrealized foreign exchange gain 0.7 7.1
Prepaid expenses and accrued income 4.2 2.4
Deferred income taxes 0.9 1.2
Total current assets 392.1 389.4
------ --------
Non-Current Assets:
Net property, plant and equipment 274.1 272.0
Treasury shares 0.0 0.0
Other assets 10.8 11.2
Deferred income taxes 0.6 0.6
Total Assets 677.6 673.2
====== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 6.3 5.6
Current portion of long-term debt 0.1 0.6
Accounts payable-trade 88.2 83.7
Accounts payable-shareholders for dividends 0.6 0.6
Accounts payable-other 21.8 19.7
Allowance for unrealized foreign exchange losses 0.0 0.0
Income taxes 2.1 2.5
Salaries, wages and related liabilities 18.9 18.7
Total current liabilities 138.0 131.4
------ --------
Long-Term Liabilities:
Employees' termination indemnity 30.3 29.6
Long-term debt 5.1 5.0
Deferred income taxes 0.4 0.4
Deferred income for capital grants 12.3 12.5
Other liabilities 6.1 5.4
Minority Interest 0.9 0.9
Shareholders' Equity:
Share capital 54.7 54.7
Reserves 42.3 42.3
Additional paid-in capital 8.3 8.3
Retained earnings 379.2 382.7
Total shareholders' equity 484.5 488.0
------ --------
Total Liabilities and Shareholders' Equity 677.6 673.2
====== ========
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
as of March 31, 2005 and 2004
(Expressed in millions of EUR)
March March
31 31
2005 2004
------------
Cash flows from operating activities:
Net earnings (3.5) 9.4
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 6.9 6.7
Employees' leaving entitlement 0.7 0.3
Deferred income taxes 0.3 (2.3)
Minority interest 0.0 0.1
(Gain) loss on disposal of assets 0.1 0.0
Change in provision for unrealized foreign exchange
(losses) / gain 6.4 5.9
Gain on disposal of business 0.0 0.0
Impairment losses 0.0 0.0
Change in assets and liabilities:
Receivables, net 0.9 (9.6)
Inventories (10.4) (5.9)
Prepaid expenses and accrued income (1.8) (1.8)
Other assets 3.4 7.1
Accounts payable 4.5 2.3
Income taxes (0.5) (1.5)
Salaries, wages and related liabilities 0.2 (0.6)
Other liabilities 1.5 1.4
------ -----
Total adjustments 12.2 2.1
------ -----
Net cash provided by operating activities 8.7 11.5
------ -----
Cash flows from investing activities:
Property, plant and equipment:
Additions (8.4) (8.7)
Disposals 0.0 6.6
Government grants received 0.0 0.0
Marketable debt securities:
Purchases 0.0 0.0
Proceeds from maturities 0.0 0.0
Proceeds from sales 0.0 0.0
Purchase of business, net of cash acquired 0.0 (0.1)
Purchase of minority interest 0.0 (0.0)
Disposal of business 0.0
------ -----
Net cash used in investing activities (8.4) (2.2)
Cash flows from financing activities:
Long term debt:
Proceeds 0.0 0.0
Repayments (0.3) (0.5)
Short-term borrowings 0.8 1.8
Exercise of stock options 0.0 0.0
Treasury shares 0.0 0.0
Dividends paid 0.0 0.0
Dividends paid to minority shareholders (0.1) 0.0
------ -----
Net cash used in financing activities 0.4 1.3
------ -----
Effect of translation adjustments on cash 0.9 0.3
------ -----
Increase (decrease) in cash and cash equivalents 1.6 10.9
Cash and cash equivalents, beginning of the year 87.3 63.6
Cash and cash equivalents, end of the period 88.9 74.5
Natuzzi S.p.A.
FIRST QUARTER 2005
FINANCIAL RESULTS TELECONFERENCE
Senior management will review first-quarter 2005 financial results.
The review will be followed by a question and answer session.
Pasquale Natuzzi
Chairman of the Board and Chief Executive Officer
Nicola Dell'Edera
Finance Director
and
Fred Starr
President and Chief Executive Officer of Natuzzi Americas Inc.
Wednesday, June 1, 2001
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 15:00 Italian time on June 13, 2005.
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