FBI boosts borrowing power
By Furniture Today Staff -- Furniture Today, April 30, 2007
St. Louis — Furniture Brands International has boosted its borrowing power with the modification of certain debt agreements, and also cut the base salary of Chairman and CEO Mickey Holliman from $925,000 to $694,000.
The furniture maker, importer and retailer agreed to put up collateral — including accounts receivables, cash and equivalents, inventory and intangible goodwill — in order to ease restrictions on its debt-to-earnings ratio in financial covenants with bondholders and creditors, the company said in a filing with the Securities and Exchange Commission.
FBI gave no explanation for the 25% cut in Holliman's base salary.
In its annual report released March 1, Furniture Brands warned that financial covenants in its $400 million revolving credit facility and $150 million note purchase agreement would likely not be in compliance on March 31.
On its modified credit line, the company's new debt-to-earnings ratio cannot exceed $4.25 for every dollar earned. The figure previously was $3.25.
In first-quarter guidance issued on March 14, Holliman said net sales in the first quarter were expected to be down nearly 15% versus the prior year's quarter, and net earnings per share would be in the 3 to 7 cents range.
FBI said in the SEC filing it will seek to negotiate permanent amendments or refinancing on its credit agreement and note purchase agreement before June 29, when the current amendments expire.
Furniture Brands owns Thomasville, Broyhill, Lane, Drexel Heritage, Henredon and Maitland-Smith.
