Proxy fight over FBI board seats heats up
By Furniture Today Staff -- Furniture Today, April 27, 2008
St. Louis — A proxy fight over Furniture Brands International board seats heated up in advance of the May 1 annual meeting, with the company and a dissident group sending letters to shareholders and lining up allies.
Sun Capital, a private equity firm and significant Furniture Brands stockholder, has nominated three new board members against the company's candidates.
FBI executives and Sun Capital have each written to shareholders, with the company claiming its strategic plan "continues to drive improved performance" and Sun decrying the company's "continued deterioration in financial performance."
Meanwhile, three shareholder advisory services offered varying recommendations on how to vote in the proxy battle. Proxy Governance urged voting for the company's slate of board nominees, and RiskMetrics Group's ISS Governance Services urged support of the dissident slate. Glass Lewis & Co. recommended shareholders vote for two Sun Capital candidates, Alan Schwartz and T. Scott King, but did not mention the third, Ira Kaplan.
Meanwhile, Furniture Brands announced that it expects to report higher earnings from continuing operations in the first quarter despite a decline of about 14% in sales, to $477 million. The manufacturer and importer said the figures exclude the effect of the sale and operations of contract unit Hickory Business Furniture, which is treated as discontinued.
CEO and Vice Chairman Ralph Scozzafava said the company expects earnings per share to improve in later quarters this year, keeping the company on track for a 2008 target of 40 to 60 cents per share.
He said the company continued to strengthen its balance sheet and had cash at the end of the quarter of $188 million while paying down its debt $235 million.
Scozzafava added that actions Furniture Brands has taken in the recent quarters, including closing 18 unprofitable stores and 10 manufacturing and storage facilities, "will ultimately deliver $40 million to $50 million in annual savings."
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