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Furniture Brands loss triples as third-quarter sales sink 17.6%

Company suspends dividend to conserve cash

Jay McIntosh -- Furniture Today, October 31, 2008

ST. LOUIS - Furniture Brands International reported a 17.6% sales decline and wider loss of $41.7 million in the third quarter as it took restructuring charges it said were aimed at positioning the company to weather a frosty sales climate.

Furniture Brands also slashed its sales and earnings estimates for the full year, saying it now expects a loss of $2.25 to $2.45 per share. In July it was forecasting a loss of 49 to 55 cents per share.

To conserve cash, meanwhile, FBI's board on Thursday suspended the company's quarterly stock dividend of 4 cents per share, which should save $8 million a year.

Sales of $412.8 million in the third quarter were down from $500.8 million in the same period last year. Both quarters exclude the results of Hickory Business Furniture, the contract furniture unit the company sold earlier this year.

The quarterly loss from continuing operations a year ago was $13.7 million or 31 cents per share.

Results for the quarter just ended included $48.4 million in pretax charges and temporary costs, most of which were non-cash, for moves including closing stores and factories, taking factory downtime and writing down the value of inventory - actions that mainly stemmed from the weakened economy, the company said. In the third quarter of 2007, such charges came to $24 million.

"The management team is continuing to focus on Furniture Brands' financial structure. We are working to ensure that the company will emerge from this period of economic instability as a stronger competitor," said Ralph Scozzafava, chairman and CEO.

FBI said it expects to take another $56 million to $72 million in restructuring charges in the fourth quarter.

The company said it had cash and equivalents of $110 million as of Sept. 30 and expects to end the year with cash of $80 million to $95 million.

For the first nine months of the year, Furniture Brands reported a loss of $32.1 million or $1.27 per share from continuing operations on sales of $1.3 billion. For the same period a year earlier, the loss was $5 million or 19 cents per share on sales of nearly $1.6 billion.

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FBI sales fall 17.6%

Nov 9, 2008

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