FBI acquisitions lead to big sales, earnings gains
By Furniture Today Staff -- Furniture Today, April 28, 2002
ST. LOUIS — Furniture Brands International reported a first-quarter sales increase of 25.3% to $634.5 million and a 66.5% jump in net income to $32.8 million.
Much of the sales increase for the leading U.S. furniture maker was due to its acquisition late last year of Drexel Heritage, Henredon and Maitland-Smith. Sales at FBI's original divisions — Broyhill, Lane and Thomasville — were up 5.1% in the quarter.
The biggest gains came in FBI's core midpriced product lines.
"We began to see a significant turn-around in some segments of our business toward the end of last year and continuing through the first quarter of this year," said Mickey Holliman, chairman, president and chief executive officer.
"In our middle-price product offerings, represented primarily by Broyhill and Lane, order trends and revenues have been strong since the start of the year," he said. "This is particularly true in the upholstery business, but we have seen improvement in the case goods business as well."
Holliman said business is slower at FBI's high end, with Drexel Heritage, Henredon and Thomasville showing negative performance compared to last-year's first quarter. Furniture Brands doesn't break out figures for its divisions.
"Any positive changes in revenues at our higher-end businesses, particularly in the second half of this year, should add significantly to our earnings performance," he said.
FBI's newly acquired high-end companies are folding into the business smoothly, he said. FBI paid down 21%, or $30.8 million, of the $140 million debt related to the purchase of Drexel Heritage, Henredon and Maitland-Smith, Holliman said.
He expects soft business at the high end until the second half of 2002, then a strengthening through the end of the year.
Based on second-quarter order trends to date, Holliman expects revenues to increase 25% for the period compared to last year, and 4% to 6% excluding last year's acquisitions.
| Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill, Drexel Heritage, Henredon, Lane, Maitland-Smith and Thomasville | |||
| Earnings per share are fully diluted. | |||
| Quarter ended 3/31 | (a)2002 | 2001 | Change |
| Sales | $634,461,000 | $506,182,000 | 25.3% |
| Operating income | 67,912,000 | 51,355,000 | 32.2% |
| Net income | 32,771,000 | 19,681,000 | 66.5% |
| Earnings per share | (b)0.58 | 0.39 | 48.7% |
| (a) Includes the results of Henredon, Drexel Heritage and Maitland-Smith, all acquired on Dec. 28, 2001. (b) Based on average shares outstanding of 56.4 million in the 2002 quarter and 51.1 million in the 2001 quarter. | |||
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