ST. LOUIS, May 3, 2012 (GLOBE NEWSWIRE) -- Furniture Brands International (NYSE:FBN) today announced financial results for the first quarter ended March 31, 2012.
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Net sales of $287.3 million in the first quarter of 2012, a decline of 3.6% compared to net sales of $297.9 million in the first quarter of 2011
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Operating income of $1.4 million as compared to an operating loss of $2.1 million in the first quarter of 2011
- Earnings per share of $0.01 as compared to a $0.06 loss per share in the prior year period
Mr. Ralph Scozzafava, Chairman and CEO stated, "We were pleased to report an improvement in operating earnings this quarter as the cost and efficiency initiatives put in place are yielding the intended results. We are focused on driving sales by developing relevant product and values that resonate with customers, providing the highest level of service to our dealer partners and improving the performance of our company owned stores. We will do this while staying disciplined on the cost and capital allocation front in order to continue to improve profitability and deliver on our 2012 goal of generating positive free cash flow."
Net sales for the first quarter of 2012 were $287.3 million, a decline of 3.6% compared to net sales of $297.9 million in the first quarter of 2011. First quarter 2012 retail sales at the 64 company-owned stores and showrooms totaled $35.5 million compared with retail sales of $39.0 million at 65 company owned stores and showrooms in the prior year period. First quarter of 2012 same-store sales at the 44 Thomasville stores that the company has owned for more than 15 months were even with the first quarter of 2011, following a 17% increase in the prior year period.
Gross profit for the first quarter of 2012 was $71.4 million and gross margin was 24.9% compared to $77.5 million in gross profit and 26.0% gross margin in the prior year period. The decrease in first quarter 2012 gross margin was primarily due to new product rollout and clearance of older inventory, partially offset by a higher retail margin and lower expenses resulting from prior restructuring activities.
Selling, general and administrative expenses for the first quarter of 2012 totaled $70.0 million as compared to $79.6 million in the first quarter of 2011. This decrease was primarily due to lower expenses resulting from prior cost reduction activities, lower non-working marketing spend, and favorability on benefits expenses.
The Company had a pretax profit of $0.9 million in the first quarter of 2012 as compared to a pretax loss of $2.3 million in the prior year period.
For the first quarter of 2012, Furniture Brands reported a net profit of $0.4 million, or $0.01 per share compared to a net loss of $3.1 million, or $0.06 loss per share in the first quarter of 2011.
An increase in accounts receivable, resulting from increasing sales throughout the quarter, particularly in March, drove a sequential increase in working capital and the Company ended the quarter with a cash balance of $15.4 million and a debt balance of $77 million.
Upcoming Investor Event
A conference call will be held to discuss first quarter results at 7:30 a.m. (Central Time) on May 3, 2012. Those wishing to participate should call 800-322-2803 (domestic calls) or 617-614-4925 (international calls) and reference passcode 38551706. The call can also be accessed in the Upcoming Investor Events section of the company's website at furniturebrands.com under "Investor Info". Access to the call and the release will be archived for one year.
For those unable to attend the conference call, it will be available via taped replay from 10:30 a.m. (Central Time) on May 3, 2012 through 5:00 p.m. (Central Time) on May 10, 2012. That replay can be accessed by dialing 888-286-8010 (617-801-6888 for international calls) and entering passcode 66735792.
About Furniture Brands
Furniture Brands International, Inc. (NYSE:FBN) is a world leader in designing, manufacturing, sourcing and retailing home furnishings. Furniture Brands markets products through a wide range of channels, including its own Thomasville retail stores and through interior designers, multi-line/independent retailers and mass merchant stores. Furniture Brands' portfolio includes some of the best known and most respected brands in the furniture industry, including Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and La Barge. To learn more, visit furniturebrands.com.
The Furniture Brands International logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2757
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, or 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, 2011, and in our other subsequent 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; changes in our pension funding obligations; 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 realignments; manufacturing realignments and cost savings programs; 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; loss of key personnel; impairment of intangible assets; anti-takeover provisions which could result in a decreased valuation of our common stock; loss of funding sources or our inability to secure additional financing to meet our operating and capital needs; 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, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (in thousands except per share data) | ||
| (unaudited) | ||
| Three Months Ended | ||
| March 31, | March 31, | |
| 2012 | 2011 | |
| Net sales | $ 287,258 | $ 297,856 |
| Cost of sales | 215,816 | 220,312 |
| Gross profit | 71,442 | 77,544 |
| Selling, general & administrative expenses | 70,007 | 79,598 |
| Earnings (loss) from operations | 1,435 | (2,054) |
| Interest expense | 750 | 761 |
| Other income, net | 204 | 511 |
| Earnings (loss) before income tax expense | 889 | (2,304) |
| Income tax expense | 510 | 754 |
| Net earnings (loss) | $ 379 | $ (3,058) |
| Net earnings (loss) per common share: | ||
| Basic and diluted | $ 0.01 | $ (0.06) |
| Weighted average common shares outstanding: | ||
| Basic | 55,031 | 54,818 |
| Diluted | 55,180 | 54,818 |
| FURNITURE BRANDS INTERNATIONAL, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
| (unaudited) | ||
| March 31, | December 31, | |
| 2012 | 2011 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 15,418 | $ 25,387 |
| Receivables, less allowances of $11,152 | ||
| ($10,413 at December 31, 2011) | 131,142 | 107,974 |
| Inventories | 225,514 | 228,155 |
| Prepaid expenses and other current assets | 10,805 | 9,490 |
| Total current assets | 382,879 | 371,006 |
| Property, plant and equipment, net | 114,822 | 115,803 |
| Trade names | 77,508 | 77,508 |
| Other assets | 47,330 | 50,179 |
| $ 622,539 | $ 614,496 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 98,399 | $ 85,603 |
| Accrued expenses | 49,513 | 53,551 |
| Total current liabilities | 147,912 | 139,154 |
| Long-term debt | 77,000 | 77,000 |
| Deferred income taxes | 19,775 | 19,330 |
| Pension liability | 182,740 | 185,991 |
| Other long-term liabilities | 59,728 | 60,740 |
| Shareholders' equity | 135,384 | 132,281 |
| $ 622,539 | $ 614,496 | |
| FURNITURE BRANDS INTERNATIONAL, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
| (unaudited) | ||
| Three Months Ended | ||
| March 31, | March 31, | |
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net earnings (loss) | $ 379 | $ (3,058) |
| Adjustments to reconcile net earnings (loss) to net cash used in operating activities: | ||
| Depreciation and amortization | 4,968 | 6,114 |
| Compensation expense related to stock option grants and restricted stock awards | 596 | 974 |
| Other, net | 226 | (791) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (23,167) | (9,120) |
| Inventories | 2,641 | (5,820) |
| Prepaid expenses and other assets | (1,300) | (2,515) |
| Accounts payable and other accrued expenses | 8,934 | 10,663 |
| Deferred income taxes | 268 | (6) |
| Other long-term liabilities | (2,139) | (1,452) |
| Net cash used in operating activities | (8,594) | (5,011) |
| Cash flows from investing activities: | ||
| Proceeds from the disposal of assets | 51 | 2,212 |
| Additions to property, plant, equipment and software | (1,440) | (8,340) |
| Net cash used in investing activities | (1,389) | (6,128) |
| Cash flows from financing activities: | ||
| Other | 14 | 21 |
| Net cash provided by financing activities | 14 | 21 |
| Net decrease in cash and cash equivalents | (9,969) | (11,118) |
| Cash and cash equivalents at beginning of period | 25,387 | 51,964 |
| Cash and cash equivalents at end of period | $ 15,418 | $ 40,846 |
| Supplemental disclosure: | ||
| Cash refunds for income taxes, net | $ 63 | $ 606 |
| Cash payments for interest expense | $ 823 | $ 652 |
| FURNITURE BRANDS INTERNATIONAL, INC. | ||||
| SUPPLEMENTAL RETAIL INFORMATION | ||||
| (dollars in thousands) | ||||
| (unaudited) | ||||
| Thomasville Stores (a) | All Other Retail Locations (b) | |||
| Three Months Ended | Three Months Ended | |||
| March 31, | March 31, | March 31, | March 31, | |
| 2012 | 2011 | 2012 | 2011 | |
| Net sales | $ 27,458 | $ 28,980 | $ 8,033 | $ 10,015 |
| Cost of sales | 15,666 | 17,628 | 5,002 | 6,691 |
| Gross profit | 11,792 | 11,352 | 3,031 | 3,324 |
| Selling, general & administrative expenses - open stores | 14,868 | 15,645 | 3,922 | 5,247 |
| Loss from operations - open stores (c) | (3,076) | (4,293) | (891) | (1,923) |
| Selling, general & administrative expenses - closed stores (d) | -- | -- | 939 | 1,422 |
| Loss from operations - retail operations (c) | $ (3,076) | $ (4,293) | $ (1,830) | $ (3,345) |
| Number of open stores and showrooms at end of period | 48 | 47 | 16 | 18 |
| Number of closed locations at end of period | -- | -- | 23 | 27 |
| Same-store-sales (e): | ||||
| Percentage change | 0% | 17% | (f) | (f) |
| Number of stores | 44 | 46 | ||
| a) This supplemental data includes company-owned Thomasville retail store locations that were open during the period. | ||||
| b) This supplemental data includes all company-owned retail locations other than open Thomasville stores ("all other retail locations"). | ||||
| c) Loss from operations does not include our wholesale profit on the above retail net sales. | ||||
| d) SG&A - closed stores includes occupancy costs, lease termination costs, and costs associated with closed store lease liabilities. | ||||
| e) The Thomasville same-store-sales percentage is based on sales from stores that have been in operation and company-owned for at least 15 months, including any stores that had been opened for at least 15 months but were closed during the period. | ||||
| f) Same-store-sales data is not meaningful and is not presented for all other retail locations because results include retail store locations of multiple brands including six Drexel Heritage stores, one Henredon store, one Broyhill store, and eight designer showrooms at March 31,2012; and other than designer showrooms, it is not one of our long-term strategic initiatives to grow non-Thomasville brand company-owned retail locations. | ||||