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FBI 4Q earnings fall 88%

By Furniture Today Staff -- Furniture Today, February 4, 2007

St. Louis — Sluggish sales and aggressive promotions sent Furniture Brands International's earnings tumbling 88% in the fourth quarter to $2.1 million, the manufacturer and importer reported.

Sales in the quarter were down 1.2% from a year earlier to $586.5 million, and up 1.3% for the year to $2.4 billion.

Because of the weak fourth quarter, earnings for the year were down 10.4% to $55.1 million, the company said.

And the current quarter looks no better. Chairman and CEO Mickey Holliman predicted sales will be off 10% from the strong 2005 first quarter, and is forecasting earnings of 12 to 16 cents per share, compared with 61 cents a year ago.

"Business conditions in the fourth quarter were difficult across all our companies," said Holliman. "As the quarter progressed, retail conditions materially softened.... We promoted aggressively and took additional discounts on selected slower-moving products. We also scheduled additional downtime at our domestic facilities."

Furniture Brands sells under such brands as Broyhill, Lane, Thomasville, Henredon, Drexel Heritage and Maitland-Smith.

In a conference call with analysts, Holliman said, "For the coming year, all the brands will demonstrate much more discipline and focus on a few key initiatives.... We currently place too much emphasis on chasing down every sale. We often do so with generous terms, unprofitable promotions and a proliferation of SKUs.... I expect all the brands to focus on cost-cutting initiatives and I expect many of those initiatives will be led by Furniture Brands itself."

Holliman also said:

"At Broyhill, we're still working on finding a permanent leader.... The company has seen much success in their upholstery line of late and I expect (a new quick-ship) program will add to that momentum."
"Lane, for the most part, had a decent 2006. Their challenge in 2007 will be to build on that momentum."
"Thomasville (has) really retooled the business.... In the coming year, I expect it will open eight stores and further drive the profitability of existing stores."
"Our high-end companies, Henredon and Drexel Heritage, must work to keep their product distinct."

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	2006	2005	Change
(a) Includes restructuring, asset impairment and severance charges of 2 cents per share in the 2006 quarter, 2 cents per share in the 2005 quarter, 10 cents per share in the 2006 year and 27 cents per share in the 2005 year. The 2006 year also includes an accounting gain of 11 cents per share related to interest rate swaps, offset by 7 cents per share in increase interest expense and 2 cents per share in increased reserves related to litigation. (b) Based on average shares outstanding of 48.3 million in the 2006 quarter, 48.8 million in the 2006 year, 50.5 million in the 2005 quarter and 52.1 million in the 2005 year.
Sales	$586,538,000	$593,529,000	(1.2%)
Operating income	3,233,000	27,392,000	(88.2%)
Net income (a)	2,058,000	17,142,000	(88.0%)
Earnings per share (b)	0.04	0.34	(88.2%)
Year ended 12/31	2006	2005	Change
Sales	$2,418,175,000	$2,386,774,000	1.3%
Operating income	83,722,000	99,348,000	(15.7%)
Net income (a)	55,055,000	61,436,000	(10.4%)
Earnings per share (b)	1.13	1.18	(4.2%)

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Furniture Brands 4Q earnings plunge 88%; sales slip 1.2%

Feb 1, 2007

FBI 2Q earnings drop 65.8%

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