FBI sales drop 10.6%, net income slips 45.2%
By Larry Thomas -- Furniture Today, January 27, 2002
ST. LOUIS — Despite a strong performance by its Lane upholstery unit, Furniture Brands International said 2001 sales fell 10.6%, while net income tumbled 45.2%.
FBI fell short of the record $2.12 billion in sales it posted in 2000, but said its December acquisitions of Henredon, Drexel Heritage and Maitland-Smith should easily push the company over the mark this year.
"We are beginning to see some signs that the economy is firming up," said Mickey Holliman, chairman, president and chief executive officer. "We stand firm in our belief that the worst is behind us."
Sales in 2001 (not including the newly acquired companies) totaled $1.89 billion. Net income was $58 million, compared with $105.9 million in 2000.
Holliman said the company's Thomasville Furniture Inds. unit had an especially tough year because most of its products are upper-end goods. Sales at its Lane and Broyhill units, whose goods are at middle to upper-middle price points, also were off last year.
The one bright spot was Lane's upholstery business, which had a sales increase in 2001. Holliman said that business "is absolutely on fire right now," and said its factories are working 52-hour weeks to keep up with demand.
"This increase is not because business is so great. These guys are taking market share away from people they compete against," he said in a conference call with securities analysts.
Last year's net income was hurt by, among other things, a restructuring charge of $17.2 million. During the year, the company closed 12 of its 48 manufacturing and warehouse factories — mostly in Lane's case goods division — and eliminated more than 3,000 jobs.
"Obviously, these initiatives had an impact on our earnings, but because of these bold steps, we closed the year leaner and financially stronger than at any time in our recent history," said Holliman.
FBI's income included a one-time gain of $5.2 million on the sale of Lane's 12% stake in the International Home Furnishings Center (see accompanying story).
| Holliman |
Holliman said cash provided by operations was an "extraordinary" $185 million last year, and the strong cash flow has continued into 2002.
If sales from Henredon, Drexel Heritage and Maitland-Smith had been included in last year's figures, Holliman said sales would have topped $2.3 billion. FBI paid $175 million in cash and 4 million shares of FBI stock to LifeStyle Furnishings International for the three companies.
| • Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill, Drexel Heritage, Henredon, Lane, Maitland-Smith and Thomasville | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/31 | 2001 | 2000 | Change |
| Sales | $476,801,000 | $519,467,000 | (8.2%) |
| Operating income | 42,963,000 | 48,503,000 | (11.4%) |
| Net income (a) | 22,831,000 | 24,307,000 | (6.1%) |
| Earnings per share | 0.44 | 0.48 | (8.3%) |
| Year ended 12/31 | 2001 | 2000 | Change |
| Sales | $1,891,313,000 | $2,116,239,000 | (10.6%) |
| Operating income | 172,846,000 | 250,769,000 | (31.1%) |
| Net income (b) | 58,030,000 | 105,901,000 | (45.2%) |
| Earnings per share | 1.13 | 2.10 | (46.2%) |
| (a) Includes pretax charges related to the 1992 asset revaluation of $2.8 million in the 2001 quarter and $3.3 million in the 2000 quarter. (b) Includes pretax charges related to the 1992 asset revaluation of $12.1 million in the 2001 year and $13.5 million in the 2000 year. The 2001 year also includes an $18 million pretax asset impairment charge and the 2000 year also includes a $2.5 million extraordinary charge for the early extinguishment of debt. | |||
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