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0000950152-09-004874.txt : 20090507 0000950152-09-004874.hdr.sgml : 20090507 20090507083032 ACCESSION NUMBER: 0000950152-09-004874 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090506 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090507 DATE AS OF CHANGE: 20090507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FURNITURE BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000050957 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 430337683 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00091 FILM NUMBER: 09803584 BUSINESS ADDRESS: STREET 1: 1 N BRENTWOOD BLVD CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3148631100 MAIL ADDRESS: STREET 1: 1 N BRENTWOOD BLVD CITY: ST LOUIS STATE: MO ZIP: 63105 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL SHOE CO DATE OF NAME CHANGE: 19690313 8-K 1 c51089e8vk.htm FORM 8-K e8vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): May 6, 2009

FURNITURE BRANDS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)		001-00091 (Commission File Number)		43-0337683 (I.R.S. Employer Identification No.)


1 North Brentwood Blvd., St. Louis, Missouri (Address of principal executive offices)		63105 (Zip Code)

(314) 863-1100
(Registrant’s telephone number, including area code)

None
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 6, 2009, Furniture Brands International, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2009. The full text of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Nor shall such information or exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.


Exhibit No.		Description

99.1		Press release of Furniture Brands International, Inc. dated May 6, 2009, reporting results for the quarter ended March 31, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 6, 2009


Furniture Brands International, Inc. (Registrant)
By:	/s/ Steven G. Rolls
	Name:	Steven G. Rolls
	Title:	Chief Financial Officer

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press release of Furniture Brands International, Inc. dated May 6, 2009, reporting results for the quarter ended March 31, 2009.

EX-99.1 2 c51089exv99w1.htm EX-99.1 exv99w1

Exhibit 99.1

INFORMATION

FOR IMMEDIATE RELEASE

Furniture Brands International, Inc.
1 North Brentwood Blvd.
St. Louis, Missouri 63105

For Further Information Call
John Hastings
314-863-1100

FURNITURE BRANDS INTERNATIONAL REPORTS
FIRST QUARTER 2009 FINANCIAL RESULTS

•		Sales from continuing operations totaled $357 million, down 25% from prior year due to continued weak consumer market conditions.

•		Reported net loss from continuing operations of $4.2 million

•		Net debt of $97 million at March 31, 2009 and approximately $68 million at May 6, 2009, which is the lowest net debt level in more than 20 years

St. Louis, Missouri, May 6, 2009 — Furniture Brands International (NYSE: FBN) announced today its financial results for the first quarter ended March 31, 2009.

Net sales from continuing operations for the 2009 first quarter were $356.9 million, compared with $477.2 million in the first quarter of 2008. Results from continuing operations were a loss of $0.09 per diluted share in the 2009 quarter compared to net income of $0.08 per diluted share for the first quarter of 2008. A table detailing selected items in the company’s reported first quarter 2009 and 2008 financial results is attached to this press release.

Ralph P. Scozzafava, Chairman of the Board and Chief Executive Officer, commented: “The commercial interventions that are the building blocks of our strategic plan have helped Furniture Brands moderate the effects of the severe downturn in consumer spending. Furniture Brands is leveraging our brand portfolio and diverse channel strategy by gaining new placements in our traditional retail customers as well as in adjacent markets such as international and contract. Since early 2008 we have been exercising increased discipline in our selling processes, in cost controls, and in managing our capital base. The results of that discipline are evident as we are continuing to reduce inventories, generate cash flow and manage one of the strongest balance sheets in the industry.”

Gross margin for the 2009 quarter was 22.5% compared to 23.3% in the first quarter of 2008. Selling, general, and administrative costs for the 2009 quarter totaled $83.2 million, which has improved from the $102.0 million of selling, general, and administrative costs in the 2008 first quarter. The decline in operating profit from $9.0 million in the first quarter of 2008 to an operating loss of $2.9 million in the first quarter of 2009 resulted primarily from the deleveraging effect of the 25% reduction in net sales.

“Our more streamlined cost structure reflects the aggressive actions taken in 2008 to reduce manufacturing overhead and scale down administrative expenses with our new shared services organization. These activities will enable the company to be even more efficient in the future as we continue to make improvements and maintain a strong cash position,” Mr. Scozzafava said.

At March 31, 2009 the company reported cash and cash equivalents of $48 million and debt of $145 million resulting in net debt of $97 million. During April, the company received income tax refunds of approximately $27 million, and at May 6, 2009, the company held cash and cash equivalents of approximately $75 million and debt of $143 million, resulting in a net debt position of approximately $68 million. The company expects to generate positive cash flow for the year, exclusive of changes in debt balances and without the impact of tax refunds.

Mr. Scozzafava concluded, “Furniture Brands is now better positioned to deliver outstanding value to our retail partners in this current economic environment. For example, most of the new products introduced by Lane and Broyhill at the recent High Point Market had been tested with consumers to help ensure better consumer acceptance and sales performance at retail. We are also continuing to make significant marketing investments that will help drive traffic to our dealers and educate consumers about the advantages of our brands. These programs include:

•		New, more powerful websites that provide lifestyle-driven product groupings and utilize state-of-the-art dealer locator functionality and room planning software to provide a better on-line shopping experience,

•		The launch of The Thomasville Promise, the furniture industry’s first program to help protect consumers against the effects of an unexpected job loss. This program will support our stores and enable us to give our retail customers another good reason to decorate their homes with beautifully designed and well-crafted Thomasville furniture, and

•		Broyhill’s new product warranty program is among the best in the industry and illustrates the commitment to quality of the Broyhill brand and builds consumer confidence at retail.

“We believe that these new programs will deliver the same benefits to our dealers as the Lane Family Home Entertainment Tour, which was recently named the nation’s #1 mobile marketing campaign by Event Marketer magazine. The Lane tour has generated strong consumer traffic at every one of its stops and dealer support for this innovative program has been tremendous. All of these programs illustrate Furniture Brands’ commitment to being the preferred partner of our dealers and the consumer’s preferred family of brands.”

Upcoming Investor Event
A conference call will be held to discuss first quarter results at 7:30 a.m. (Central Time) on May 7, 2009. The call can be accessed in Upcoming Investor Events on the company’s website at furniturebrands.com under “Investor Info’’. Access to the call and the release will be archived for one year.

About Furniture Brands

Furniture Brands International (NYSE: FBN) is a global operating company that is one of the nation’s leading designers, manufacturers, and retailers of home furnishings. It markets through a wide range of retail channels, from mass merchant stores to single-brand and independent dealers to specialized interior designers. Furniture Brands serves its customers through some of the best known and most respected brands in the furniture industry, including Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Pearson, Hickory Chair, Laneventure, and Maitland-Smith.

Non-GAAP Reconciliation

We have reconciled the non-GAAP measures included in our earnings press release in accordance with Regulation G.

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this document and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, express or implied, of our anticipated growth, operating results, future earnings per share, plans and objectives, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are often identified by the words ``will,’’ ``believe,’’ ``positioned,’’ ``estimate,’’ ``project,’’ ``target,’’ “continue,’’ ``intend,’’ ``expect,’’ ``future,’’ ``anticipates,’’ and similar expressions that are not statements of historical fact. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ``Risk Factors’’ in our Annual Report on Form 10-K for the year ended December 31, 2008, and in our other public filings with the Securities and Exchange Commission. Such factors include, but are not limited to: risks associated with the execution of our strategic plan; changes in economic conditions; loss of market share due to competition; failure to forecast demand or anticipate or respond to changes in consumer tastes and fashion trends; failure to achieve projected mix of product sales; business failures of large customers; distribution and cost savings programs; manufacturing realignments; increased reliance on offshore (import) sourcing of various products; fluctuations in the cost, availability and quality of raw materials; product liability uncertainty; environmental regulations; future acquisitions; impairment of goodwill and other intangible assets; anti-takeover provisions which could result in a decreased valuation of our common stock; loss of funding sources; and our ability to open and operate new retail stores successfully. It is routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that all forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this report or other periodic reports are made only as of the date made and may change. While we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

FURNITURE BRANDS INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)


	Quarter Ended
	March 31,			March 31,
	2009			2008
Net sales	$	356,871		$	477,200
Cost of sales		276,530			366,181

Gross profit		80,341			111,019
Selling, general & administrative expenses		83,214			101,981

Operating earnings (loss)		(2,873	)		9,038
Interest expense		1,788			4,143
Other income, net		926			2,236

Earnings (loss) from continuing operations before income tax expense		(3,735	)		7,131
Income tax expense		441			3,383

Net earnings (loss) from continuing operations		(4,176	)		3,748
Net earnings from discontinued operations		—			29,868

Net earnings (loss)	$	(4,176	)	$	33,616


Earnings per common share — Basic and Diluted:
Earnings (loss) from continuing operations	$	(0.09	)	$	0.08
Earnings from discontinued operations	$	—		$	0.62
Net earnings (loss)	$	(0.09	)	$	0.69

Weighted average common shares outstanding — Basic and Diluted		48,766			48,560

Selected Items Included in Condensed Consolidated Statement of Operations

The following items are included in our Condensed Statements of Operations for the periods indicated and are the result of our strategic initiatives and other matters.


	Quarter Ended
	March 31,		March 31,
	2009		2008
	(in thousands)
Selected items (increasing)/decreasing earnings before income tax expense:
Factory downtime costs	$	2,286	$	2,299
Severance charges		418		—

Total cost of sales	$	2,704	$	2,299


Closed store expense	$	1,395	$	2,207
Gain on sale of assets		—		(1,243	)
Proxy advisory fees		—		587

Total selling, general and administrative expenses	$	1,395	$	1,551


Valuation allowance — tax assets (included in income tax expense)	$	1,103	$	—

FURNITURE BRANDS INTERNATIONAL
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)


	March 31,		December 31,
	2008		2008
ASSETS

Current assets:
Cash and cash equivalents	$	48,108	$	106,580
Receivables, less allowances of $33,357 ($34,372 at December 31, 2008)		170,385		178,590
Income tax refund receivable		28,805		38,090
Inventories		323,436		350,026
Prepaid expenses and other current assets		14,503		12,592

Total current assets		585,237		685,878

Property, plant and equipment, net		150,313		150,864
Trade names		127,132		127,300
Other assets		35,012		35,476

	$	897,694	$	999,518


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Current maturities of long-term debt	$	2,000	$	30,000
Accounts payable		73,952		85,206
Accrued expenses and other current liabilities		77,681		112,296

Total current liabilities		153,633		227,502

Long-term debt		143,000		160,000
Deferred income taxes		27,925		27,917
Pension liability		135,284		137,199
Other long-term liabilities		74,035		80,406

Shareholders’ equity		363,817		366,494

	$	897,694	$	999,518

FURNITURE BRANDS INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)


	Quarter Ended
	March 31,			March 31,
	2009			2008
Cash flows from operating activities:
Net earnings (loss)	$	(4,176	)	$	33,616
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation		5,291			6,662
Compensation expense related to stock option grants and restricted stock awards		1,103			767
Provision (benefit) for deferred income taxes		40			893
Gain on sale of discontinued operations		—			(48,059	)
Other, net		(614	)		(1,406	)
Changes in operating assets and liabilities:
Accounts receivable		7,411			12,732
Income tax refund receivable		9,285			—
Inventories		27,439			13,663
Prepaid expenses and other assets		(2,191	)		1,114
Accounts payable and other accrued expenses		(46,046	)		42,895
Other long-term liabilities		(6,807	)		(12,534	)

Net cash provided by (used in) operating activities		(9,265	)		50,343


Cash flows from investing activities:
Acquisition of stores, net of cash acquired		—			(8,741	)
Proceeds from the sale of business, net of cash sold		—			73,309
Proceeds from the disposal of assets		51			3,261
Additions to property, plant and equipment		(4,248	)		(2,150	)

Net cash provided by (used in) investing activities		(4,197	)		65,679


Cash flows from financing activities:
Payments of long-term debt		(45,000	)		(65,000	)
Restricted cash used for the payment of long-term debt		—			20,000
Payments of cash dividends		—			(1,940	)
Other		(10	)		(8	)

Net cash used in financing activities		(45,010	)		(46,948	)


Net increase (decrease) in cash and cash equivalents		(58,472	)		69,074
Cash and cash equivalents at beginning of period		106,580			118,764

Cash and cash equivalents at end of period	$	48,108		$	187,838


Supplemental disclosure:
Cash payments (refunds) for income taxes, net	$	(9,380	)	$	419


Cash payments for interest expense	$	2,329		$	5,647

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