Furniture Brands reports 35.9% sales decline

But company trims loss to $16 million

Larry Thomas -- Furniture Today, August 5, 2009

ST. LOUIS — Furniture Brands International said second quarter sales were down 35.9% from the same period last year, but the company reduced its net loss through cost controls and the elimination of some unprofitable sales.

The net loss of $16 million or 33 cents per share reflects the continuing "depressed state" of the furniture industry, said Ralph Scozzafava, chairman and CEO.

"Furniture Brands' sales results for the quarter reflect these trends as well as management's decision to limit the credit exposure to weak retail partners and by exiting unprofitable licensing arrangements," he said.

In last year's second quarter, FBI recorded a net loss of $23.9 million or 49 cents per share.

Sales for the quarter ended June 30 totaled $288.3 million, down from $449.9 million in last year's second quarter.

Gross margin slipped to 21.4% from 22.3% in the same quarter last year, but the company slashed selling, general and administrative expenses by 42% to $76 million.

"Maintaining gross margins and lowering operating expenses during this severe industry downturn helps to strengthen or balance sheet while creating operating leverage that will benefit financial performance when industry conditions improve," Scozzafava said.

For the six months ended June 30, sales fell 30.4% to $645.1 million.

The six-month loss totaled $20.2 million or 41 cents per share. In the first half of last year, the company had a profit of $9.7 million or 20 cents per share.

FBI owns Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Maitland-Smith, Hickory Chair, Laneventure and Pearson.