Sep 22, 2005. /Lesprom Network/. The Rowe Companies, a leading furniture manufacturer and home furnishings retailer, reported operating results for its third fiscal quarter ended August 28, 2005. Net shipments for the quarter increased 4.4% to $79.5 million, compared to $76.1 million for the comparable prior year period. Gross profit declined to 32.6% of net shipments, compared to 34.9% of net shipments for the third quarter of 2004, as manufacturing productivity continued below historical levels while the company experienced price increases in a number of raw materials. Selling and administrative expenses for the quarter were $27.9 million, compared to $25.4 million in the prior year quarter, principally due to higher retail selling expenses associated with increased revenue and higher store occupancy expense from new store growth. Interest and other income, net, increased from net expense of $526,000 in 2004 to $608,000 in 2005, principally due to lower rental income in 2005. Net loss from continuing operations was $(1.6) million or $(0.12) per share, compared to net earnings in the prior year period of $.4 million or $0.03 per share. During the quarter, the company completed the sales of its Christiansburg, VA and Jessup, MD, investment real estate properties, which were unassociated with the operations of the company, for an after-tax gain of $1.7 million, or $0.13 per share, thereby completing the company's planned divestiture of unrelated investment property. Net earnings for the third quarter were $123,000 or $0.01 per share, compared to earnings of $490,000 or $0.04 per share in the same period of the prior year. The New Orleans store operated by the company's Storehouse division was seriously damaged by hurricane Katrina. For fiscal year 2004, net shipments for this store were approximately $1.9 million, and projected shipments for this fiscal year were approximately $2.2 million. The company believes that insurance will cover the loss of inventory and store fixtures, and has estimated the insurance proceeds from its write-off of assets. This resulted in a gain of $101,000 or $0.01 per share. "We were pleased that Storehouse achieved a 3.6% same store sales increase, and a 14.4% overall increase during the quarter in an environment complicated by aggressive automobile discounting and rising gasoline prices", stated Gerald M. Birnbach, chairman and president; "and our Rowe Furniture division did achieve some improvement during the quarter but we remain below our targeted levels. We continue to focus intensely on delivering a higher level of productivity and improving our gross profit." The Rowe Companies operates two subsidiaries in the home furnishings industry: Rowe Furniture, Inc., a major manufacturer of quality upholstered furniture serving the middle and upper middle market throughout the U.S.; and Storehouse, Inc., a multi-channel, lifestyle home furnishings business including 66 retail home furnishings stores. Storehouse makes good design accessible by selling an edited assortment of casual, contemporary home furnishings through its stores located in the Southeast, Southwest and Mid-Atlantic markets, its catalog and over the internet.