MARCH 9 I STEINWAY I FINANCIAL
Down 21 Percent for ’09
Steinway recently reported its results for the fourth quarter of 2009, which ended Dec. 31. The company’s sales for the year were down 21 percent, and gross margins decreased from 29.8 to 27.7 percent. Net income was down 35 percent at $5 million.
Steinway CEO Dana Messina said revenue for the year was higher than first forecasted due to better than expected fourth quarter piano sales. Piano sales earned $55 million, down 8 percent over the previous fourth quarter. Grand pianos had the biggest unit decline of 23 percent worldwide, while mid-priced pianos had a unit decline of 3 percent worldwide. Piano sales for the year were down 21 percent.
Messina emphasized the company’s focus on reduced cost structure and efforts to lower net debt, which is now less than $100 million.
“Our program to reduce debt and improve our financial flexibility left us with a strong structure,” Messina said.
“We made many sacrifices in order to confront the economic downturn, the hardest of which was letting go many loyal employees.”
A Better Year for Band Ahead
Band sales for the fourth quarter were down 22 percent, and the gross margin increased from 19.1 to 22.4 percent. Gross margins for the year also increased slightly from 21.6 to 22.4 percent.
“We expect to see a meaningful pickup in our band business and its profitability by the middle of 2010,” Messina said. “We have a good mix of attractively priced new products, and our plants are becoming more efficient. Our customers appear to have more confidence heading into the year, and we expect that to translate into increased orders.” MI