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Samson Holdings Announces 2020 Annual Results

General News

Samson Holding Ltd. (“Samson” or the “Company”) first entered the high-end luxury home furnishing market in 2017 with the acquisition of Baker Interiors Group, LTD. (formerly known as Kohler Interiors Group, LTD.) . The subsequent purchase of Southern Furniture in 2019 further strengthened Samson’s already impressive portfolio, enabling the expansion of customized upholstery business through the Universal Furniture brand. These strategic moves have fuelled the steady growth of Samson’s mid to high-end brands in the United States. In addition, the introduction of a leading edge data-driven management system has resulted in more optimal production processes and cost allocation.

The worldwide COVID-19 pandemic forced a suspension of global economic activities, resulting in a challenging 2020 for both Samson and the entire furniture industry. While the industry continues to face supply chain disruptions due to the extended lockdown, Samson has been responding to adversities through flexible strategic adjustments. Although sales reduced significantly in the first half of 2020, the diversification of sales channels and the recovery of the U.S. housing market have put Samson back on track. On the demand side, the Federal Reserve (“FED”) lowered the interest rate to zero in March 2020 in support of household and business cash flow. The lower mortgage rates have led to a more encouraging and stable housing market, which in turn has powered a healthy upward trend of order volume for the F&HF industry. On the supply side, in order to meet the rising demand and mitigate the risk of supply disruption, Samson is partnering with several shipping service providers to ensure container availability while also expanding workforce recruitment to handle the additional volume. Samson expects to construct another upholstery factory in Vietnam in the second half of 2021 and add three production lines in the U.S.. We expect these timely measures will alleviate any shipment constraints in the second half of 2021.

The COVID-19 pandemic has also accelerated the growth of e-commerce. While High Point Market is postponed in 2021, the Group switched to a more active selling strategy and captured additional sales opportunities through dedicated virtual tours and e-selling events. The current order pipeline indicates that customers are receptive to the new sales model, allowing the Group to reduce reliance on offline sales and reach a wider customer base year around. Samson has also entered into partnership with, taking advantage of its home delivery, product buyout, and cross-season sales offerings. Looking ahead to post-pandemic era, Samson will continue to develop its non-traditional capabilities and to grow its online presence.

Samson is no longer impacted by the tariff due to political tension and trade war between China and the U.S., mainly thanks to its swift measures of sourcing its U.S.-bound products from partners in Vietnam as well as its own facilities in Vietnam and Bangladesh. The acquisition of the Vietnamese facility, Timber Industries Co., Ltd., has been fully completed in 2020 with a dedicated production line for Universal Furniture, two lines for OEM customers, and one new upholstery production line with production capacity of 700 containers per month. The investment in Bangladesh has also blossomed, and the expanded production of dining tables and chairs in Bangladesh remains on track. Since 2020, Samson has successfully transferred from a Chinacentric manufacturing process to a globally diverse footprint and is better equipped to manage
future uncertainties in the global market.

Overall, with rising demand and stabilizing container availability, the Group expects sustainable recovery of postponed orders and shipments with improved financials in 2021.

Financial Review

Net sales for the year was US$397.6 million compared to US$457.2 million in 2019, a decrease of US$59.6 million or 13.0%. The decrease in net sales was mainly attributable to the global outbreak of coronavirus disease 2019 (the “COVID-19”) and the shortage of international containers, resulted in postponement of lots of confirmed orders and shipments by end customers.

Gross profit for the year was US$95.5 million, a decrease of US$38.5 million from US$134.0 million in 2019. Gross profit margin decreased to 24.0% from 29.3% in 2019. The decrease in gross profit margin was mainly attributable to the temporary suspension of operation and regional lockdowns of the Group’s principal markets and manufacturing operation in various cities amid outbreak of the COVID-19 since the beginning of 2020, while certain operating costs of the Group remain stable.

Compared with US$139.3 million in 2019, total operating expenses were recorded at US$121.5 million in 2020. The decrease in operating expenses was mainly attributable to effective cost control measures and reduced operating expenses from the shutdown of the U.K. subsidiary in 2019 but partially offset by the newly acquired company.

Compared with a loss of US$48.5 million in 2019, the Group recorded a loss of US$15.7 million in 2020, decrease in loss for the year mainly due to an one time non-cash impairment loss of US$41.3 million from a PRC subsidiary caused by the trade tension between China and the U.S. was recorded in 2019 and such impairment loss was not recorded for the year. Excluding the one time non-cash impairment loss, the loss for the year was attributable to the decrease of sales due to the global spread of the COVID-19, while relatively fixed costs attached to the operation of the Group remain.

Liquidity, Financial Resources and Capital Structure

As at 31 December 2020, the Group’s cash and cash equivalents decreased by US$36.7 million to US$26.0 million from US$62.7 million as at 31 December 2019. Interest-bearing bank borrowings decreased from US$187.1 million as at 31 December 2019 to US$155.0 million as at 31 December 2020. The corresponding gearing ratio (total bank borrowings/shareholders’ equity) decreased from 58.7% as at 31 December 2019 to 52.5% as at 31 December 2020. The Group possesses sufficient cash and available banking facilities to meet working capital requirements and to enable further acquisitions with confidence.

Cash and cash equivalents held by the Group are mainly denominated in U.S. dollars, Renminbi, U.K. Pound Sterling, Vietnamese Dong, New Taiwan dollars, Indonesian Rupiah and Hong Kong dollars. As at 31 December 2020, interest-bearing bank borrowings of US$109.6 million (31 December 2019: US$154.6 million) bore interest at either the floating rates or fixed rate ranging from 0.7% to 1.9% respectively and long term bank borrowing of US$45.4 million bore interest at a floating rate (31 December 2019: US$32.5 million).

Sources of liquidity include cash and cash equivalents, short term bank deposits, cash from operations and general banking facilities granted to the Samson, allowing the Group to maintain strong and prudent liquidity for day-to-day operations and business development.

With an international operation, Samson is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to Renminbi and Vietnamese Dong. Although the majority of the total revenue is denominated in U.S. dollars, a substantial portion of cost of sales is paid in Renminbi and part of the sales is denominated in U.K. Pound Sterling. The exchange rates of Vietnamese Dong and Renminbi have fluctuated substantially in recent years and may continue to fluctuate in the foreseeable future.

The Group’s current assets have decreased by 13.9% to US$357.2 million from US$415.0 million as at 31 December 2019; the Group’s current liabilities have decreased by 16.7% to US$206.0 million from US$247.5 million as at 31 December 2019. The current ratio (current assets/current liabilities) is 1.7 times (31 December 2019: 1.7 times).

Pledge of Assets

As at 31 December 2020, certain of the Group’s property, plant and equipments, investment properties, other intangible assets, inventories, trade and other receivables and bank deposits with an aggregate carrying amount of US$185.0 million (31 December 2019: US$162.7 million) have been pledged to banks to secure the general banking facilities granted to the Group.

Capital Expenditure

Capital expenditures for the year ended 31 December 2020 amounted to US$7.7 million compared to US$34.1 million in 2019. Capital expenditure was mainly incurred for the purpose of upgrading and renovation of plant and machinery in the U.S. and the expansion of new production lines in the U.S. and Vietnam.

Material Acquisitions and Disposals of the Group

Acquisition of a Subsidiary

On 16 July 2019, the Group acquired a 70% interest in Timber from an independent third party at a cash consideration of US$32,550,000. Timber is engaged in the manufacture and sales of furniture and home accessories. The acquisition was made as the transfer of production line to South East Asia. The purchase consideration for the acquisition was in the form of cash, with US$9,765,000 paid on 16 July 2019 and the remaining US$6,510,000 and US$16,275,000 paid on 2 August 2019 and 29 October 2019, respectively.

On 3 August 2020, the Group entered into a share transfer agreement with an independent third party to acquire 30% of the equity interest of Timber, at a total cash consideration of US$13,950,000. As a result of the acquisition, the Group owns 100% of the equity interest of Timber. The acquisition was completed on 3 August 2020. The carrying amount of the non-controlling interest in Timber on the date of acquisition was US$7,163,000. The Group recognised a decrease in non-controlling interest of US$7,163,000 and a decrease in equity attributable to owners of the Company of US$6,787,000. Details of this transaction are disclosed in the Company’s announcement dated 3 August 2020.

Disposal of an Investment in the Sub-Fund

On 18 December 2019, the Group disposed of part of its investment in the Sub-Fund set up by UBP made under the mandate agreement. The principal amount of such investment being disposed was US$69,500,000 and the consideration for the Disposal was US$70,036,540. The Company recognized a gain of US$536,540 from the Disposal. Details of this transaction are disclosed in the Company’s announcement dated 16 September 2020.


The strong recovery of the U.S. housing market remains a source of optimism for the furniture industry in general. The Fed’s zero interest rate policy is expected to continue, which allows housing starts and existing home sales, along with the F&HF demand to recover from the impact of the COVID-19 pandemic. Social distancing has also stimulated higher furniture demand due to increased time at home. Looking forward to 2021, the order pipeline has filled into the third quarter of the year and the market demand continues to be strong.

However, global shortage of international containers has challenged the entire industry on its ability to satisfy demand. Samson adopted timely measures through active cooperation with shipping companies to ensure container availability as well as the introduction of cutting edge datadriven management systems to optimize overall capacity. In addition, the Group has refocused its marketing strategy by shifting to more active, online-centric approaches in order to reach a wider customer base. This new strategy breaks the restrictions of traditional offline sales and reduces fixed cost effectively. With increased production capacity in Vietnam and a diversification of route to market, Samson is well positioned to maintain its competitive edge and continues to increase its market share in the U.S., making 2021 a very promising year for us.


The Board does not recommend the payment of a final dividend for the year ended 31 December 2020.

For the full fourth quarter results, click here.

Source: Samson Holding Ltd.