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 2006 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 S.p.A. Announces First Quarter 2006 Financial Results
SANTERAMO IN COLLE, Bari, Italy--(BUSINESS WIRE)--May 24, 2006--Natuzzi
S.p.A. (NYSE: NTZ):
First Quarter 2006 Financial Highlights
-- Net Sales Increased 13.0%, Units Sold up 6.1% over 1Q05
-- Net Earnings at Eur 6.8 Million versus Net Losses of Eur 3.5
Million in 1Q05
-- Operating Cash Flow at Eur 23.7 up from Eur 8.7 Million in
1Q05
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 three months ended
on March 31, 2006.
NET SALES
In the first quarter ended on March 31, 2006, Natuzzi total net sales
increased by 13.0 percent at EUR 188.2 million, or $226.5 million, as compared
to EUR 166.6 million, or $218.4 million, reported for first quarter 2005. During
the same period total seats sold increased by 6.1 percent.
During the first three months of 2006, upholstery net sales were at EUR
167.4 million, or $201.4 million, up 14.3 percent from EUR 146.4 million, or
$192.0 million, reported for the same period last year. Other sales (principally
living-room accessories and raw materials produced by the Company and sold to
third parties) increased by 3.0 percent at EUR 20.8 million, or $25.0 million.
In the first quarter of 2006 net sales in the Americas were at EUR 63.8
million, or $76.8 million, increasing by 6.5 percent from EUR 59.9 million, or
$78.5 million, reported in first quarter 2005. In Europe sales were at EUR 92.9
million, or $111.8 million, up by 21.1 percent from EUR 76.7 million, or $100.6
million, reported in the same quarter last year, and in the rest of the world
net sales were up 9.2 percent at EUR 10.7 million, or $12.9 million, from EUR
9.8 million, or $12.8 million, reported in the previous year's comparable
period.
In the quarter ended on March 31, 2006, total net sales to our chain of
Divani & Divani by Natuzzi Stores and Natuzzi Stores were at EUR 34.2 million,
or $41.2 million, increasing by 14.0 percent as compared to EUR 30.0 million, or
$39.3 million reported one year ago. During the same quarter six new stores were
opened (2 in France and one each in Croatia, Russia, Poland and Australia),
whereas sixteen stores were closed (9 in UK, 4 in Italy, 2 in Greece, and 1 in
Lebanon), thus bringing the total number of stores at 280 as at March 31, 2006.
At the same date there were 594 galleries, 11 less than three months earlier.
Leather-upholstered furniture sales in the first quarter 2006 were at EUR
143.4 million, or $172.6 million, 19.1 percent up from last year's first
quarter, whereas over the same period fabric-upholstered furniture decreased by
7.7 percent, at EUR 24.0 million, or $28.9 million.
First quarter 2006 net sales for the Natuzzi branded products, representing
65.2 percent of total upholstery net sales, were at EUR 109.1 million, or $131.3
million, 3.5 percent up with respect to the last year's comparable quarter, and
sales for the Italsofa products at EUR 58.3 million, or $70.2 million, from EUR
41.0 million, or $53.8 million, in first quarter 2005.
Pasquale Natuzzi, Chairman and Chief Executive Officer, commented: "First
quarter 2006 results confirmed the recovery in sales, particularly consistent in
Europe, although the economic and currency scenario in which the Company has
been operating remains unfavorable as a whole.
We continue to see mixed results, with the Italsofa line that drove the
quarterly performance, and the Natuzzi brand still curbed by a deflationary
environment, particularly evident in U.S."
GROSS PROFIT & OPERATING INCOME
For the three months ended on March 31, 2006, Natuzzi's gross profit was at
EUR 64.5 million, or $77.6 million, 17.1 percent up from EUR 55.1 million, or
$72.2 million, reported one year earlier. As a percentage of sales, gross profit
margin increased at 34.3 percent from 33.1 percent in the first quarter 2005.
Over the same period, the Company reported an operating income of EUR 8.8
million, or $10.6 million, versus an operating loss of EUR 1.1 million, or $1.4
million, in first quarter 2005.
FOREX & TAXES
For the first quarter 2006 the Company reported a net foreign exchange loss
of EUR 0.5 million, or $0.6 million, as compared to a net foreign exchange loss
of EUR 1.5 million, or $2.0 million, reported in last year's comparable period.
Over the same period, Company's income taxes were at EUR 4.0 million, or
$4.8 million, as compared to EUR 1.0 million income taxes, or $1.3 million, in
first quarter 2005.
NET INCOME & EARNINGS PER SHARE
In the first three months of 2006, the Company reported net earnings of EUR
6.8 million, or $8.2 million, versus a net loss of EUR 3.5 million, or $4.6
million, in first quarter 2005. Earnings per share (ADR) were EUR 0.12, or
$0.14, from EUR 0.06 losses per share, or $ 0.08, reported for the first quarter
of 2005.
Pasquale Natuzzi continued: "After a difficult year in which the Company
reported net losses for the first time ever, the Company is back to
profitability as a result of the restructuring actions we have been implementing
since June 2005 - namely, a more efficient cost management and the closing of
non-performing retail units - together with more favorable currency conditions
in the period".
CASH FLOW
During the first three months of 2006, the Company generated EUR 23.7
million of cash flow from operations, or $28.5 million, increasing from EUR 8.7
million, or $11.4 million, generated in the same period of last year.
On a per ADR basis, net operating cash flow was EUR 0.43, or $0.52, versus
EUR 0.16, or $ 0.21 generated during the first three months of 2005.
OUTLOOK
Concluded Mr. Natuzzi: "The positive performance achieved in the first
quarter 2006 is an encouraging sign for the near future.
However, we are aware that rising energy prices, the current unfavorable
level of the Euro against the US dollar, as well as upward trending interest
rates, will continue to challenge consumers' discretionary spending and, as a
consequence, the furniture industry. In consideration of this we consider the
current restructuring process of our operations and the improvement of retail
activities fundamental for the competitiveness of the Company.
In light of the above, we confirm the previously announced targets for the
whole 2006 of a positive net profit margin at most at 3 percent together with an
increase in units sold of about 5 percent."
CONVERSION RATES
The first quarter 2006 and 2005 dollar figures presented in this
announcement were converted at an average noon buying rate of $1.2033 per EUR
and $1.3112 per EUR, respectively.
FIRST QUARTER 2006 TELECONFERENCE
Pasquale Natuzzi, Chief Executive Officer and Chairman, Daniele Tranchini,
Chief Sales & Marketing Officer, Nicola Dell'Edera, Finance Director and Chief
Financial Officer a.i., and Fred Starr, Chief Executive Officer and President of
Natuzzi Americas, will discuss financial results, followed by a question and
answer session, in a teleconference at 10:00 a.m. New York time (3:00 p.m.
London time - 4:00 p.m. Italian time) on Thursday May 25th, 2006.
Replay of this event will be available on our web-site, www.natuzzi.com,
starting from 15:00 Italian time, on Friday May 26th, 2006.
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
123 markets on 5 continents.
Since 1990, Natuzzi has sold its furnishings in Italy through the popular
Divani & Divani by Natuzzi chain of 131 stores, which it licenses to qualified
furniture dealers. Outside Italy, the Company sells to various furniture
retailers, as well as through 149 licensed Divani & Divani by Natuzzi Stores and
Natuzzi 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, 2006 and 2005 on the basis of Italian GAAP
(Expressed in millions of EUR except per share data)
Three months ended on % Over Percentage of Sales
31-Mar-06 31-Mar-05 (Under) 31-Mar-06 31-Mar-05
---------------- ----------- ----------- --------- -------- ---------
Upholstery net
sales 167.4 146.4 14.3% 88.9% 87.9%
Other sales 20.8 20.2 3.0% 11.1% 12.1%
---------------- ----------- ----------- --------- -------- ---------
Net Sales 188.2 166.6 13.0% 100.0% 100.0%
---------------- ----------- ----------- --------- -------- ---------
Purchases (79.0) (79.0) 0.0% ( 42.0)% ( 47.4)%
Labor (27.2) (28.2) 3.5% ( 14.5)% ( 16.9)%
Third-party
Manufacturers (5.6) (6.6) 15.2% ( 3.0)% ( 4.0)%
Manufacturing
Costs (7.9) (8.1) 2.5% ( 4.2)% ( 4.9)%
Inventories, net (4.0) 10.4 ( 138.5)% ( 2.1)% 6.2%
---------------- ----------- ----------- --------- -------- ---------
Cost of Sales (123.7) (111.5) ( 10.9)% ( 65.7)% ( 66.9)%
---------------- ----------- ----------- --------- -------- ---------
Gross Profit 64.5 55.1 17.1% 34.3% 33.1%
---------------- ----------- ----------- --------- -------- ---------
Selling Expenses (46.5) (46.0) ( 1.1)% ( 24.7)% ( 27.6)%
General and
Administrative
Expenses (9.2) (10.2) 9.8% ( 4.9)% ( 6.1)%
---------------- ----------- ----------- --------- -------- ---------
Operating Income
(Loss) 8.8 (1.1) 900.0% 4.7% ( 0.7)%
---------------- ----------- ----------- --------- -------- ---------
Interest Income,
net 0.3 0.1 0.2% 0.1%
Foreign
Exchange, net (0.5) (1.5) ( 0.3)% ( 0.9)%
Other Income,
net 2.2 0.0 1.2% 0.0%
---------------- ----------- ----------- --------- -------- ---------
Earnings (Losses)
before taxes and
minority
interest 10.8 (2.5) 532.0% 5.7% ( 1.5)%
----------------- ----------- ----------- --------- -------- ---------
Income taxes (4.0) (1.0) ( 2.1)% ( 0.6)%
---------------- ----------- ----------- --------- -------- ---------
Earnings (Losses)
before minority
interest 6.8 (3.5) 294.3% 3.6% ( 2.1)%
----------------- ----------- ----------- --------- -------- ---------
Minority
Interest 0.0 0.0 0.0% 0.0%
Net Earnings
(Losses) 6.8 (3.5) 294.3% 3.6% ( 2.1)%
---------------- ----------- ----------- --------- -------- ---------
Earnings
(Losses) Per
Share 0.12 (0.06)
---------------- ----------- ----------- --------- -------- ---------
Average Number of
Shares
Outstanding* 54,738,538 54,681,628
----------------- ----------- ----------- --------- -------- ---------
(*) Net of shares repurchased 1 EUR = 1,936.27 ITL
----------------- ----------------------------------------------------
Key Figures in Three months ended on
U.S. dollars
(millions) March 31, 2006 March 31, 2005
----------------- ----------- --------------------- ------------------
Net Sales 226.5 218.4
Gross Profit 77.6 72.2
Operating Income
(Loss) 10.6 (1.4)
Net Earnings
(Losses) 8.2 (4.6)
Earnings
(Losses) per
Share 0.14 (0.08)
Average exchange rate (U.S.
dollar per Euro) 1.2033 1.3112
----------------------------------------------------------------------
GEOGRAPHIC BREAKDOWN
---------------------- ------ ------ ------- -------- -------- -------
Sales* Seat Units
1st Quarter % Over 1st Quarter % Over
2006 2005 (Under) 2006 2005 (Under)
====================== ====== ====== ======= ======== ======== =======
Americas 63.8 59.9 6.5% 324,922 348,355 (6.7%)
% of total 38.1% 40.9% 43.5% 49.5%
---------------------- ------ ------ ------- -------- -------- -------
Europe 92.9 76.7 21.1% 379,159 314,272 20.6%
% of total 55.5% 52.4% 50.7% 44.6%
---------------------- ------ ------ ------- -------- -------- -------
Rest of world 10.7 9.8 9.2% 43,071 41,447 3.9%
% of total 6.4% 6.7% 5.8% 5.9%
---------------------- ------ ------ ------- -------- -------- -------
TOTAL 167.4 146.4 14.3% 747,152 704,074 6.1%
---------------------- ------ ------ ------- -------- -------- -------
* Expressed in millions of EUR
BREAKDOWN BY COVERING
---------------------- ------ ------ ------- -------- -------- -------
Sales* Seat Units
1st Quarter % Over 1st Quarter % Over
2006 2005 (Under) 2006 2005 (Under)
====================== ====== ====== ======= ======== ======== =======
Leather 143.4 120.4 19.1% 613,543 539,511 13.7%
% of total 85.7% 82.2% 82.1% 76.6%
---------------------- ------ ------ ------- -------- -------- -------
Fabric 24.0 26.0 (7.7%) 133,609 164,563 (18.8%)
% of total 14.3% 17.8% 17.9% 23.4%
---------------------- ------ ------ ------- -------- -------- -------
TOTAL 167.4 146.4 14.3% 747,152 704,074 6.1%
---------------------- ------ ------ ------- -------- -------- -------
* (Expressed in millions of EUR)
BREAKDOWN BY BRAND
---------------------- ------ ------ ------- -------- -------- -------
Sales* Seat Units
1st Quarter % Over 1st Quarter % Over
2006 2005 (Under) 2006 2005 (Under)
====================== ====== ====== ======= ======== ======== =======
Natuzzi 109.1 105.4 3.5% 387,095 418,676 (7.5%)
% of total 65.2% 72.0% 51.8% 59.5%
---------------------- ------ ------ ------- -------- -------- -------
Italsofa 58.3 41.0 42.2% 360,057 285,398 26.2%
% of total 34.8% 28.0% 48.2% 40.5%
---------------------- ------ ------ ------- -------- -------- -------
TOTAL 167.4 146.4 14.3% 747,152 704,074 6.1%
---------------------- ------ ------ ------- -------- -------- -------
NATUZZI S.P.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet as of March 31, 2006
and December 31, 2005 (Expressed in millions of EUR)
31-Mar-06 31-Dec-05
-------------------------------------------- ------------- ----------
ASSETS
Current Assets:
Cash and cash equivalents 111.3 89.7
Marketable debt securities 0.0 0.0
Trade receivables, net 125.4 123.6
Other receivables 46.9 46.3
Inventories 111.7 115.7
Unrealized foreign exchange gains 0.6 0.0
Prepaid expenses and accrued income 4.5 2.6
Deferred income taxes 7.4 6.6
-------------------------------------------- ------------- ----------
Total current assets 407.8 384.5
-------------------------------------------- ------------- ----------
Non-Current Assets:
Net property, plant and equipment 256.9 262.8
Treasury shares 0.0 0.0
Other assets 15.9 16.6
Deferred income taxes 1.1 1.1
-------------------------------------------- ------------- ----------
TOTAL ASSETS 681.7 665.0
-------------------------------------------- ------------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 9.1 7.7
Current portion of long-term debt 0.4 0.4
Accounts payable-trade 86.9 73.5
Accounts payable-other 25.8 24.2
Accounts payable shareholders for
dividends 0.6 0.6
Unrealized foreign exchange losses 0.0 4.8
Income taxes 4.2 2.9
Salaries, wages and related liabilities 20.5 22.1
-------------------------------------------- ------------- ----------
Total current liabilities 147.5 136.2
-------------------------------------------- ------------- ----------
Long-Term Liabilities:
Employees' leaving entitlement 32.4 32.3
Long-term debt 3.6 3.6
Deferred income taxes 0.0 0.0
Deferred income for capital grants 14.5 14.8
Other liabilities 4.4 4.4
-------------------------------------------- ------------- ----------
Minority Interest 0.8 0.7
-------------------------------------------- ------------- ----------
Shareholders' Equity:
Share capital 54.7 54.7
Reserves 42.3 42.3
Additional paid-in capital 8.3 8.3
Retained earnings 373.2 367.7
-------------------------------------------- ------------- ----------
Total shareholders' equity 478.5 473.0
-------------------------------------------- ------------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 681.7 665.0
---------------------------------------------------------- ----------
NATUZZI S.P.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
as of March 31, 2006 and 2005 (Expressed in millions of EUR)
31-Mar-06 31-Mar-05
---------- ----------
Cash flows from operating activities:
Net earnings (losses) 6.8 (3.5)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7.6 6.9
Employees' leaving entitlement 0.2 0.7
Deferred income taxes (0.8) 0.3
Minority interest 0.0 0.0
(Gain) loss on disposal of assets 0.1 0.1
Unrealized foreign exchange (losses) / gain (5.4) 6.4
Deferred income for capital grants (0.3) 0.0
Change in assets and liabilities:
Receivables, net (1.7) 0.9
Inventories 4.0 (10.4)
Prepaid expenses and accrued income (2.0) (1.8)
Other assets (0.5) 3.4
Accounts payable 13.4 4.5
Income taxes 1.3 (0.5)
Salaries, wages and related liabilities (1.5) 0.2
Other liabilities 2.5 1.5
------------------------------------------------ ---------- ----------
Total adjustments 16.9 12.2
------------------------------------------------ ---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 23.7 8.7
------------------------------------------------ ---------- ----------
Cash flows from investing activities:
Property, plant and equipment:
Additions (3.6) (8.4)
Disposals 0.0 0.0
Government grants received 0.0 0.0
Marketable debt securities:
Proceeds from sales 0.0 0.0
Purchase of business, net of cash acquired 0.0 0.0
Disposal of business 0.0 0.0
------------------------------------------------ ---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (3.6) (8.4)
------------------------------------------------ ---------- ----------
Cash flows from financing activities:
Long term debt:
Proceeds 0.1 0.0
Repayments 0.0 (0.3)
Short-term borrowings 1.3 0.8
Dividends paid to shareholders 0.0 0.0
Dividends paid to minority shareholders 0.0 (0.1)
------------------------------------------------ ---------- ----------
NET CASH USED IN FINANCING ACTIVITIES 1.4 0.4
------------------------------------------------ ---------- ----------
Effect of translation adjustments on cash 0.1 0.9
------------------------------------------------ ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 21.6 1.6
------------------------------------------------ ---------- ----------
Cash and cash equivalents, beginning of the
year 89.7 87.3
------------------------------------------------ ---------- ----------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD 111.3 88.9
------------------------------------------------ ---------- ----------
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
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: May 24th, 2006 By: /s/ GIUSEPPE DESANTIS
---------------------
Giuseppe Desantis