COPPELL, Texas–Ceiling fan and lighting specialist Craftmade International hopes that diversification into the outdoor furniture and accessories business will help counteract the negative impact of the housing crisis.
Craftmade’s recently announced acquisition of Woodard LLC from CC Industries for $19.3 million plus stock gives the lighting and fan company entree into the burgeoning casual outdoor furniture business, which complements its outdoor lighting mix and adds an upscale clientele through new channels of distribution.
“We continue to look for ways to diversify our strong product offering and be less reliant on new home construction while leveraging our core marketing and distribution competencies,” said James R. Ridings, Craftmade’s chairman and chief executive officer, in a statement.
“The Woodard acquisition will be a strategic addition to our fast-growing outdoor product lines, and will allow us entry into the growing hospitality market, expand our retail customer base and add a new independent distribution channel,” he said.
Craftmade, with annual sales of about $103.3 million, had been seeking “strategic alternatives” for about six months, and has seen its sales and profits decline along with the downturn in housing and the soft retail climate. Craftmade’s net sales for the fiscal year ended June 30 decreased $14.7 million, or 12.5 percent, to $103.3 million, while the company’s net income was $5.9 million, down from $7.1 million.
Officials from both companies declined to provide further details, including Woodard’s annual sales and financial condition, citing the fact that Craftmade is a publicly traded company.
Woodard, founded in 1865, manufactures wrought-iron, aluminum and all-season wicker outdoor furniture marketed under the Woodard, Woodard Landgrave and Woodard Lyon Shaw brands. As a part of this transaction, the Crown Family, which has owned Woodard for more than 20 years, will become a major shareholder of Craftmade.
Woodard has a 306,000-square-foot manufacturing facility in Owosso, Mich., but also sources goods from China and Mexico. Craftmade may be able to leverage that production, it said.
“Woodard’s manufacturing plants will provide us with more manufacturing flexibility without losing focus on our core capabilities,” Ridings said. “We will be able to provide new and existing customers with competitive pricing, continued exceptional product designs and high-quality customer service. As with any of our potential acquisitions, the Woodard acquisition is expected to be immediately accretive to our earnings,” Ridings said.
Management at Woodard is expected to remain in place, under the leadership of Dean Engelage, Woodard president, who said: “I am confident this transaction will strengthen Woodard on several levels. [Woodard’s] management team and employees are excited about this opportunity and we are looking forward to a positive and exciting future,” Engelage said.
Craftmade is in several different businesses and channels. It sells ceiling fans and lighting through lighting showrooms through its Craftmade segment; light bulbs, door chimes and other accessories through its Teiber Lighting unit; lighting for the home center and mass market through its Trade Source International division; as well as a window-treatment program for home centers and mass customers. Craftmade also has a joint venture with Design Trends, which sells mix-and-match lighting to home-center and mass customers.