FBI posts 4.5% 3Q sales gain
By Furniture Today Staff -- Furniture Today, October 28, 2002
St. Louis — Strong performance by its midpriced lines helped Furniture Brands International to a third-quarter sales gain of 4.5%, excluding acquired companies, the company reported.
Including Drexel Heritage, Henredon and Maitland-Smith, which Furniture Brands acquired 10 months ago, sales were up 25.5% to $563.2 million for the largest U.S. manufacturer of residential furniture.
Profits of $24.7 million were up nearly 78% from last year's third quarter. Excluding restructuring charges a year ago and accounting rule changes, the company said the comparable gain in profits amounted to 29.4%.
"While business remains comparatively strong at Broyhill and Lane, the companies at the higher end of our product line — Thomasville, Henredon, Drexel Heritage and Maitland-Smith — continue to show flat to slightly down orders year over year," said Mickey Holliman, Furniture Brands chairman and chief executive officer.
He predicted "huge growth" for Drexel as changes in management, sourcing, product and its retail store program take effect. Henredon and Maitland-Smith's profit margins also will rebound when their revenue starts growing again, he said.
"We're not happy at all with the results that Thomasville has achieved this year," he added. "Their revenues are down from a year ago and we've got to move with some dispatch to get the revenue line at Thomasville moving again, but that has nothing to do with the integrity of the brand. It is outstanding. I expect to see the revenue line of Thomasville change significantly in 2003."
He praised Lane's performance and prospects in both upholstery and case goods. Last year, Lane shifted from domestically produced wood products to imports.
Holliman noted the third quarter is usually the company's weakest. He said there were also negative effects this year from "two plant closures, some discount programs designed to stimulate sales, and our ongoing transition to a higher level of offshore sourcing."
Cash flow remained strong, however, and the company said it has reduced long-term debt to its goal of 30% of book capitalization. Holliman said this gives the company the "flexibility to invest wisely," but downplayed the possibility of further acquisitions before it gets its current operations closer to target levels of profitability.
| Furniture Brands International | |||
|---|---|---|---|
| Owns Broyhill, Drexel Heritage, Henredon, Lane, Maitland-Smith and Thomasville | |||
| Earnings per share are fully diluted. | |||
| Quarter ended 9/30 | 2002 | 2001 | Change |
| (a) Based on average shares outstanding of 56.2 million in the 2002 quarter, 51.5 million in the 2001 quarter, 56.5 million in the 2002 nine months and 51.3 million in the 2001 nine months. (c) Includes an $18 million pretax asset impairment charge. | |||
| Sales | $563,246,000 | $448,682,000 | 25.5% |
| Operating income | 54,795,000 | 38,780,000 | 41.3% |
| Net income | 24,658,000 | 13,871,000 | 77.8% |
| Earnings per share (a) | 0.44 | 0.27 | 63.0% |
| 9 months ended 9/30 | 2002 | 2001 | Change |
| Sales | $1,802,218,000 | $1,414,512,000 | 27.4% |
| Operating income | 189,171,000 | 129,883,000 | 45.6% |
| Net income | 89,514,000 | (b)35,199,000 | 154.3% |
| Earnings per share (a) | 1.59 | 0.69 | 130.4% |
