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 March 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's Board of Directors Approves Fourth-Quarter and
Full Year 2003 Financial Results
SANTERAMO IN COLLE, BARI, Italy--(BUSINESS WIRE)--March 25, 2004--
-- Net sales increased 3.5% over fourth quarter 2002, but
decreased 4.4% on a year- over-year basis
-- Units sold grew 6.2% over the prior year's quarter and
1.0%year-over-year
-- Net profit margin at 1.7% in the fourth- quarter and 4.8% on a
full- year basis
-- 39 new stores and 256 galleries opened in 2003
-- Annual dividend of EUR 0.14 per ADR or Ordinary Share proposed
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 fourth quarter and fiscal year ended
December 31, 2003 and proposes annual dividend of EUR 0.14 per ADR or
ordinary share.
NET SALES
Natuzzi's fourth-quarter 2003 net sales were EUR 209.6 million or
$ 249.4 million, up 3.5 percent from EUR 202.6 or $ 202.7 in the prior
year's quarter. In the same periods, seats sold increased 6.2%. In
2003 net sales decreased 4.4 percent over 2002 to EUR 769.6 million or
$ 870.9 million while seats sold increased 1.0%.
In fourth-quarter 2003, net upholstery sales decreased 0.4 percent
to EUR 182.5 million or $ 217.2 million compared to fourth-quarter
2002, while other sales (principally living-room accessories and raw
materials produced by the Company and sold to third parties) increased
40.4 percent to EUR 27.1 million, or $ 32.2 million.
In the last quarter of 2003, upholstery sales in the Americas
decreased 6.6 percent to EUR 79.4 million, or $ 94.5 million, as
consequence of a higher conversion rate. In Europe, upholstery sales
increased 2.9 percent to EUR 91.7, or $ 109.1 million. In the Rest of
the World upholstery sales increased 23.7 percent over fourth-quarter
2002 to EUR 11.4 million, or $ 13.6 million.
Total net sales to Divani & Divani by Natuzzi and Natuzzi stores
were substantially flat in the fourth-quarter at EUR 29.6 million, or
$ 35.2 million. During the quarter, a total of 19 new stores were
opened in Italy, Australia, Switzerland, Spain and China. Net sales to
the furniture chain Kingdom of Leather, acquired in May 2003, were EUR
1.8 million or $ 2.3 million. As of December 31, 2003, the total
number of stores was 137 in Italy and 109 abroad, while one year
before they were 125 in Italy and 69 outside Italy.
In fourth-quarter 2003 leather-upholstered furniture sales were
EUR 149.5 million, or $ 177.9 million, while fabric-upholstered sales
rose 12.6 percent over last year's quarter to EUR 33.0 million, or $
39.3 million.
Fourth-quarter 2003 net sales of Natuzzi-branded furniture were
EUR 142.7 million, or $ 169.8 million, down 4.8 percent versus last
year's quarter. During the same period, net sales of Italsofa
furniture were EUR 39.8 million, or $ 47.4 million, up 19.2 percent
compared to EUR 33.4 million, or $ 33.4 million, reported in
fourth-quarter 2002.
Pasquale Natuzzi, Chairman and Chief Executive Officer, commented:
"The decrease in sales reported in 2003, compared to 2002, was due to
the unfavorable translation effect caused by the strong appreciation
of the Euro against the US Dollar and was only partially offset by a
marginal increase in seats sold. In a market dominated by a fierce
price competition, Italsofa, our promotional brand, continued its
double digit growth, while Natuzzi, the brand addressing the
medium-high end of the market, reported lower sales."
GROSS PROFIT & OPERATING INCOME
Gross profit in fourth-quarter 2003 decreased 0.8 percent to EUR
72.2 million, or $ 85.9 million, compared to the same quarter in 2002.
Over the same period, gross profit margin decreased to 34.4 percent
from 35.9 percent.
Fourth-quarter 2003 operating income was EUR 10.4 million while
the operating margin for each year comparable quarter was 5.0 percent
and 9.8 percent, respectively.
FOREX & TAXES
In fourth quarter 2003 Natuzzi reported a foreign exchange loss of
EUR 1.4 million, or $ 1.7 million, versus a net forex gain of EUR 0.3
reported in fourth quarter 2002, and a tax credit of EUR 0.5 million,
or $ 0.6 million.
NET INCOME & EARNINGS PER SHARE
Fourth-quarter 2003 net income decreased 80.4 percent from last
year's quarter to EUR 3.6 million, or $ 4.3 million, while earnings
per share (ADR) were EUR 0.07, or $ 0.08. For the twelve-months ended
December 31, 2003, net income decreased 59.2 percent to EUR 37.3
million, or $ 42.2 million and earnings per share (ADR) were EUR 0.68,
or $ 0.77, from EUR 1.67, or $ 1.58, reported in the prior year's
comparable period.
Pasquale Natuzzi said, "In the fourth-quarter of 2003, the
Company's profitability was affected by an extraordinary loss and the
same factors reported in the previous three quarters: a strong
appreciation of the Euro, higher investments in advertising and new
store and gallery openings, and the persistent pricing pressure coming
from low-cost countries."
CASH FLOW
Net cash flow from operations for the full year 2003 was EUR 39.1
million, or $ 44.2 million from the EUR 101.1 million, or $ 101.1
million, generated in 2002. On a per ADR basis, net operating cash
flow was EUR 0.72, or $ 0.81.
OUTLOOK
Concluded Mr. Natuzzi: "The uncertain global economic situation,
the unfavorable outlook for the European currency and the competition
coming from low cost countries, especially those whose currency is
pegged to the US Dollar, represent a challenge for the furniture
industry and the Company. In this scenario, we remain focused on
strengthening the Natuzzi brand and on increasing our market share of
the promotional segment of the market using Italsofa brand.
In light of the above, as well as encouraging order growth in the
first eleven weeks of 2004 and planned improvements in operating
efficiencies, we expect to deliver approximately a 5 percent
year-over-year increase in seats sold and a net profit margin in the
region of 5 percent."
ANNUAL DIVIDEND
The Directors will propose an annual dividend of EUR 0.14 per ADR
at the General Shareholders' Meeting to be held on April 29, 2004 (on
first call) and if necessary on April 30, 2004 (on second call).
CONVERSION RATES
The fourth-quarter 2003 and 2002 dollar figures presented in this
announcement were converted at an average noon buying rate of $ 1.1900
per EUR and $ 1.0003 per EUR, respectively. The 2003 and 2002
full-year figures were converted at an average noon buying rate of $
1.1316 per EUR and $ 0.9459 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 123 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 126 stores, which it
licenses to qualified furniture dealers. Outside Italy, the Company
sells to various furniture retailers, as well as through 70 licensed
Divani & Divani by Natuzzi and Natuzzi branded 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 full year ended December 31, 2003 and 2002
on the basis of Italian GAAP
(expressed in millions of EUR except per share data)
Dec., 31 % Dec., 31 % %
----------- ----- ----------- ----- -------
2003 Sales 2002 Sales Change
----------- ----- ----------- ----- -------
Upholstery net sales 674.0 734.7 -8.3%
Other sales 95.6 70.4 35.8%
----------- -----------
Net Sales 769.6 100% 805.1 100% -4.4%
Purchases (355.9) (338.5) 5.1%
Labor (104.5) (106.9) -2.2%
Third-party Manufacturers (32.8) (38.6) -15.0%
Manufacturing Costs (29.0) (29.6) -2.0%
Inventories, net 13.4 (3.8) -452.6%
----------- -----------
Cost of Sales (508.8) (517.4) -1.7%
----------- -----------
Gross Profit 260.8 33.9% 287.7 35.7% -9.4%
Selling Expenses (179.3) (145.4) 23.3%
General and Administrative
Expenses (39.2) (40.5) -3.2%
----------- -----------
Operating Income 42.3 5.5% 101.8 12.6% -58.4%
Interest Income, net 0.5 1.6
Foreign Exchange, net 6.3 9.3
Other Income, net (3.1) 3.8
----------- -----------
Earnings before taxes and
minority interest 46.0 116.5 -60.5%
Income taxes (8.5) (25.0) -66.0%
----------- -----------
Earnings before minority
interest 37.5 91.5 -59.0%
Minority Interest (0.2) (0.1)
----------- -----------
Net Earnings 37.3 4.8% 91.4 11.4% -59.2%
=========== ===========
Earnings per Share 0.6821 1.6715 -59.2%
=============================
Average Number of Shares
Outstandings(*) 54,681,628 54,681,628
(*) Net of shares repurchased 1 EUR = 1,936.27 ITL
KEY FIGURES IN U.S. DOLLARS (millions)
Dec. 31, Dec. 31,
2003 2002
-------- --------
Net Sales 870.9 761.5
Gross Profit 295.1 272.1
Operating Profit 47.9 96.3
Net Earnings 42.2 86.5
Earnings per Share in U.S. dollars 0.7718 1.5811
Average exchange rate (U.S. dollar per Euro) 1.1316 0.9459
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statement of Earnings
for the fourth-quarter ended December 31, 2003 and 2002
on the basis of Italian GAAP
(expressed in millions of EUR except per share data)
4th Quarter % 4th Quarter % %
----------- ----- ----------- ----- -------
2003 Sales 2002 Sales Change
----------- ----- ----------- ----- -------
Upholstery net sales 182.5 183.3 -0.4%
Other sales 27.1 19.3 40.4%
----------- -----------
Net Sales 209.6 100% 202.6 100% 3.5%
Purchases (82.8) (77.8) 6.4%
Labor (27.0) (25.2) 7.1%
Third-party Manufacturers (8.4) (9.6) -12.5%
Manufacturing Costs (7.7) (7.6) 1.3%
Inventories, net (11.5) (9.6) 19.8%
----------- -----------
Cost of Sales (137.4) (129.8) 5.9%
----------- -----------
Gross Profit 72.2 34.4% 72.8 35.9% -0.8%
Selling Expenses (50.1) (40.4) 24.0%
General and Administrative
Expenses (11.7) (12.5) -6.4%
----------- -----------
Operating Income 10.4 5.0% 19.9 9.8% -47.7%
Interest Income, net (0.3) 0.7
Foreign Exchange, net (1.4) 0.3
Other Income, net (5.4) 2.9
----------- -----------
Earnings before taxes and
minority interest 3.3 23.8 -86.1%
Income taxes 0.5 (5.4) -109.3%
----------- -----------
Earnings before minority
interest 3.8 18.4 -79.3%
Minority Interest (0.2) 0.0
----------- -----------
Net Earnings 3.6 1.7% 18.4 9.1% -80.4%
=========== ===========
Earnings per Share 0.0658 0.3365 -80.4%
============ ============
Average Number of Shares
Outstandings(*) 54,681,628 54,681,628
(*) Net of shares repurchased 1 EUR = 1,936.27 ITL
KEY FIGURES IN U.S. DOLLARS (millions)
4th Quarter 4th Quarter
2003 2002
----------- -----------
Net Sales 249.4 202.7
Gross Profit 85.9 72.8
Operating Profit 12.4 19.9
Net Earnings 4.3 18.4
Earnings per Share in U.S. dollars 0.083 0.3365
Average exchange rate (U.S. dollar per Euro) 1.1900 1.0003
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in millions of EUR)
Dec., 31 Dec., 31 % Dec., 31 Dec., 31 %
-------- -------- ------ ---------- ---------- ------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ---------- ---------- ------
Americas 320.1 366.4 -12.6% 1,699,160 1,572,879 8.0%
% of total 47.5% 49.9% 55.5% 52.0%
Europe 313.5 326.5 -4.0% 1,181,566 1,278,296 -7.6%
% of total 46.5% 44.4% 38.6% 42.2%
Rest of world 40.4 41.8 -3.3% 178,109 176,483 0.9%
% of total 6.0% 5.7% 5.8% 5.8%
TOTAL 674.0 734.7 -8.3% 3,058,835 3,027,658 1.0%
----- -------- -------- ------ ---------- ---------- ------
BREAKDOWN BY COVERING
Sales Seat Units
(Expressed in millions of EUR)
Dec., 31 Dec., 31 % Dec., 31 Dec., 31 %
-------- -------- ------ ---------- ---------- ------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ---------- ---------- ------
Leather 550.0 623.7 -11.8% 2,310,121 2,433,509 -5.1%
% of total 81.6% 84.9% 75.5% 80.4%
Fabric 124.0 111.0 11.7% 748,714 594,149 26.0%
% of total 18.4% 15.1% 24.5% 19.6%
TOTAL 674.0 734.7 -8.3% 3,058,835 3,027,658 1.0%
----- -------- -------- ------ ---------- ---------- ------
BREAKDOWN BY BRAND
Sales Seat Units
(Expressed in millions of EUR)
Dec., 31 Dec., 31 % Dec., 31 Dec., 31 %
-------- -------- ------ ---------- ---------- ------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ---------- ---------- ------
Natuzzi 533.0 609.4 -12.5% 2,126,404 2,313,186 -8.1%
% of total 79.1% 82.9% 69.5% 76.4%
Italsofa 141.0 125.3 12.5% 932,431 714,472 30.5%
% of total 20.9% 17.1% 30.5% 23.6%
TOTAL 674.0 734.7 -8.3% 3,058,835 3,027,658 1.0%
----- -------- -------- ------ ---------- ---------- ------
GEOGRAPHIC BREAKDOWN
Sales Seat Units
(Expressed in millions of EUR)
4th 4th 4th 4th
Quarter Quarter % Quarter Quarter %
-------- ------- ---------------------------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ----- ------ ------
Americas 79.4 85.0 -6.6% 440,765 396,425 11.2%
% of total 43.5% 46.4% 52.6% 50.3%
Europe 91.7 89.1 2.9% 346,299 352,006 -1.6%
% of total 50.2% 48.6% 41.4% 44.6%
Rest of world 11.4 9.2 23.9% 50,304 40,357 24.6%
% of total 6.2% 5.0% 6.0% 5.1%
TOTAL 182.5 183.3 -0.4% 837,368 788,788 6.2%
------------------------- ------- ------ ----- -------- -------- -----
BREAKDOWN BY COVERING
Sales (Expressed in millions of EUR) Seat Units
4th 4th 4th 4th
Quarter Quarter % Quarter Quarter %
--------- ------ ----- ------ ------- ------
2003 2002 Change 2003 2002 Change
-------- ------- ------ ------ ------- -----
Leather 149.5 154.0 -2.9% 636,475 624,404 1.9%
% of total 81.9% 84.0% 76.0% 79.2%
Fabric 33.0 29.3 12.6% 200,893 164,384 22.2%
% of total 18.1% 16.0% 24.0% 20.8%
TOTAL 182.5 183.3 -0.4% 837,368 788,788 6.2%
------------------------- ------ ------- ------ -------- ------ ------
BREAKDOWN BY BRAND
4th 4th 4th 4th
Quarter Quarter % Quarter Quarter %
-------- ------- ---- ------- ------- ------
2003 2002 Change 2003 2002 Change
-------- ------- ----- ------ ------- ------
Natuzzi 142.7 149.9 -4.8% 575 585 -1.7%
% of total 78.2% 81.8% 68.6% 74.1%
Italsofa 39.8 33.4 19.2% 263 204 28.9%
% of total 21.8% 18.2% 31.4% 25.9%
TOTAL 182.5 183.3 -0.4% 838 789 6.2%
------------------------- ----- -------- ----- --------- ------ -----
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet
as of December 31, 2003 and December 31, 2002
(Expressed in millions of EUR)
2003 2002
ASSETS -------- --------
Current Assets:
Cash and cash equivalents 63.6 96.7
Marketable debt securities 0 0
Trade receivables, net 154.5 158.4
Other receivables 58.1 58.3
Inventories 97.5 84.1
Unrealized foreign exchange gain 6.3 2.0
Prepaid expenses and accrued income 2.1 1.3
Deferred income taxes 1.0 1.8
Total current assets 383.1 402.6
Non-Current Assets:
Net property, plant and equipment 254.2 228.9
Treasury shares 37.8 37.8
Other assets 17.1 5.1
Deferred income taxes 0.2 0.1
-------- -------
Total Assets 692.4 674.5
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 4.8 0.2
Current portion of long-term debt 1.3 1.4
Accounts payable-trade 80.9 87.5
Accounts payable-shareholders for dividends 0.0 0.0
Accounts payable-other 17.8 15.7
Allowance for unrealized foreign exchange losses 0.0 0.0
Income taxes 4.3 9.2
Salaries, wages and related liabilities 16.1 14.7
Total current liabilities 125.2 128.7
Long-Term Liabilities: ------ -------
Employees' termination indemnity 27.6 25.6
Long-term debt 4.2 3.6
Deferred income taxes 0.4 0.4
Deferred income for capital grants 13.4 14.2
Other liabilities 5.7 5.7
Minority Interest 0.9 0.5
Shareholders' Equity:
Share capital 57.5 57.5
Reserves 80.2 73.1
Additional paid-in capital 8.3 8.3
Retained earnings 369.0 356.9
Total shareholders' equity 515.0 495.8
Total Liabilities and Shareholders' Equity 692.4 674.5
======== ========
NATUZZI S.p.A. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
as of December 31, 2003 and 2002
(Expressed in millions of EUR)
December, December,
31 31
2003 2002
--------- ---------
Cash flows from operating activities:
Net earnings 37.3 91.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 24.1 16.8
Employees' termination indemnity 2.0 3.3
Deferred income taxes 0.8 0.4
Minority interest 0.2 (0.1)
(Gain) loss on disposal of assets 4.8 0.0
Change in provision for unrealized
foreign exchange (losses) / gain (4.3) (2.9)
Change in assets and liabilities:
Receivables, net 4.8 (20.2)
Inventories (7.6) 3.8
Prepaid expenses and accrued income (0.9) (0.3)
Other assets 3.3 (3.0)
Accounts payable (9.2) 5.3
Income taxes (4.9) 3.6
Salaries, wages and related liabilities 1.4 1.1
Other liabilities (12.7) 1.9
--------- ---------
Total adjustments 1.8 9.7
--------- ---------
Net cash provided by operating activities 39.1 101.1
--------- ---------
Cash flows from investing activities:
Property, plant and equipment:
Additions (49.9) (71.6)
Disposals 0.2 0.6
Government grants received 3.1 10.0
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 (6.5) 0.0.
Purchase of minority interest (0.0) 0.0.
--------- ---------
Net cash used in investing activities (53.1) (61.0)
--------- ---------
Cash flows from financing activities:
Long term debt:
Proceeds 1.9 2.1
Repayments (1.7) (1.4
Short-term borrowings 2.7 (134.3)
Exercise of stock options 0.0 0.0
Treasury shares 0.0 0.0
Dividends paid (18.0) (15.7)
Dividends paid to minority shareholders 0.0 0.0
--------- ---------
Net cash used in financing activities (15.1) (149.3)
--------- ---------
Effect of translation adjustments
on cash (4.0) (2.4)
--------- ---------
Increase (decrease) in cash and cash
equivalents (33.1) (111.6)
Cash and cash equivalents,
beginning of the year 96.7 208.3
--------- ---------
Cash and cash equivalents,
end of the period 63.6 96.7
========= =========
Natuzzi S.p.A.
FOURTH-QUARTER AND FULL YEAR 2003
FINANCIAL RESULTS TELECONFERENCE
Senior management will review fourth-quarter 2003 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
Friday, March 26, 2004
10:00 a.m. (New York time)
3:00 p.m. (London time)
4:00 p.m. (Italian time)
The telephone numbers for the teleconference are:
1-888-428-4474 calling from US
+1-651-291-0561 calling from outside the US
Replay of this event will be available on our web-site
www.natuzzi.com starting from 3:00 p.m. Italian time on
March 29, 2004.
CONTACT: Investor Relations Dept.
+39-080-8820-412
Fax: +39-080-8820-241
investor_relations@natuzzi.com
or:
Corporate Press Office
+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: March 2004 By: /s/ GIUSEPPE DESANTIS
----------------------------------
Giuseppe Desantis