Bush Industries Inc. said today that its third-quarter profits shot up by 26 percent as the Jamestown-based maker of ready-to-assembly furniture boosted its earnings for the fifth straight quarter.
Bush said its earnings rose to $3.98 million, or 28 cents per share, from $3.16 million, or 24 cents per share, a year earlier.
While Bush's earnings grew by at least 26 percent for the fourth straight quarter, the company's earnings growth slowed considerably from the increases of at least 48 percent per quarter that the firm had enjoyed during the three previous quarters.
Donald Hauck, Bush's chief financial officer, said the company's profit margins, which are sharply higher than a year ago, declined slightly from their levels earlier in the year because the firm's production volumes were not as high as they had been during the first and second quarters, when Bush was building up inventory.
The company's profits fell short of the expectations of Wall Street analysts, who had predicted that Bush's profits would rise to 29 cents per share, according to a survey of four analysts by IBES International Inc.
Hauck said the increase in profits was bolstered by more efficient operations at its factories, which are running at higher capacity than they were a year ago. Bush's sales rose by 7 percent to a record $63.6 million from $59.5 million.
"Business continued to grow in the home and commercial office area, as well as in the big-screen home theater area," Hauck said.
Bush managed to boost its sales and earnings despite a bankruptcy filing late last month by Best Products Inc., a catalog showroom retailer that is one of its bigger customers. As a result, Bush increased its allowance for bad debts by about 2 cents per share, Hauck said.
The company also said it has acquired the stock it does not already own in The ColorWorks Inc. for about $2.7 million in Bush's Class A common stock. Bush had acquired a majority interest in the North Carolina finishing and decorating firm earlier this year.
"We wanted to take a look at it as a majority owner," Hauck said. "We now have complete control and we feel we can integrate it into our operations at a quicker pace."
ColorWorks' gives Bush access to a film-processing technology that allows products to be decorated with unusual shapes and complex designs.
For the first nine months of the year, Bush's profits nearly doubled to $13.1 million, or 93 cents per share, from $7.6 million, or 57 cents per share, a year earlier. The company's sales rose by 19 percent to $183.9 million from $154.7 million the year before.