FBI posts 2Q loss
By Larry Thomas -- Furniture Today, August 11, 2008
ST. LOUIS — Furniture Brands International reported a second-quarter net loss of $23.9 million as sales fell 13.4%.
The results, which include several one-time charges, reflected weakness across all its brands and the entire home furnishings industry, the manufacturer and importer said. FBI’s key brands include Broyhill, Lane, Thomasville, Drexel Heritage, Henredon and Maitland-Smith.
Sales for the quarter ended June 30 totaled $449.9 million, down from $519.5 million in last year’s second quarter.
The most recent quarter’s loss, which equals 49 cents per share, compares with earnings of $5.8 million or 12 cents per share in the same period last year.
Ralph Scozzafava, chairman and CEO, said that despite the double-digit sales decline, gross margin improved for the second straight quarter due to inventory controls and other cost-cutting measures.
“In addition to the broad initiatives of domestic manufacturing consolidation and international expansion that we have previously outlined, we are also focused on the day-to-day aspects of our business that affect profitability,” he said.
The quarterly results include about $30 million in pretax charges and factory downtime costs, as well as $1.3 million in fees from the recent proxy contest that saw major shareholder Sun Capital Partners gain three seats on FBI’s board of directors. Among the charges were an additional $11.2 million to cover lease obligations of stores the company previously announced it was closing, and $11.1 million in increased reserves for bad debts.
For the first six months of the year, sales fell 13.9% to $927.1 million.
First-half earnings totaled $9.7 million or 20 cents per share. That compares with earnings of $8.7 million or 18 cents per share in the first half of 2007. This year’s first half included $29.9 million in net earnings from discontinued operations, mainly from the Hickory Business Furniture contract furniture division, which Furniture Brands sold in the first quarter.
| Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill, Drexel Heritage, Henredon, Lane, Maitland-Smith and Thomasville | |||
| (a) Includes income tax benefit of $9.4 million in the 2008 quarter and $6 million in the 2008 six months and income tax expense of $3 million in the 2007 quarter and $3.9 million in the 2007 six months. Also includes earnings from discontinued operations of $52,000 in the 2008 quarter, $1.4 million in the 2007 quarter, $29.9 million in the 2008 six months and $3 million in the 2007 six months. | |||
| Quarter ended 6/30 | 2008 | 2007 | Change |
| Sales | $449,870,000 | $519,471,000 | (13.4%) |
| Operating income | (31,629,000) | 7,701,000 | — |
| Net income (a) | (23,944,000) | 5,808,000 | — |
| Earnings per share | (0.49) | 0.12 | — |
| 6 months ended 6/30 | 2008 | 2007 | Change |
| Sales | $927,070,000 | $1,076,430,000 | (13.9%) |
| Operating income | (22,591,000) | 14,546,000 | — |
| Net income (a) | 9,672,000 | 8,685,000 | 11.4% |
| Earnings per share | 0.20 | 0.18 | 11.1% |
