FBI has cash, hints at acquisitions
By Jay McIntosh -- Furniture Today, October 28, 2001
ST. LOUIS — Furniture Brands International says it has finished paying down its debt and is accumulating cash, which could set the company up for more stock repurchases or acquisitions.
"The weak are getting weaker and we are continuing to take a sharp pencil to the many (possible) acquisitions that are out there," said Mickey Holliman, chairman and chief executive officer, in announcing third-quarter earnings last week. He added, "Don't ask me to speculate or comment on rumors that are floating around."
Strong cash flow enabled the company, parent of Broyhill, Lane and Thomasville, to pass its debt-to-capitalization target in the third quarter as it paid off another $59.6 million in debt.
Sales of $448.7 million in the quarter were down 10.2% from the same period a year earlier. Earnings of $13.9 million were down 40.7%. Earnings per share of 27 cents were at the high end of the range the company had projected earlier, Holliman said.
Restructuring charges related to factory closures and realignments amounted to $1.2 million after taxes in the quarter. Net earnings excluding the charges would have been $15.1 million or 29 cents per share, the company said.
Holliman said this was "the fifth tough quarter in a row" for the company and the industry.
"Order rates have generally returned to pre-Sept. 11 levels, but we have yet to see any sustained improvement," he said. He projected fourth-quarter earnings at 34 to 39 cents per share, compared with 48 cents a year ago.
Case goods took the biggest hit in sales in the third quarter, which affected the Thomasville and Broyhill divisions the most, Holliman said. Lane case goods sales also were down, but that was balanced by a strong performance in upholstery.
He said Broyhill and Lane introductions received favorable reaction at the High Point market.
"Attendance (in High Point) was probably off somewhere in the 25%-30% range, but it didn't affect any of the major retailers across the country. All of them were present," Holliman said.
| Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill Furniture Inds., Thomasville Furniture and Lane | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/30 | 2001 | 2000 | Change |
| Sales | $448,682,000 | $499,746,000 | (10.2%) |
| Operating income | 38,780,000 | 59,242,000 | (34.5%) |
| Net income | (a)13,871,000 | (b)23,373,000 | (40.7%) |
| Earnings per share | 0.27 | 0.46 | (41.3%) |
| 9 months ended 9/30 | 2001 | 2000 | Change |
| Sales | $1,414,512,000 | $1,596,772,000 | (11.4%) |
| Operating income | 129,883,000 | 202,266,000 | (35.8%) |
| Net income | (a)35,199,000 | (b)81,594,000 | (56.9%) |
| Earnings per share | 0.69 | 1.62 | (57.4%) |
| (a) Includes pretax charges from the 1992 asset revaluation of $3 million in the 2001 quarter and $9.3 million in the 2001 nine months and a $1.2 million net restructuring charge in both periods. The 2001 nine months also includes an $18 million pretax asset impairment charge. (b) Includes pretax charges from the 1992 asset revaluation of $3.4 million in the 2000 quarter and $10.3 million in the 2000 nine months. The 2000 nine months also includes a $2.5 million extraordinary charge for the early extinguishment of debt. | |||
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