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 2007 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. (NYSE: NTZ) Announces Consolidated
First Quarter 2007 Financial Results
1Q07 Financial Highlights
-- Total Net Revenues Down by 18.3% at EUR 153.8 Million and
Seats Sold Down by 17.0% Over 1Q06
-- Operating Loss of EUR 7.9 Million, versus Operating Income of
EUR 8.8 Million In 1Q06
-- Net Losses at EUR 4.7 Million versus Net Earnings of EUR 6.8
Million in 1Q06
SANTERAMO IN COLLE, Bari, Italy--(BUSINESS WIRE)--May 23,
2007--The Board of Directors of Natuzzi S.p.A. (NYSE: NTZ) ('Natuzzi'
or 'the Group'), the world's leading manufacturer of
leather-upholstered furniture, today presented the consolidated
financial statements for the quarter ended on March 31, 2007.
NET SALES
In the quarter ended on March 31, 2007, Natuzzi total net sales
decreased by 18.3 percent at EUR 153.8 million from EUR 188.2 million
reported for the first quarter of 2006. During the same quarter seats
sold decreased by 17.0 percent with respect to one year ago.
During the first quarter of 2007 upholstery net sales were at EUR
136.0 million, down 18.8 percent as compared to EUR 167.4 million
reported for the same comparable period of last year. Other sales
(principally living-room accessories and raw material produced by the
Group and sold to third parties) decreased by 14.4 percent at EUR 17.8
million.
In the three months ended on March 31, 2007, net sales in the
Americas decreased on quarterly basis by 27.3 percent at EUR 46.4
million, by 14.4 percent in Europe at EUR 79.5 million, and by 5.6
percent at EUR 10.1 million in the rest of the world.
During the first three months of 2007, total net sales to our
chain of Divani & Divani by Natuzzi and Natuzzi Stores totaled EUR
28.3 million, down by 17.3 percent with respect to the first quarter
of 2006. During the same period, six new Stores were opened (1 in UK,
1 in Belgium, 1 in Israel, 1 in Australia, 1 in China and 1 in the
U.S.A.), whereas 1 store was closed in Italy, thus bringing the total
number of stores at 283 as of March 31, 2007. At the same date there
were 547 Natuzzi Galleries worldwide.
Leather-upholstered furniture sales for the first quarter of 2007
were at EUR 120.0 million, decreasing by 16.3 percent with respect to
EUR 143.4 million reported one year ago, and fabric-upholstered
furniture sales were at EUR 16.0 million, down by 33.3 percent as
compared with the same period of 2006.
Net sales for the Natuzzi branded products decreased by 25.8
percent at EUR 81.0 million and sales for the Italsofa products by 5.7
percent at EUR 55.0 million over the first quarter 2006.
GROSS & OPERATING RESULTS
For the three-month period ended on March 31, 2007, the Group
reported a gross profit of EUR 46.9 million, a 27.3 decrease from EUR
64.5 million in the first quarter of 2006. As a percentage of sales,
gross margin decreased at 30.5 percent from 34.3 percent reported for
the first quarter of last year mainly as a consequence of reduced
production volumes. In the same period the Group had an operating loss
of EUR 7.9 million, versus an operating income of EUR 8.8 million in
last year comparable period.
FOREX AND TAXES
For the first quarter 2007, the Group reported a net foreign
exchange gain of EUR 0.5 million, versus a net foreign exchange loss
of EUR 0.5 million in the first quarter of last year.
During the same quarter, the Group reported a deferred tax asset
for EUR 1.1 million, as compared with income taxes of EUR 4.0 million
for the same period of 2006.
NET RESULT AND GROUP EARNINGS PER COMPANY'S SHARE
For the quarter ended March 31, 2007, the Group reported net
losses of EUR 4.7 million, or EUR 0.09 losses per share (ADR), versus
net earnings of EUR 6.8 million, or EUR 0.12 earnings per share, in
the first quarter of 2006.
Ernesto Greco, Chief Executive Officer of the Group, commented "As
previously anticipated, first quarter 2007 turnover performance was
affected by the challenging business environment in all the major
markets. In the US, the business level was even more depressed, as
confirmed by other major players, mainly due to the low consumer
confidence and to the sharp decline in the house trade. In addition to
that, the top line was penalized by the minimal ending 2006 order
backlog and by the unfavorable Euro exchange rates against major
currencies. This challenging scenario still continues to have a
negative effect on our performance: Year-to-date total order flow is
down high-single digit as compared to the same period of last year and
could affect the sales performance in the coming months.
Furthermore, over the past months we have been experiencing also a
price pressure in raw materials, leather in particular, that
contributed to the quarterly gross margin decrease.
Although the persistence of such tough business conditions, we
remain committed in investing in the Natuzzi brand repositioning
encouraged by the favorable acceptance of our new models presented
during last international Milan fair. We are continuing the
reorganization process of the retail activities as well as our ongoing
restructuring process of our production to better match our cost
structure with the pace of incoming orders."
CONVERSION RATES
The first quarter 2007 and 2006 dollar figures presented in this
announcement were converted at an average noon buying rate of $1.3109
per EUR and $1.2033 per EUR, respectively.
FIRST QUARTER 2007 TELECONFERENCE
Pasquale Natuzzi, Chairman of the Board, Ernesto Greco, Chief
Executive Officer, Filippo Simonetti, Chief Financial Officer, and
Nicola Dell'Edera, Finance Director, 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 24th, 2007.
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 124 stores, and 1 Natuzzi
Store. Outside Italy, the Group sells to various furniture retailers,
as well as through 158 licensed Divani & Divani by Natuzzi and Natuzzi
Stores.
Natuzzi S.p.A. was listed on the New York Stock Exchange on May
13, 1993. The Group 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 Group'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 Group's
filings with the Securities and Exchange Commission, particularly in
the Group's annual report on Form 20-F. Forward looking statements
speak as of the date they were made, and the Group 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 quarters ended on
March 31, 2007 and 2006 on the basis of Italian GAAP
(Expressed in millions of EUR except per share data)
------------------------------------------------
Three months ended on % Over Percent of
Sales
31-Mar-07 31-Mar-06 (Under) 31-Mar- 31-Mar-
07 06
--------------------- ----------- ----------- -------- ------- -------
Upholstery net sales 136.0 167.4 (18.8)% 88.4% 88.9%
Other sales 17.8 20.8 (14.4)% 11.6% 11.1%
Total Net Sales 153.8 188.2 (18.3)% 100.0% 100.0%
--------------------- ----------- ----------- -------- ------- -------
Purchases (87.2) (79.0) (10.4)% (56.7)% (42.0)%
Labor (24.8) (27.2) 8.8% (16.1)% (14.5)%
Third-party
Manufacturers (4.0) (5.6) 28.6% (2.6)% (3.0)%
Manufacturing Costs (7.7) (7.9) 2.5% (5.0)% (4.2)%
Inventories, net 16.8 (4.0) 520.0% 10.9% (2.1)%
Cost of Sales (106.9) (123.7) 13.6% (69.5)% (65.7)%
--------------------- ----------- ----------- -------- ------- -------
Gross Profit 46.9 64.5 (27.3)% 30.5% 34.3%
--------------------- ----------- ----------- -------- ------- -------
Selling Expenses (43.4) (46.5) 6.7% (28.2)% (24.7)%
General and
Administrative
Expenses (11.4) (9.2) (23.9)% (7.4)% (4.9)%
Operating Income
(Loss) (7.9) 8.8 (189.8)% (5.1)% 4.7%
--------------------- ----------- ----------- -------- ------- -------
Interest Income, net 0.5 0.3 0.3% 0.2%
Foreign Exchange, net 0.5 (0.5) 0.3% (0.3)%
Other Income, net 1.1 2.2 0.7% 1.2%
Earnings (Losses)
before taxes and
minority interest (5.8) 10.8 (153.7)% (3.8)% 5.7%
--------------------------------- ----------- -------- ------- -------
Income taxes 1.1 (4.0) 0.7% (2.1)%
Earnings (Losses)
before minority
interest (4.7) 6.8 (169.1)% (3.1)% 3.6%
--------------------- ----------- ----------- -------- ------- -------
Minority Interest 0.0 0.0 0.0% 0.0%
Net Earnings (Losses) (4.7) 6.8 (169.1)% (3.1)% 3.6%
--------------------- ----------- ----------- -------- ------- -------
Group Earnings
(Losses) per
Company's Share (0.09) 0.12
--------------------------------- ----------- -------- ------- -------
Average Number of
Shares Outstanding* 54,824,227 54,738,538
--------------------------------- ----------- -------- ------- -------
(*) Net of shares
repurchased
----------------------------------------------------------------------
Key Figures in U.S. Three months ended on
dollars (millions)
March 31, 2007 March 31, 2006
--------------------------------- -------------------- ---------------
Total Net Sales 201.6 226.5
Gross Profit 61.5 77.6
Operating Income
(Loss) (10.4) 10.6
Net Earnings (Losses) (6.2) 8.2
Group Earnings
(Losses) per
Company's Share (0.12) 0.14
Average exchange rate
(U.S. dollar per
Euro) 1.3109 1.2033
----------------------------------------------------------------------
GEOGRAPHIC BREAKDOWN
----------------------------------------------------------------------
Sales* Seat Units
Three months % Over Three months ended% Over
ended on on
31- 31- (Under)31-Mar- 31-Mar- (Under)
Mar- Mar- 07 06
07 06
======================================================================
Americas 46.4 63.8 (27.3%)258,753 324,922 (20.4%)
% of total 34.1% 38.1% 41.7% 43.5%
Europe 79.5 92.9 (14.4%)320,083 379,159 (15.6%)
% of total 58.5% 55.5% 51.6% 50.7%
Rest of the world 10.1 10.7 (5.6%) 41,266 43,071 (4.2%)
% of total 7.4% 6.4% 6.7% 5.8%
----------------------------------------------------------------------
TOTAL 136.0 167.4 (18.8%)620,102 747,152 (17.0%)
----------------------------------------------------------------------
* Expressed in millions of EUR
----------------------------------------------------------------------
BREAKDOWN BY COVERING
----------------------------------------------------------------------
Sales* Seat Units
Three months % Over Three months ended% Over
ended on on
31- 31- (Under)31-Mar- 31-Mar- (Under)
Mar- Mar- 07 06
07 06
======================================================================
Leather 120.0 143.4 (16.3%)535,756 613,543 (12.7%)
% of total 88.2% 85.7% 86.4% 82.1%
Fabric 16.0 24.0 (33.3%) 84,346 133,609 (36.9%)
% of total 11.8% 14.3% 13.6% 17.9%
Total 136.0 167.4 (18.8%)620,102 747,152 (17.0%)
----------------------------------------------------------------------
* (Expressed in millions of EUR)
----------------------------------------------------------------------
BREAKDOWN BY BRAND
----------------------------------------------------------------------
Sales* Seat Units
Three months % Over Three months ended% Over
ended on on
31- 31- (Under)31-Mar- 31-Mar- (Under)
Mar- Mar- 07 06
07 06
= ====================================== =======
Natuzzi 81.0 109.1 (25.8%)285,349 387,095 (26.3%)
% of total 59.6% 65.2% 46.0% 51.8%
Italsofa 55.0 58.3 (5.7%)334,753 360,057 (7.0%)
% of total 40.4% 34.8% 54.0% 48.2%
TOTAL 136.0 167.4 (18.8%)620,102 747,152 (17.0%)
----------------------------------------------------------------------
* (Expressed in millions of EUR)
NATUZZI S.P.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet as of
March 31, 2007 and December 31, 2006 (Expressed in millions of EUR)
31-Mar-07 31-Dec-06
---------------------------------------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents 123.6 128.1
Marketable debt securities 0.0 0.0
Trade receivables, net 108.3 119.3
Other receivables 47.5 44.7
Inventories 117.2 100.3
Unrealized foreign exchange gains 4.1 5.5
Prepaid expenses and accrued income 4.0 2.0
Deferred income taxes 10.4 7.5
Total current assets 415.1 407.4
---------------------------------------------------------------------
Non-Current Assets:
Net property, plant and equipment 246.3 246.3
Treasury shares 0.0 0.0
Other assets 18.0 18.7
Deferred income taxes 2.3 2.3
---------------------------------------------------------------------
TOTAL ASSETS 681.7 674.7
---------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 11.7 3.8
Current portion of long-term debt 0.3 0.3
Accounts payable-trade 82.0 79.5
Accounts payable-other 23.5 22.5
Accounts payable shareholders for dividends 0.6 0.6
Unrealized foreign exchange losses 0.0 0.0
Income taxes 3.9 4.6
Salaries, wages and related liabilities 21.9 21.7
Total current liabilities 143.9 133.0
---------------------------------------------------------------------
Long-Term Liabilities:
Employees' leaving entitlement 35.1 35.3
Long-term debt 2.4 2.4
Deferred income taxes 0.0 0.0
Deferred income for capital grants 13.8 14.1
Other liabilities 10.6 10.5
---------------------------------------------------------------------
Minority Interest 0.6 0.6
---------------------------------------------------------------------
Shareholders' Equity:
Share capital 54.8 54.7
Reserves 42.3 42.3
Additional paid-in capital 8.3 8.3
Retained earnings 369.9 373.5
Total shareholders' equity 475.3 478.8
---------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 681.7 674.7
----------------------------------------------------------- ---------
NATUZZI S.P.A. AND SUBSIDIARIES
Unaudited Consolidated Statement of Cash Flows
as of March 31, 2007 and 2006 (Expressed in millions of EUR)
31-Mar-07 31-Mar-06
--------- ---------
Cash flows from operating activities:
Net earnings (losses) (4.7) 6.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7.2 7.6
Employees' leaving entitlement (0.2) 0.2
Deferred income taxes (3.0) (0.8)
Minority interest 0.0 0.0
(Gain) loss on disposal of assets 0.0 0.1
Unrealized foreign exchange (losses) / gain 1.4 (5.4)
Deferred income for capital grants (0.3) (0.3)
Change in assets and liabilities:
Receivables, net 10.9 (1.7)
Inventories (16.8) 4.0
Prepaid expenses and accrued income (2.0) (2.0)
Other assets (2.8) (0.5)
Accounts payable 2.5 13.4
Income taxes (0.7) 1.3
Salaries, wages and related liabilities 0.2 (1.5)
Other liabilities 1.6 2.5
Total adjustments (2.0) 16.9
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (6.7) 23.7
-------------------------------------------------- --------- ---------
Cash flows from investing activities:
Property, plant and equipment:
Additions (6.0) (3.6)
Disposals 0.2 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 PROVIDED (USED) BY INVESTING ACTIVITIES (5.8) (3.6)
-------------------------------------------------- --------- ---------
Cash flows from financing activities:
Long term debt:
Proceeds 0.0 0.1
Repayments 0.0 0.0
Short-term borrowings 7.9 1.3
Dividends paid to shareholders 0.0 0.0
Dividends paid to minority shareholders 0.0 0.0
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 7.9 1.4
-------------------------------------------------- --------- ---------
Effect of translation adjustments on cash 0.1 0.1
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4.5) 21.6
-------------------------------------------------- --------- ---------
Cash and cash equivalents, beginning of the year 128.1 89.7
CASH AND CASH EQUIVALENTS, END OF THE PERIOD 123.6 111.3
-------------------------------------------------- -------------------
CONTACT: Natuzzi S.p.A.
Investor Relations Dept.
Tel.: +39-080-8820-812
investor_relations@natuzzi.com
or
Corporate Press Office
Tel.: +39-080-8820-124
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 23rd, 2007 By: /s/ FILIPPO SIMONETTI
---------------------
Filippo Simonetti