Shermag Cuts Its Loss

Article Excerpt

SHERMAG INC. $2.32 (Toronto symbol SMG; SI Rating: Speculative) (819-566-1515;; Shares outstanding: 13.3 million; Market cap: $31.0 million) makes high-quality residential furniture at factories in Quebec and New Brunswick. Shermag reported 11.5% lower sales in the three months ended September 29, 2006, to $42.5 million from $48.1 million. However, the company was able to cut its loss to $1.1 million or $0.09 a share, compared to a loss of $2.1 million or $0.16 a share a year earlier. Shermag has been able to cut costs. It’s also on track to meet its goal of shifting 35% of its manufacturing to Asia by the end of this year. Ultimately, the company plans to increase that to 50%. Competition from China has been a significant threat for Shermag. The low U.S. dollar continues to hurt results, as it makes around 75% of its sales in the U.S. However, the company hopes its restructuring measures, combined with its reputation for high quality furniture and designs,…

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