FBI net sales jump 26.8%, net earnings double in '02
By Larry Thomas -- Furniture Today, January 26, 2003
St. Louis — Boosted by its acquisitions of Henredon, Drexel Heritage and Maitland-Smith, Furniture Brands International said net sales jumped 26.8% to $2.4 billion in 2002.
The company, which also owns Broyhill, Lane and Thomasville, said sales rose a more modest 6.4% excluding the acquisitions. Virtually all of that growth was at midpriced specialists Broyhill and Lane as the company's high-end brands continued to struggle.
"Broyhill and Lane had record sales, with Lane recording an extraordinary performance," said Mickey Holliman, chairman, president and chief executive officer. "There was no change in our business at the upper end. Thomasville, Drexel Heritage and Maitland-Smith ... had negative sales comparisons throughout much of the year."
Net earnings for the year totaled $118.8 million, more than double the $58 million profit in 2001.
Holliman said earnings and margins would have been stronger — particularly in the fourth quarter — had it not been for the aggressive promotions mandated by weak retail business conditions.
"We're having to drive the business right now," he said during a conference call with securities analysts. "We're discounting. We're promoting aggressively."
He said about 25% of the company's revenues were generated from imports — mostly at Broyhill and Lane — and said 57% of sales came from proprietary distribution in retail galleries or standalone stores.
After heaping praise on Lane and Broyhill, Holliman noted that Drexel Heritage "lost a hell of a lot of money last year," and said he didn't think a turnaround would be complete until late this year.
"We've got the right organization in place. We've got the right strategy in place. Now, all we need is time," he said. "It's a two-year project."
He told analysts he expects overall sales to increase 4% to 5% this year, but predicted that the first quarter would be flat.
"Based on incoming order trends and discussions with our retail partners, we see no improvement in the current business climate for the near term," Holliman said.
| Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill, Drexel Heritage, Henredon, Lane, Maitland-Smith and Thomasville | |||
| Earnings per share are fully diluted. | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) Includes the results of Drexel Heritage, Henredon and Maitland-Smith from their Dec. 28, 2001 acquisition. (b) Based on average shares outstanding of 56.1 million in the 2002 quarter, 51.5 million in the 2001 quarter, 56.4 million in the 2002 year and 51.3 million in the 2001 year. (c) Includes an $18 million pretax asset impairment charge. | |||
| Sales | $595,491,000 | $476,801,000 | 24.9% |
| Operating income | 62,495,000 | 42,963,000 | 45.5% |
| Net income | 29,317,000 | 22,831,000 | 28.4% |
| Earnings per share (b) | 0.52 | 0.44 | 18.2% |
| Year ended 12/31 | 2002 | 2001 | Change |
| Sales | $2,397,709,000 | $1,891,313,000 | 26.8% |
| Operating income | 251,666,000 | 172,846,000 | 45.6% |
| >Net income | 118,831,000 | (c)58,030,000 | 104.8% |
| Earnings per share (b) | 2.11 | 1.13 | 86.7% |
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