Natuzzi S.p.A. Q3 and Nine Months 2016 Consolidated Results

The Board of Directors of Natuzzi S.p.A. (NYSE:NTZ) has approved the Q3 2016 consolidated results.
Following the Board meeting, the Chairman and CEO Pasquale Natuzzi stated:
"We have operated the third quarter of 2016 under our new strategy and organization and the results, although not visible in the net numbers yet, continue to improve. Branded product is maintaining value in the market with a reduction in revenue as a response to competitor discounting. We remain focused on protecting the value of our brand, the most recognized high-end furniture brand in the world. Softaly suffered as a result of the difficulties of one of our major customers. We are working with them on a new strategy which we believe will benefit us both. Early indications of order flow from our recent North American Furniture Market in High Point are extremely favorable, demonstrating that our customers, both branded and private label, remain excited about our product and increasingly about our brand.”

"Leveraging on the existing distribution network and brand awareness, as well as newly acquired direct operated stores, the Company saw some positive performance in Europe and Asia. The largest immediate opportunity is in North America where efforts to expand continue. To this end, the Company has recently completed agreements to acquire stores in Florida and Italy as part of the continued expansion of Directly Operated Stores.”

Mr. Natuzzi added - "Early results of the evolving application of our new strategy remain encouraging and we continue to realign the organization along these new dimensions. In addition to the dedicated expansion in doors and direct merchandising, we have begun efforts to rationalize headquarter expense and are already seeing the benefit. We expect these efforts to result in a return to profitability in the near future. As of now we see positive results in both the average value of retail transactions and price per seat in Natuzzi Italia.” - he continued - "Both of these improvements are a direct result of our branding strategy and investment.”

Chief Financial Officer Vittorio Notarpietro added:
"A transition of this magnitude requires substantial effort and time. We have successfully reallocated all appropriate resources to the two operating divisions. We have made significant progress in rationalizing the general and administrative expenses of the corporate division. As a result of these efforts combined with early success in higher value branded sales, cash flow from operations has increased to Euros 15.3 million and our net financial position has improved greatly, almost 10% from the end of last year (Euro 15.9 million versus Euros 14.5 million).
We recently acquired five existing franchised stores in Italy and seven stores in Florida. The main reason for the strategy to buy back stores is to improve control toward our Brand distribution, taking, at the same time, advantage of the entire value chain. But even from a pure cash point of view, the direct retailing has an advantage compared with the traditional whole-sale business which is more cash intensive.”
"We are now tracking operations on both retail and manufacturing basis and evolving management systems to allow us to optimize our business. I am happy to advise that for stores we operated at the beginning of 2016, revenues have increased 2.8% through mid-November. Further, we have seen an increase of 6.3% in average DOS transaction and an increase of 11% in the related price per seat.”

About Natuzzi S.p.A.

Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs, manufactures and sells a broad collection of couches, armchairs, home furniture and home accessories. With consolidated revenues of €488.5 million in 2015, Natuzzi is Italy’s largest furniture house and the player with the greatest global reach in its sector, with eight manufacturing plants, twelve commercial offices and more than 1,100 points of sale worldwide. Ethics and social responsibility, innovation, industrial know-how and integrated management of its value chain represent the points of strength that have made the Natuzzi Group a market leader and established Natuzzi as the most recognized furniture brand in the world among consumers of luxury goods. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001 certified.

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