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MAY 3 | STEINWAY | FINANCE Steinway Musical Instruments announced a $10.8-million increase in piano sales for the first quarter of this year, a 26-percent bump compared to the same period in 2006. This increase mitigated a sales decline in band instruments of $12.6 million, of which an estimated $7.2 million was caused by a labor strike. Despite the strike, overall revenues decreased only 2 percent. Gross margins improved from 27.3–29.2 percent, despite lost profit and unabsorbed overhead from the strike of approximately $4.6 million. Operating expenses increased $2.4 million primarily as a result of sales and marketing expenses related to the launch of new piano models and $0.5 million in reserves associated with recent acquisition activities. Net interest expense decreased 22 percent compared to the first quarter of 2006 as a result of debt reduction and the company’s successful debt refinancing last year. “We are excited to report another good quarter for our piano business,” said CEO Dana Messina. “We posted double-digit revenue growth both domestically and overseas. Steinway sales were strong worldwide and our re- launched Essex line continues to exceed our expectations. Institutional sales continue to be a healthy part of our business as we recently shipped 141 Steinway pianos to the Crane School of Music at SUNY Potsdam. We also introduced a limited-edition piano in the first quarter of this year which has generated a great deal of excitement throughout our dealer network.” |
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