Fbi Wind Down (FBN) 10-Q 2013 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 30, 2013

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from    to

Commission file number 001-00091

Furniture Brands International, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	43-0337683 (I.R.S. Employer Identification No.)
1 North Brentwood Blvd., St. Louis, Missouri (Address of principal executive offices)	63105 (Zip Code)

(314) 863-1100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

þ Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer R Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).

o Yes   þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

56,314,585 shares as of April 27, 2013

FURNITURE BRANDS INTERNATIONAL, INC.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Financial Statements (unaudited):
Consolidated Balance Sheets:	3
March 30, 2013
December 29, 2012
Consolidated Statements of Operations:	4
Three Months Ended March 30, 2013
Three Months Ended March 31, 2012
Consolidated Statements of Comprehensive Income (Loss):	5
Three Months Ended March 30, 2013
Three Months Ended March 31, 2012
Consolidated Statements of Cash Flows:	6
Three Months Ended March 30, 2013
Three Months Ended March 31, 2012
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	20
Item 4. Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	27
Item 6. Exhibits	27

Trademarks and trade names referred to in this filing include Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Hickory Chair, Pearson, Lane Venture, Maitland-Smith, La Barge, and Creative Interiors, among others.

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PART I

Item 1.Financial Statements

FURNITURE BRANDS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands except per share data)

(unaudited)

	March 30, 2013			December 29, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	10,283		$	11,869
Receivables, less allowances of $12,279 ($11,615 at December 29, 2012)	112,418			125,739
Inventories	241,660			244,333
Prepaid expenses and other current assets	10,866			11,287
Total current assets	375,227			393,228
Property, plant, and equipment, net	98,712			103,403
Trade names	76,105			76,105
Other assets	46,268			45,705
Total assets	$	596,312		$	618,441
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	104,173		$	113,590
Accrued employee compensation	19,593			18,431
Other accrued expenses	35,811			40,310
Total current liabilities	159,577			172,331
Long-term debt	116,788			105,000
Deferred income taxes	22,063			18,002
Pension liability	211,112			213,295
Other long-term liabilities	50,418			55,015
Shareholders’ equity:
Preferred stock, 10,000,000 shares authorized, no par value — none issued	—			—
Common stock, 200,000,000 shares authorized, $1.00 stated value — 60,614,741 shares issued at March 30, 2013 and December 29, 2012	60,615			60,615
Paid-in capital	187,515			187,534
Retained earnings	116,582			137,784
Accumulated other comprehensive loss	(232,167		)	(234,397		)
Treasury stock at cost 4,300,156 shares at March 30, 2013 and 4,305,787 shares at December 29, 2012	(96,191		)	(96,738		)
Total shareholders’ equity	36,354			54,798
Total liabilities and shareholders’ equity	$	596,312		$	618,441

See accompanying notes to consolidated financial statements.

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FURNITURE BRANDS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share data)

(unaudited)

	Three Months Ended
	March 30, 2013			March 31, 2012
Net sales	$	254,727		$	287,258
Cost of sales	203,249			215,816
Gross profit	51,478			71,442
Selling, general, and administrative expenses	69,134			69,984
Impairment of assets, net of recoveries	1,377			23
Operating (loss) earnings	(19,033		)	1,435
Interest expense	2,424			750
Other income, net	112			204
(Loss) earnings before income tax (benefit) expense	(21,345		)	889
Income tax (benefit) expense	(142		)	510
Net (loss) earnings	$	(21,203	)	$	379
Net (loss) earnings per common share — basic and diluted	$	(0.38	)	$	0.01
Weighted average shares of common stock outstanding - Basic	55,348			55,031
Weighted average shares of common stock outstanding - Diluted	55,348			55,180

See accompanying notes to consolidated financial statements.

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FURNITURE BRANDS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended
	March 30, 2013			March 31, 2012
Net (loss) earnings	$	(21,203	)	$	379
Other comprehensive income (loss):
Pension liability	2,247			1,788
Foreign currency translation	(17		)	327
Other comprehensive income, before tax	2,230			2,115
Income tax expense	—			—
Other comprehensive income, net of tax	2,230			2,115
Total comprehensive (loss) income	$	(18,973	)	$	2,494

See accompanying notes to consolidated financial statements.

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FURNITURE BRANDS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended
	March 30, 2013			March 31, 2012
Cash flows from operating activities:
Net (loss) earnings	$	(21,203	)	$	379
Adjustments to reconcile net (loss) earnings to net cash used by operating activities:
Depreciation and amortization	4,011			4,968
Compensation expense related to stock option grants and restricted stock awards	529			596
Impairment of assets	1,377			23
Other, net	35			203
Changes in operating assets and liabilities:
Accounts receivable	13,321			(23,167		)
Inventories	2,673			2,641
Prepaid expenses and other assets	1,108			(1,300		)
Accounts payable and other accrued expenses	(12,286		)	8,934
Deferred income taxes	3,593			268
Long-term liabilities	(4,540		)	(2,139		)
Net cash used by operating activities	(11,382		)	(8,594		)
Cash flows from investing activities:
Additions to property, plant, equipment, and software	(1,821		)	(1,440		)
Proceeds from the disposal of assets	2			51
Net cash used in investing activities	(1,819		)	(1,389		)
Cash flows from financing activities:
Payments of long-term debt	(8,000		)	—
Payments of term loan debt	(212		)	—
Payments for debt issuance costs	(172		)	—
Proceeds from the issuance of long term debt	20,000			—
Other	(1		)	14
Net cash provided by financing activities	11,615			14
Net decrease in cash and cash equivalents	(1,586		)	(9,969		)
Cash and cash equivalents at beginning of period	11,869			25,387
Cash and cash equivalents at end of period	$	10,283		$	15,418
Supplemental disclosure:
Cash payments (refunds) for income taxes, net	$	27		$	(63	)
Cash payments for interest expense	$	2,119		$	823

See accompanying notes to consolidated financial statements.

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FURNITURE BRANDS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands except per share data)

(unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Furniture Brands International, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and such principles are applied on a basis consistent with those reflected in our 2012 Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC"). The year end balance sheet data was derived from audited financial statements. The accompanying unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) which management considers necessary for a fair presentation of the results of the periods presented. These financial statements have been prepared on a condensed basis pursuant to the rules and regulations of the SEC, and accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 29, 2012. The consolidated financial statements consist of the accounts of our Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Financial information reported in prior periods is reflected in a manner consistent with the current period presentation. The results for the three months ended March 30, 2013 are not necessarily indicative of the results which will occur for the full fiscal year ending December 28, 2013.

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates, judgments, and assumptions, which we believe to be reasonable, based on the information available. These estimates, judgments, and assumptions affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

2. RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

The Company has been executing plans to improve its performance. These measures include consolidating and reconfiguring manufacturing facilities, warehouses, and processes to eliminate waste and improve efficiency, managing product inventory levels better to reflect consumer demand, transforming transportation methods to be more cost effective, exiting unprofitable retail locations, limiting credit exposure to weak retail partners, and ceasing unprofitable lines of business and licensing arrangements. In addition, the Company has been executing plans to reduce our workforce and to centralize certain functions.

Restructuring and asset impairment charges associated with these measures include the following:

	Three Months Ended
	March 30, 2013		March 31, 2012
Restructuring charges:
Facility costs to shutdown, cleanup, and vacate	$	40	$	—
Termination benefits	—		148
Closed store occupancy and lease costs	1,328		939
	1,368		1,087
Impairment charges	1,377		23
	$	2,745	$	1,110
Statement of Operations classification:
Cost of sales	$	40	$	—
Selling, general, and administrative expenses	1,328		1,087
Impairment of assets, net of recoveries	$	1,377	$	23
	$	2,745	$	1,110

Asset impairment charges were recorded to reduce the carrying value of closed facilities and related assets to their net realizable value. The determination of impairment charges is based primarily upon (i) consultations with real estate brokers, (ii) proceeds from recent sales of Company facilities, and (iii) the market prices being obtained for similar long-lived assets. Qualifying assets

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related to restructuring are recorded as assets held for sale within Other Assets in the Consolidated Balance Sheets until sold. Total assets held for sale were $5,400 at March 30, 2013 and $4,900 at December 29, 2012.

Closed store occupancy and lease costs include occupancy costs associated with closed retail locations, early contract termination settlements for retail leases, and closed store lease liabilities representing the present value of the remaining lease rentals reduced by the current market rate for sublease rentals of similar properties. This liability is reviewed quarterly and adjusted, as necessary, to reflect changes in estimated sublease rentals.

Activity in the accrual for closed store lease liabilities was as follows:

	Three Months Ended
	March 30, 2013		March 31, 2012
Accrual for closed store lease liabilities at beginning of period	$	12,159	$	17,110
Charges (credit) to expense	685		204
Less cash payments	1,799		1,285
Accrual for closed store lease liabilities at end of period	$	11,045	$	16,029

At March 30, 2013, $4,646 of the accrual for closed store lease liabilities is classified as other accrued expenses, with the remaining balance in Other Long-term Liabilities.

Remaining minimum payments under operating leases for closed stores as of March 30, 2013 are as follows:

	Minimum
	Lease
	Payments —
Year	Closed Stores
2013	$	4,945
2014	6,177
2015	3,742
2016	1,085
2017	357
thereafter	—
	$	16,306

Activity in the accrual for termination benefits was as follows:

	Three Months Ended
	March 30, 2013		March 31, 2012
Accrual for termination benefits at beginning of period	$	4,002	$	876
Charges to expense	—		148
Less cash payments	221		276
Accrual for termination benefits at end of period	$	3,781	$	748

The accrual for termination benefits at March 30, 2013 is classified as Accrued Employee Compensation.

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3. INVENTORIES

Inventories are summarized as follows:

	March 30, 2013		December 29, 2012
Finished products	$	142,078	$	142,900
Work-in-process	15,870		15,840
Raw materials	83,712		85,593
	$	241,660	$	244,333

4. PROPERTY, PLANT, AND EQUIPMENT

Major classes of property, plant, and equipment consist of the following:

	March 30, 2013		December 29, 2012
Land	$	8,719	$	9,007
Buildings and improvements	173,799		175,581
Machinery and equipment	193,694		193,200
	376,212		377,788
Less accumulated depreciation	277,500		274,385
	$	98,712	$	103,403

Depreciation expense was $3,530 and $3,869 for the three months ended March 30, 2013 and March 31, 2012, respectively.

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5. LONG-TERM DEBT

Long-term debt consists of the following:

	March 30, 2013		December 29, 2012
Term Loan	$	49,788	$	50,000
Asset-based loan	67,000		55,000
Less: current maturities	—		—
Long-term debt	$	116,788	$	105,000

On September 25, 2012 (the "effective date"), the Company refinanced its existing asset-based credit facility by entering into a new five-year asset based credit facility (the “ABL”) with a group of financial institutions and a new five-year Term Loan Agreement (the “Term Loan”) in order to provide financial flexibility and increase the Company's borrowing availability. The new ABL is a revolving facility with a commitment of $200,000 subject to a borrowing base of eligible accounts receivable and inventory. The ABL also includes an accordion feature that will allow the Company to increase the ABL by up to $50,000 subject to securing additional commitments from the lenders. The Term Loan is a $50,000 secured facility. Capitalized fees incurred for both of these facilities totals $8,670.

Asset-Based Revolving Credit Facility

The ABL provides for the issuance of letters of credit and cash borrowings, and is secured by a first priority lien on the Company's accounts receivable, inventory, cash deposit and securities accounts and certain related assets (the “ABL Collateral”), and a second priority lien on the Term Loan priority collateral described below. The issuance of letters of credit and cash borrowings are limited by the level of a borrowing base consisting of eligible accounts receivable and inventory, less a $25,000 availability block and certain reserves set forth in the ABL agreement (the “Borrowing Base”). The amount of the Borrowing Base above the current level of letters of credit and cash borrowings outstanding represents the total borrowing availability (“Total Availability”). Certain covenants and restrictions, including cash dominion and weekly borrowing base reporting would become effective if Total Availability falls below various thresholds. Weekly borrowing base reporting is triggered if Total Availability is less than the greater of (i) $25,000 and (ii) 12.50% of the aggregate loan commitments. Cash Dominion is triggered if Total Availability is less than the greater of (i) 5.00% of the aggregate loan commitments and (ii) $10,000. We intend to manage our availability to remain above these thresholds, as we choose not to be subject to the cash dominion and weekly reporting covenants. The ABL contains certain negative covenants which limit or restrict the Company's ability to among other things, incur indebtedness and contingent obligations, make investments, intercompany loans and capital contributions, and dispose of property or assets. The ABL also includes customary representations and warranties of the Company, imposes on the Company certain affirmative covenants, and includes other typical provisions. The ABL does not contain any financial covenant tests.

The borrowing base is reported on the 20th day of each fiscal month based on the Company's financial position at the end of the previous month. As of March 30, 2013, based on our February 23, 2013 financial position, we had $50,056 of Total Availability to borrow under our ABL. Our borrowing base calculations are subject to periodic examinations by the financial institutions, which can result in adjustments to the borrowing base and our availability under the ABL.

The interest rate on cash borrowings outstanding under the ABL is either (i) a base rate (the greater of the prime rate, the Federal Funds Rate plus 0.50% and LIBOR plus 1%) or (ii) LIBOR; plus a margin. The applicable margin ranges from 1.25% to 2.00% for base rate borrowings and 2.25% to 3.00% for LIBOR borrowings. The initial applicable margin for the first six months following the effective date for base rate borrowings is 1.75% and for LIBOR borrowings is 2.75%. These margins fluctuate with average availability, and will be reduced by 0.25% if certain EBITDA performance measures are met by the Company. As of March 30, 2013, loans outstanding were $67,000 with a weighted average interest rate of 3.02%.

Term Loan Facility

The Term Loan is guaranteed by all of the Company's material domestic subsidiaries and is secured by a first priority lien on substantially all of the Company's intellectual property, real estate, fixtures, furniture and equipment and capital stock of the Company's subsidiaries, subject to certain exceptions, and a second priority lien on the ABL Collateral. The Term Loan is a five-year term loan which carries interest at LIBOR plus 12.00%. Interest on loans under the Term Loan will be payable monthly in arrears. As of March 30, 2013, the outstanding loan balance was $49,788 with a weighted average interest rate of

10

12.20%. If the Term Loan is prepaid, in whole or in part, prior to the maturity date, there will be a prepayment premium as set forth in the Term Loan Agreement.

The Term Loan contains certain negative covenants which limit or restrict the Company's ability to from among other things, incur indebtedness and contingent obligations, make investments, intercompany loans and capital contributions, and dispose of property or assets, some of which may require incremental prepayment of the principal of the Term Loan without penalty. The Term Loan also includes customary representations and warranties of the Company, imposes on the Company certain affirmative covenants, and includes other typical provisions.

The Term Loan contains several limitations on the aggregate amount that may be borrowed under the ABL. If the outstanding principal amount of the Term Loan exceeds the Term Loan borrowing base calculation set forth in the Term Loan agreement, then an additional availability reserve in the amount of such excess must be taken against the Borrowing Base under the ABL, which will reduce the Total Availability under the ABL. In addition, beginning in December of 2013, an additional availability reserve, ranging from $5,000 to $15,000, can be taken against the ABL Borrowing Base and thus reduce the Total Availability under the ABL if the Company fails to meet certain EBITDA performance measures set forth in the Term Loan agreement.

Under the terms of the ABL and the Term Loan, we are required to comply with certain negative and affirmative covenants, the most significant of which have been described above. The Company was in compliance with all applicable ABL and Term Loan covenants as of March 30, 2013 and anticipates compliance with all covenants for the foreseeable future.

6. LIQUIDITY

The primary items impacting our liquidity in the future are cash from operations, capital expenditures, acquisition of stores, pension funding obligations, sale of surplus assets, and borrowings or payments of debt.

We are focused on effective cash management. However, if we do not have sufficient cash reserves or sufficient cash flow from our operations or if our borrowing capacity under our ABL is insufficient, we may need to raise additional funds through equity or debt financings in the future in order to meet our operating and capital needs. If additional funds were to be needed, we may not be able to secure adequate debt or equity financing on favorable terms, or at all, at the time when we need such funding. In the event that we are unable to raise additional funds, our liquidity will be adversely impacted and our business would suffer. If we are able to secure additional financing, these funds could be costly to secure and maintain, which would significantly impact our earnings and our liquidity.

At March 30, 2013, we had $10,283 of cash and cash equivalents, $116,788 of debt outstanding, and subject to certain provisions as described in Note 5 Long-Term Debt above, Total Availability to borrow up to an additional $50,056 under the ABL. The breach of any of the provisions in the ABL or Term Loan could result in a default and could trigger acceleration of repayment, which would have a significant adverse impact on our liquidity and our business. While we expect to comply with the provisions of the agreements for the foreseeable future, deterioration in the economy and our results could cause us to not be in compliance with our ABL and Term Loan agreements.

7. EMPLOYEE BENEFITS

We sponsor or contribute to retirement plans covering substantially all employees. The expenses related to these plans were as follows:

	Three Months Ended
	March 30, 2013		March 31, 2012
Defined benefit plans	$	1,383	$	1,593
Defined contribution plan (401k plan) — company match	651		706
Other	582		456
	$	2,616	$	2,755

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The components of net periodic pension expense for the Company-sponsored defined benefit plans are as follows:

	Three Months Ended
	March 30, 2013			March 31, 2012
Interest Cost	5,394			6,058
Expected return on plan assets	(6,258		)	(6,268		)
Net amortization and deferral	2,247			1,803
Net periodic pension expense	$	1,383		$	1,593

We currently provide retirement benefits to our domestic employees through a defined contribution plan. Through 2005, domestic employees were covered primarily by noncontributory plans, funded by company contributions to trust funds held for the sole benefit of employees. We amended the defined benefit plans, freezing and ceasing future benefits as of December 31, 2005. Certain transitional benefits were provided to certain participants, but ceased accruing when the plan became inactive on December 31, 2010.

The projected benefit obligation of our qualified defined benefit pension plan exceeded the fair value of plan assets by $191,793 at December 31, 2012, the measurement date. On June 25, 2010, the federal government passed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (“the Pension Relief Act”) which is designed to provide relief from the funding requirements of the Pension Protection Act of 2006. The Pension Relief Act provides opportunities for plan sponsors to extend the time over which plan deficits may be funded, up to 15 years, subject to certain limitations including offsets for excess compensation and extraordinary dividends. On July 6, 2012, the federal government passed the Moving Ahead for Progress in the 21st Century Act (“MAP-21”), which includes provisions designed to provide additional funding relief. MAP-21 allows plan sponsors to extend the period over which average interest rates are calculated, from two years to 25 years, for use in discounting pension liabilities and determining funding requirements. With the benefit of the Pension Relief Act and MAP-21, we have $5,000 in remaining funding requirements for 2013 under the Employee Retirement Income Security Act of 1974 (“ERISA”) as of March 30, 2013.

If the relief provided by the federal government expires or is no longer applicable to our qualified pension plan, or if there is downward pressure on the asset values of the plan, or if the present value of the projected benefit obligation of the plan increases, as would occur in the event of a decrease in the discount rate used to measure the obligation, it would necessitate significantly increased funding of the plan in the future.

8. EARNINGS PER SHARE

Weighted average shares used in the computation of basic and diluted earnings (loss) per common share are as follows:

	Three Months Ended
	March 30, 2013	March 31, 2012
Weighted average shares used for basic earnings (loss) per common share	55,348	55,031
Effect of dilutive stock options and restricted stock	—	149
Weighted average shares used for diluted earnings (loss) per common share	55,348	55,180

For the three months ended March 30, 2013 all potentially dilutive securities are excluded from the calculation of diluted earnings (loss) per share as we generated a net loss for the period. For the period ended March 31, 2012 options to purchase which had an exercise price higher than the market price as of March 31, 2012 and shares of restricted stock for which vesting is contingent upon certain performance conditions which would not have been met had the performance period ended on March 31, 2012 were excluded from the computation because their inclusion would be antidilutive. For the period ended March 30, 2013, securities excluded from the calculation of diluted earnings (loss) per share, because their inclusion would be antidilutive, include options to purchase 2,175 shares at an average price of $7.46 per share and 824 shares of restricted stock. For the period ended March 31, 2012, securities excluded from the calculation of diluted earnings (loss) per share, because their inclusion would be antidilutive, include options to purchase 2,068 shares at an average price of $9.48 per share and 605 shares of restricted stock.

9. INCOME TAXES

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We file income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. With few exceptions, we are no longer subject to United States federal, state and local, or non-U.S. income tax audit examinations by tax authorities for years before 2004. On March 20, 2013, the Company and the IRS Appeals Office reached a settlement of issues raised during the IRS federal income tax audit for calendar years 2005 through 2009.  The impact of the agreement is included in the quarterly financial statements and reflect the settlement of uncertain tax positions related to those tax years. We also have state examinations in progress.

We recognized income tax benefit of $142 and an income tax expense of $510 in the three months ended March 30, 2013 and March 31, 2012, respectively. In all periods, income tax expense includes 1) the effects of a valuation allowance maintained for federal and certain state deferred tax assets including net operating loss carry forwards, 2) expense for jurisdictions where we generated income but do not have net operating loss carry forwards available, 3) expense for certain jurisdictions where the tax liability is determined based on non-income related activities, such as gross sales, and 4) expense related to unrecognized tax benefits.

At March 30, 2013, the deferred tax assets attributable to federal net operating loss carry forwards were $88,797, state net operating loss carry forwards were $32,671, federal tax credit carry forwards were $360, and state tax credit carry forwards were $213. The federal net operating loss carry forwards begin to expire in the year 2028, state net operating loss carry forwards generally start to expire in the year 2021, and tax credit carry forwards are subject to certain limitations. While we have no other limitations on the use of our net operating loss carry forwards, we are potentially subject to limitations if a change in control occurs pursuant to applicable statutory regulations.

We evaluated all significant available positive and negative evidence, including the existence of losses in recent years and our forecast of future taxable income, and, as a result, determined it was more likely than not that our federal and certain state deferred tax assets, including benefits related to net operating loss carry forwards, would not be realized based on the measurement standards required under the FASB Accounting Standard Codification section 740. As such, we maintain a valuation allowance for these deferred tax assets.

10. OTHER LONG-TERM LIABILITIES

Other long-term liabilities includes the non-current portion of closed store lease liabilities, accrued workers compensation, accrued rent associated with leases with escalating payments, liabilities for unrecognized tax benefits, deferred compensation and long-term incentive plans, and various other non-current liabilities.

11. CONTINGENT LIABILITIES

We are involved, from time to time, in litigation and other legal proceedings incidental to our business. Management believes that the outcome of current litigation and legal proceedings will not have a material adverse effect upon our results of operations or financial condition. However, management’s assessment of our current litigation and other legal proceedings could change in light of the discovery of facts with respect to legal actions or other proceedings pending against us not presently known to us or determinations by judges, juries or other finders of fact which are not in accordance with management’s evaluation of the probable liability or outcome of such litigation or proceedings. Reasonably possible losses and amounts reserved for litigation and other legal proceedings are not material to our consolidated financial statements.

We are also involved in various claims relating to environmental matters at a number of current and former plant sites. We engage or participate in remedial and other environmental compliance activities at certain of these sites. At other sites, we have been named as a potentially responsible party under federal and state environmental laws for site remediation. Management analyzes each individual site, considering the number of parties involved, the level of our potential liability or contribution relative to the other parties, the nature and magnitude of the hazardous wastes involved, the method and extent of remediation, the potential insurance coverage, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Based on the above analysis, management believes at the present time that it is not reasonably possible that any claims, penalties or costs incurred in connection with known environmental matters will have a material adverse effect upon our consolidated financial position or results of operations. However, management’s assessment of our current claims could change in light of the discovery of facts with respect to environmental sites, which are not in accordance with management’s evaluation of the probable liability or outcome of such claims.

We are the prime tenant on operating leases that we have subleased to independent furniture dealers. In addition, we guarantee leases which primarily relate to company-branded stores operated by independent furniture dealers. These subleases and guarantees have remaining terms ranging up to five years and generally require us to make lease payments in the event of default by the sublessor or independent party. In the event of default, we have the right to assign or assume the lease with certain restrictions. As of March 30, 2013, the total amounts remaining under lease guarantees were $2,773. Our estimate of probable future losses under these guaranteed leases is not material.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Forward-Looking Statements

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying unaudited consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. The various sections of this MD&A contain a number of forward-looking statements. Words such as “expects,” “goals,” “plans,” “believes,” “continues,” “may,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this and previous filings and particularly in the “Risk Factors” in Part II, Item 1A of this Form 10-Q.

Overview

We are a world leader in designing, manufacturing, sourcing, and retailing home furnishings.  Furniture Brands markets products through a wide range of channels, including its own Thomasville retail stores and through interior designers, multi-line/independent retailers, dealer owned stores and mass merchant stores.  Furniture Brands' portfolio includes some of the best known and most respected brands in the furniture industry, including Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith, La Barge and Creative Interiors.

Through these brands, we offer (i) case goods, consisting of bedroom, dining room, and living room wood furniture, (ii) stationary upholstery products, consisting of sofas, loveseats, sectionals, and chairs, (iii) motion upholstered furniture, consisting of reclining upholstery and sleep sofas, (iv) occasional furniture, consisting of wood, metal and glass tables, accent pieces, home entertainment centers, and home office furniture, and (v) decorative accessories and accent pieces. Our brands are featured in nearly every price and product category in the residential furniture industry.

Each of our brands target specific customers in relation to style and price point.

• Thomasville has both wood furniture and upholstered products in the mid- to upper-price ranges and also offers ready-to-assemble furniture under the Creative Interiors brand name, as well as case goods for the hospitality and contract markets.

• Broyhill offers collections of mid-priced furniture, including both wood furniture and upholstered products, in a wide range of styles and product categories including bedroom, dining room, living room, occasional, home office, and home entertainment.

• Lane focuses primarily on lower and mid-priced upholstered furniture, including motion and stationary furniture with an emphasis on home entertainment and family rooms.

• Drexel Heritage markets both casegoods and upholstered furniture in categories ranging from mid- to premium-priced.

• Henredon specializes in both wood furniture and upholstered products in the premium-price category.

• Pearson offers finely tailored upholstered furniture in the premium-price category.

• Hickory Chair manufactures premium-priced wood and upholstered furniture.

• Lane Venture markets a premium-priced outdoor line of furniture, as well as casual indoor home furnishings.

• Maitland-Smith designs and manufactures premium hand crafted, antique-inspired furniture, accessories, and lighting, utilizing a wide range of unique materials. Maitland-Smith markets under both the Maitland-Smith and LaBarge brand names.

Business Trends and Strategy

Sales decreased 11.3% in the three months ended March 30, 2013 compared to the three months ended March 31, 2012. Based on this comparison, sales for our brands that specialize in premium-priced offerings generally outperformed sales for our brands that focus more on low and mid-priced offerings and sales of upholstery products generally outperformed sales of case goods.

We believe sales continue to be depressed as a result of a volatile furniture retail market. To offset this volatility, we have taken significant steps to improve the business, and we continue to take actions to reduce costs, manage liquidity, and drive profitable sales. We have made numerous cost elimination decisions to enable us to invest in new products and effective marketing as we

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focus on top-line sales for the future. We have consolidated our domestic operations with the closing and selling of excess manufacturing, warehouse, and office properties. We have made investments to expand our manufacturing facilities in Indonesia and develop a new facility in Mexico, both of which we expect will deliver components and finished product at a lower cost than would otherwise be possible. We have reduced our manufacturing costs through the implementation of lean manufacturing methods and through strategic sourcing relationships with suppliers that leverage our scale. Through these actions we have embraced a lean culture that we believe will allow us to compete better in the future. Our entire organization is focused on bringing the best products to the market, increasing top-line sales, fueling efficiency in all of our processes, and strengthening our financial position for the future.

In 2013, we continue to focus on driving distribution for our wholesale brands by leveraging competitively priced, desirable products, in an effort to increase floor space at existing dealers, penetrate new dealers and help us build a presence in new channels. We will also continue to refine our retail business by refreshing the appearance of our stores both inside and out, including updating our accessories and in-store visual displays, and further balancing our media mix in order to optimize advertising to increase traffic. Additionally, we are taking steps to simplify our structure to reduce costs. This includes continued warehouse, plant and freight consolidation and continued consolidation of non-manufacturing facilities, including executing early lease terminations and subleases for dark stores. Further, we continue to ramp up our off-shore manufacturing and mixing facilities as we believe these will enable us to better control our product quality, reduce costs, better service our dealers and provide them with increased flexibility.

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Results of Operations

As an aid to understanding our results of operations on a comparative basis, the following table has been prepared to set forth certain statement of operations and other data for the three months ended March 30, 2013 and March 31, 2012:

Three Months Ended

	March 30, 2013					March 31, 2012
				% of				% of
(in millions, except per share data)	Dollars			Net Sales		Dollars		Net Sales
Net sales	$	254.7		100.0	%	$	287.3	100.0	%
Cost of sales	203.2			79.8		215.8		75.1
Gross profit	51.5			20.2		71.4		24.9
Selling, general, and administrative expenses	69.1			27.1		70.0		24.4
Impairment of assets, net of recoveries	1.4			0.5		—		—
Operating (loss) income	(19.0		)	(7.5	)	1.4		0.5
Interest expense	2.4			1.0		0.8		0.3
Other income, net	0.1			—		0.2		0.1
(Loss) earnings before income tax expense (benefit)	(21.3		)	(8.4	)	0.9		0.3
Income tax (benefit) expense	(0.1		)	(0.1	)	0.5		0.2
Net (loss) earnings	$	(21.2	)	(8.3	)%	$	0.4	0.1	%
Net (loss) earnings per common share — basic and diluted	$	(0.38	)			$	0.01

Three Months Ended March 30, 2013 Compared to Three Months Ended March 31, 2012

Net sales for the three months ended March 30, 2013 were $254.7 million compared to $287.3 million in the three months ended March 31, 2012, a decrease of $32.5 million or 11.3%. The decrease in net sales was primarily the result of continued weak furniture retail conditions.

Gross profit for the three months ended March 30, 2013 was $51.5 million compared to $71.4 million in the three months ended March 31, 2012. The decrease in gross profit was primarily due to a decrease in net sales driven by lower volume and the related deleveraging of fixed manufacturing costs ($12.9 million), charges from inventory write-downs and product rationalization ($2.7 million), increased employee benefit costs ($1.1 million) and increased freight charges ($1.1 million). Gross margin for the three months ended March 30, 2013 decreased to 20.2% compared to 24.9% in the three months ended March 31, 2012, primarily due to the items discussed above.

Selling, general, and administrative expenses decreased to $69.1 million in the three months ended March 30, 2013 compared to $70.0 million in the three months ended March 31, 2012, primarily due to lower compensation expense ($2.1 million), partially offset by an increase in advertising costs ($1.6 million).

Asset impairments, net of recoveries were $1.4 million for the three months ended March 30, 2013 compared to almost no impairment for the three months ended March 31, 2012, and is comprised of impairments to assets held for sale driven by closed properties which had book values in excess of appraised fair market values.

Interest expense was $2.4 million in the three months ended March 30, 2013 compared to $0.8 million in the three months ended March 31, 2012. The increase in interest expense was primarily due to the increased interest rate on higher debt and closing cost amortization related to the previously announced debt refinancing in September 2012.

Net loss per common share was $0.38 for the three months ended March 30, 2013 compared to net earnings per common share of $0.01 for the three months ended March 31, 2012, respectively, on both a basic and diluted basis. Weighted average shares outstanding used in the calculation of net loss per common share on a diluted basis was 55.3 million for the three months ended March 30, 2013 and 55.2 million for the three months ended March 31, 2012.

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Retail Results of Operations

Based on the structure of our operations and management, as well as the similarity of the economic environment in which our significant operations compete, we have only one reportable segment. However, as a supplement to the information required in this Form 10-Q, we have summarized the following results of our company-owned Thomasville Home Furnishings Stores and all other company-owned retail locations:

Thomasville Stores (a) All Other Retail Locations (b)

	Three Months Ended
(Dollars in millions)	March 30, 2013			March 31, 2012			March 30, 2013			March 31, 2012
Net sales	$	26.9		$	27.5		$	8.4		$	8.0
Cost of sales	16.0			15.7			5.8			5.0
Gross profit	10.9			11.8			2.7			3.0
Selling, general and administrative expenses — open stores	16.0			14.9			4.1			3.9
Operating loss — open stores (c)	(5.1		)	(3.1		)	(1.3		)	(0.9		)
Selling, general and administrative expenses — closed stores (d)	—			—			1.3			0.9
Operating loss - retail operations (c)	$	(5.1	)	$	(3.1	)	$	(2.6	)	$	(1.8	)
Number of open stores and showrooms at end of period	49			48			15			16
Number of closed locations at end of period	—			—			20			23
Same-store-sales (e):
Percentage increase/(decrease)	(2		)%	—		%	(f)			(f)
Number of stores	46			44

____________________________

a) This supplemental data includes company-owned Thomasville retail store locations that were open during the three months ended March 30, 2013 and March 31, 2012.

b) This supplemental data includes all company-owned retail locations other than open Thomasville stores (“all other retail locations”).

c) Operating loss does not include our wholesale profit on the above retail net sales.

d) Selling, general and administrative expenses — closed stores includes occupancy costs, lease termination costs, and costs associated with closed store lease liabilities. Closed stores have no net sales, cost of sales, or gross profit.

e) The Thomasville same-store sales percentage is based on sales from stores that have been in operation and company-owned for at least 15 months, including any stores that had been opened for at least 15 months but were closed during the period.

f) Same-store-sales information is not meaningful and is not presented for all other retail locations because results include retail store locations of multiple brands, including five Drexel Heritage stores, one Henredon store, one Broyhill store, and eight designer showrooms at March 30, 2013; and other than designer showrooms, it is not one of our long-term strategic initiatives to grow non-Thomasville brand company-owned retail locations.

In addition to the above company-owned stores, there were 50 Thomasville dealer-owned stores at March 30, 2013.

Financial Condition and Liquidity

Liquidity

Cash and cash equivalents at March 30, 2013 totaled $10.3 million, compared to $11.9 million at December 29, 2012. Net cash used by operating activities totaled $11.4 million in the three months ended March 30, 2013 compared with net cash used by operating activities of $8.6 million in the three months ended March 31, 2012. The decrease in cash flow from operations in the three months ended March 30, 2013 compared to the three months ended March 31, 2012 was primarily driven by a higher net

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loss for the period, a decrease in accounts payable and increased pension funding, largely offset by a decrease in accounts receivable and inventory. Net cash used in investing activities for the three months ended March 30, 2013 totaled $1.8 million compared with $1.4 million in the three months ended March 31, 2012. The increase in cash used in investing activities is the result of slightly higher additions to property, plant, equipment, and software during the first quarter of 2013. Cash provided by financing activities in the three months ended March 30, 2013 was $11.6 million compared with nearly no cash provided by financing activities in the three months ended March 31, 2012. Cash used in financing activities for the three months ended March 30, 2013 included payments of debt of $8.0 million, and debt issuance costs of $0.2 million, which were more than offset by new borrowings against our asset-based credit facility ("ABL") of $20.0 million. Working capital was $215.7 million at March 30, 2013 compared to $220.9 million at December 29, 2012. We continue to manage our working capital to maximize liquidity and minimize borrowings under our ABL. However, as noted above, our total debt increased by $11.8 million during the first quarter of 2013. These additional borrowings were utilized to fund operations and working capital. Our efforts to maximize liquidity and reduce borrowing include actions to manage inventories to meet current demand, reduce expenses and capital expenditures, and extend payments to third parties through delayed payments and in some cases, negotiated new terms. The decrease in accounts payable since the beginning of 2013 is primarily due to a decrease in delayed payments.

The primary items impacting our liquidity in the future are cash from operations, capital expenditures, acquisition of stores, pension funding obligations, sale of surplus assets, borrowings or payments of debt and availability under our ABL (see the Financing Arrangements section below for details on our ABL). We believe our liquidity will be sufficient to support our operations for the foreseeable future. However, if we do not have sufficient cash reserves or sufficient cash flow from our operations or if our borrowing capacity under our ABL is insufficient, we may need to raise additional funds through equity or debt financings in the future in order to meet our operating and capital needs. If additional funds were to be needed, we may not be able to secure adequate debt or equity financing on favorable terms, or at all, at the time when we need such funding. In the event that we are unable to raise additional funds, our liquidity will be adversely impacted and our business would suffer. If we are able to secure additional financing, these funds could be costly to secure and maintain, which would significantly impact our earnings and our liquidity.

At March 30, 2013, we had $10.3 million of cash and cash equivalents and $116.8 million of debt outstanding, and subject to certain provisions as described in "Financing Arrangements" below, Total Availability to borrow up to an additional $50.1 million under the ABL. The breach of any of the provisions in the ABL or term loan could result in a default and could trigger acceleration of repayment, which would have a significant adverse impact on our liquidity and our business. While we expect to comply with the provisions of these agreements for the foreseeable future, deterioration in the economy and our results could cause us to not be in compliance with our ABL and term loan agreements.

Financing Arrangements

Long-term debt consists of the following (in millions):

	March 30, 2013		December 29, 2012
Term Loan	$	49.8	$	50.0
Asset-based loan	67.0		55.0
Less: current maturities	—		—
Long-term debt	$	116.8	$	105.0

On September 25, 2012, we refinanced our existing asset-based credit facility by entering into a new five-year asset based credit facility (the “ABL”) with a group of financial institutions and a new five-year Term Loan Agreement (the “Term Loan”) in order to provide financial flexibility and increase our borrowing availability. The new ABL is a revolving facility with a commitment of $200.0 million subject to a borrowing base of certain eligible accounts receivable and inventory. The ABL also includes an accordion feature that will allow us to increase the ABL by up to $50.0 million subject to securing additional commitments from the lenders. The Term Loan is a $50.0 million secured facility. Capitalized fees incurred for both of these facilities totals $8.7 million.

Asset-Based Revolving Credit Facility

The ABL provides for the issuance of letters of credit and cash borrowings, and is secured by a first priority lien on our accounts receivable, inventory, cash deposit and securities accounts and certain related assets (the “ABL Collateral”), and a second priority lien on the Term Loan priority collateral described below. The issuance of letters of credit and cash borrowings are limited by the level of a borrowing base consisting of eligible accounts receivable and inventory, less a $25.0 million availability block and certain reserves set forth in the ABL agreement (the “Borrowing Base”). The amount of the Borrowing Base above the current level of letters of credit and cash borrowings outstanding represents the total borrowing availability (“Total Availability”). Certain covenants and restrictions, including cash dominion and weekly borrowing base reporting would

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become effective if Total Availability falls below various thresholds. Weekly borrowing base reporting is triggered if Total Availability is less than the greater of (i) $25.0 million and (ii) 12.50% of the aggregate loan commitments. Cash Dominion is triggered if Total Availability is less than the greater of (i) 5.00% of the aggregate loan commitments and (ii) $10.0 million. We intend to manage our availability to remain above these thresholds, as we choose not to be subject to the cash dominion and weekly reporting covenants. The ABL contains certain negative covenants which limit or restrict our ability to among other things, incur indebtedness and contingent obligations, make investments, intercompany loans and capital contributions, and dispose of property or assets. The ABL also includes customary representations and warranties , imposes certain affirmative covenants on us, and includes other typical provisions. The ABL does not contain any financial covenant tests.

The borrowing base is reported on the 20th day of each fiscal month based on our financial position at the end of the previous month. As of March 30, 2013, based on our February 23, 2013 financial position, we had $50.1 million of Total Availability to borrow under our ABL. Our borrowing base calculations are subject to periodic examinations by the financial institutions, which can result in adjustments to the borrowing base and our availability under the ABL.

The interest rate on cash borrowings outstanding under the ABL is either (i) a base rate (the greater of the prime rate, the Federal Funds Rate plus 0.50% and LIBOR plus 1.00%) or (ii) LIBOR; plus a margin. The applicable margin ranges from 1.25% to 2.00% for base rate borrowings and 2.25% to 3.00% for LIBOR borrowings. The initial applicable margin for the first six months following the effective date for base rate borrowings is 1.75% and for LIBOR borrowings is 2.75%. These margins fluctuate with average availability, and will be reduced by 0.25% if certain EBITDA performance measures are met by the Company. As of March 30, 2013, loans outstanding were $67.0 million with a weighted average interest rate of 3.02%.

Term Loan Facility

The Term Loan is secured by a first priority lien on substantially all of our intellectual property, real estate, fixtures, furniture and equipment and capital stock of our subsidiaries, subject to certain exceptions, and a second priority lien on the ABL Collateral. The Term Loan is a five-year term loan which carries interest at LIBOR plus 12.00%. Interest on loans under the Term Loan will be payable monthly in arrears. As of March 30, 2013, the outstanding loan balance was $49.8 million with a weighted average interest rate of 12.20%. If the Term Loan is prepaid, in whole or in part, prior to the maturity date, there will be a prepayment premium as set forth in the Term Loan Agreement.

The Term Loan contains certain negative covenants which limit or restrict our ability to from among other things, incur indebtedness and contingent obligations, make investments, intercompany loans and capital contributions, and dispose of property or assets. The Term Loan also includes customary representations and warranties, imposes certain affirmative covenants on us, and includes other typical provisions.

The Term Loan contains several limitations on the aggregate amount that may be borrowed under the ABL. If the outstanding principal amount of the Term Loan exceeds the Term Loan borrowing base calculation set forth in the Term Loan agreement, then an additional availability reserve in the amount of such excess must be taken against the Borrowing Base under the ABL, which will reduce the Total Availability under the ABL. In addition, beginning in December of 2013, an additional availability reserve, ranging from $5.0 million to $15.0 million can be taken against the ABL Borrowing Base and thus reduce the Total Availability under the ABL if we fail to meet certain EBITDA performance measures set forth in the Term Loan agreement.

Under the terms of the ABL and the Term Loan, we are required to comply with certain negative and affirmative covenants, the most significant of which have been described above. We were in compliance with all applicable ABL and Term Loan covenants as of March 30, 2013 and anticipate compliance with all covenants for the foreseeable future.

Funded Status of Qualified Defined Benefit Pension Plan

The projected benefit obligation of our qualified defined benefit pension plan exceeded the fair value of plan assets by $191.8 million at December 31, 2012, the measurement date. The projected benefit obligation calculations are dependent on various assumptions, including discount rate. The discount rate is selected based on yields of high quality bonds (rated Aa by Moody’s as of the measurement date) with cash flows matching the timing and amount of expected future benefit payments. We believe the assumptions to be reasonable; however, differences in assumptions would impact the calculated obligation. Additionally, changes in the yields of the underlying financial instruments from which the assumptions are derived may significantly impact the calculated obligation at future measurement dates. For example, at our December 31, 2012 measurement date, we used a discount rate of 5.00% to measure the projected benefit obligation. If we had used a discount rate of 5.25% or 4.75%, the projected benefit obligation and underfunded status of our pension plan would have decreased or increased by approximately $14.0 million, respectively.

On June 25, 2010, the federal government passed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (“the Pension Relief Act”) which is designed to provide relief from the funding requirements of the Pension Protection Act of 2006. The Pension Relief Act provides opportunities for plan sponsors to extend the time over which plan deficits may be

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funded, up to 15 years, subject to certain limitations including offsets for excess compensation and extraordinary dividends. On July 6, 2012, the federal government passed the Moving Ahead for Progress in the 21st Century Act (“MAP-21”), which includes provisions designed to provide additional funding relief. MAP-21 allows plan sponsors to extend the period over which average interest rates are calculated, from two years to 25 years, for use in discounting pension liabilities and determining funding requirements. With the benefit of the Pension Relief Act and MAP-21, we have $5.0 million in remaining pension funding requirements for 2013 under the Employee Retirement Income Security Act of 1974 as of March 30, 2013.

If the relief provided by the federal government expires or is no longer applicable to our qualified pension plan, if there is downward pressure on the asset values of the plan, or if the present value of the projected benefit obligation of the plan increases, as would occur in the event of a decrease in the discount rate used to measure the obligation, it would necessitate significantly increased funding of the plan in the future.

Contractual Obligations and Other Commitments

Off-Balance Sheet Arrangements

We are the prime tenant on operating leases that we have subleased to independent furniture dealers. In addition, we guarantee leases which primarily relate to company-branded stores operated by independent furniture dealers. These subleases and guarantees have remaining terms ranging up to five years and generally require us to make lease payments in the event of default by the sublessor or independent party. In the event of default, we have the right to assign or assume the lease with certain restrictions. As of March 30, 2013, the total amounts remaining under lease guarantees were $2.8 million. Our estimate of probable future losses under these guaranteed leases is not material.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon the Consolidated Financial Statements and Notes to the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates, judgments, and assumptions, which we believe to be reasonable, based on the information available. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The consolidated financial statements consist of the accounts of our company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

We have chosen accounting policies we believe are appropriate to accurately and fairly report our operating results and financial position, and we apply those accounting policies in a consistent manner. Accounting policies we consider most critical are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 29, 2012.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

We have exposure to market risk from changes in interest rates. Our exposure to interest rate risk consists of interest expense on our asset-based loan, term loan and interest income on our cash equivalents. A 10% increase on variable interest rates would result in additional interest expense of $0.2 million annually. We have no derivative financial instruments at March 30, 2013.

Item 4.Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such terms are defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), as of March 30, 2013, the end of the period covered by this Quarterly Report on Form 10-Q.

Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures were effective as of March 30, 2013.

b) Changes in Internal Control over Financial Reporting

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There have not been any changes in our internal control over financial reporting during the quarter ended March 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

Item 1.Legal Proceedings

For a discussion of legal proceedings, refer to Part I, Note 11 to the Consolidated Financial Statements in this Form 10-Q, which is incorporated herein by reference.

Item 1A.Risk Factors

We describe the risk factors associated with our business below. This description includes any material changes to and supersedes the description of the risk factors associated with our business previously disclosed in Part I, Item 1A of our Annual Report onForm 10-Kfor the year ended December 29, 2012. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial also may become important factors that affect our company. You should carefully consider the risks described below in addition to all other information provided to you in this document, in our Annual Report onForm 10-Kfor the year ended December 29, 2012, and in our subsequent filings with the Securities and Exchange Commission. Any of the following risks could materially and adversely affect our business, results of operations, and financial condition.

Unfavorable economic conditions could result in a decrease in our future sales, earnings, and liquidity.

Our operations and performance depend significantly on economic conditions, particularly in the United States, and their impact on levels of existing home sales, new home construction, consumer confidence, and consumer discretionary spending. Economic conditions deteriorated significantly in the United States and worldwide in recent years. Although the general economy has begun to recover, sales of residential furniture remain depressed due to wavering consumer confidence and a number of ongoing factors in the global economy that have negatively impacted consumers’ discretionary spending. These ongoing factors include lower home values, prolonged foreclosure activity throughout the country, a weak market for home sales, continued high levels of unemployment, and reduced access to consumer credit. These factors are outside of our control, but have a direct impact on our sales. These conditions have resulted in a decline in our sales, earnings and liquidity and could continue to impact our sales, earnings and liquidity in the future. The general level of consumer spending is also affected by a number of factors, including, among others, general economic conditions and inflation, which are generally beyond our control. Unfavorable economic conditions impact retailers, our primary customers, potentially resulting in the inability of our customers to pay amounts owed to us. In addition, if our customers are unable to sell our products or are unable to access credit, they may experience financial difficulties leading to bankruptcies, liquidations, and other unfavorable events. If any of these events occur, or if unfavorable economic conditions continue to challenge the consumer environment, our future sales, earnings, and liquidity would likely be adversely impacted.

A variety of factors including market returns and lower interest rates could significantly increase our funding obligations for our qualified pension plan, which would negatively impact our liquidity.

Our funding obligations for our qualified pension plan depend on the performance of assets held in the pension plan, changes in the discount rate used to measure the benefit obligation, and changes in government regulations applicable to our pension plan. The projected benefit obligation of our qualified defined benefit plan exceeded the fair value of plan assets by $191.8 million at December 31, 2012. A decrease in the fair value of plan assets, or a decrease in interest rates with a corresponding decrease in the discount rate used to measure the benefit obligation could significantly increase our funding obligation. Financial markets have experienced extreme volatility in recent years. As a result of this volatility in the domestic and international equity and bond markets, the asset values of our pension plans and the discount rate used to measure the benefit obligation have fluctuated significantly. Further disruptions in the financial markets could adversely impact our funding obligations in the future. In addition, the federal government has passed pension funding relief legislation which extended the time over which plan deficits may be funded and changed the method for calculating the discount rate. If the relief provided by the federal government expires or is no longer applicable to our qualified pension plan, if there is downward pressure on the asset value of the plan, or if the present value of the benefit obligation of the plan increases, as would occur in the event of a decrease in the discount rate used to measure the obligation, significantly increased funding of the plan in the future could be required, which would negatively impact our liquidity.

Loss of market share and other financial or operational difficulties due to competition would likely result in a decrease in our sales, earnings, and liquidity.

The residential furniture industry is highly competitive and fragmented. We compete with many other manufacturers and retailers, some of which offer widely advertised, well-known, branded products, and others are large retail furniture dealers who offer their own store-branded products. Competition in the residential furniture industry is based on the pricing of products, quality of products, style of products, perceived value, service to the customer, promotional activities, and advertising. It is difficult for us to predict the timing and scale of our competitors’ actions in these areas. The highly competitive nature of the industry means we are constantly subject to the risk of losing market share, which would likely decrease our future sales, earnings and liquidity. In addition, due to competition, we may not be able to maintain or raise the prices of our products in response to inflationary pressures such as

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increasing costs. Also, due to the large number of competitors and their wide range of product offerings, we may not be able to differentiate our products (through styling, finish, and other construction techniques) from those of our competitors. These and other competitive pressures would likely result in a decrease in our sales, earnings, and liquidity.

Our failure to accurately estimate demand for our products could adversely affect our business and financial results.

We may not correctly estimate demand for our products.  Our ability to estimate demand for our products is imprecise, particularly for new products.  If we materially underestimate demand for our products, we might not be able to satisfy demand on a short-term basis.  If we materially overestimate demand for our products, our inventory levels will be higher than necessary and we may need to discount our products to sell off the excess inventory.  Such issues with demand planning, could have a material adverse effect on our business and financial results, which would negatively impact our liquidity.

A change in our mix of product sales could result in a decrease in our future earnings and liquidity.

Our products are sold at varying price points and levels of profit. An increase in the sales of our lower profit products at the expense of the sales of our higher profit products could result in a decrease in our gross margin, earnings, and liquidity.

Business failures of large dealers, a group of customers or our own retail stores could result in a decrease in our future sales, earnings, and liquidity.

Our business practice has been to extend payment terms to our customers when selling furniture. As a result, we have a substantial amount of receivables we manage daily. Although we have no customers who individually represent 10% or more of our total annual sales, the business failures of a large customer or a group of customers could require us to incur bad debt expense, which would decrease earnings, as it has in past periods. Receivables collection can be significantly impacted by economic conditions. Therefore, deterioration in the economy, or a lack of economic recovery, could cause further business failures of our customers, which could in turn result in additional bad debt expense thereby lowering earnings and liquidity. These business failures can also cause loss of future sales. In addition, we are either prime tenant on or guarantor of many leases of company-branded stores operated by independent furniture dealers. The viability of these dealer stores are also highly influenced by economic conditions. Defaults by any of these dealers would result in our becoming responsible for payments under these leases. If we were to decide not to operate these stores, we would still be required to pay store occupancy costs, which would result in a reduction in our future sales, earnings and liquidity.

Inventory write-downs or write-offs could result in a decrease in our earnings.

Our inventory is valued at the lower of cost or market. However, future sales of inventory are dependent on economic conditions, among other things. In addition, our ability to forecast demand will impact whether inventory can be sold at the anticipated price point. Weak economic and retail conditions could cause us to reduce the selling price of our furniture in order for us to sell our product, which would result in a lowering of inventory values. In addition, if we materially overestimate demand for our products, our inventory levels will be higher than necessary and we may need to lower the cost of our products to sell off the excess inventory. Inventory write-downs could have a material adverse effect on our business and financial results, which would negatively impact our liquidity.

Sales distribution realignments can result in a decrease in our sales, earnings and liquidity.

We continually review relationships with our wholesale customers to ensure each meets our standards. These standards cover, among others, creditworthiness, market penetration, sales growth, competitive improvements, and sound, ethical business practices. If customers do not meet our standards, we will consider discontinuing these business relationships. If we discontinue a relationship, there would likely be a decrease in near-term sales, earnings, and liquidity and possibly long-term sales, earnings and liquidity if we are unable to replace such customers.

Manufacturing realignments, cost savings programs, and strategic initiatives could result in a decrease in our near-term earnings and liquidity.

We continually review our manufacturing operations and offshore sourcing capabilities. Effects of periodic manufacturing realignments and cost savings programs would likely result in a decrease in our near-term earnings and liquidity until the expected cost reductions are achieved. Such programs can include the consolidation and integration of facilities, functions, systems, and procedures. Certain products may also be shifted from domestic manufacturing to offshore manufacturing or sourcing, and vice versa. These realignments have, and would likely in the future, result in substantial capital expenditures and costs including, among others, severance, impairment, exit, and disposal costs. Such actions, including the execution of our strategic initiatives, may not be accomplished as quickly as anticipated and the expected cost reductions may not be achieved in full, both of which have, and could in the future, result in a decrease in our near-term earnings and negatively impact liquidity.

Reliance on offshore sourcing of our products subjects us to government regulations and currency fluctuations which could result in a decrease in our earnings and liquidity.

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We have offshore capabilities that provide flexibility in product programs and pricing to meet competitive pressures. Risks inherent in conducting business internationally include, among others, fluctuations in foreign-currency exchange rates, changes to and compliance with government regulations and policies, including those related to duties, tariffs, and trade barriers, investments, taxation, exchange controls, repatriation of earnings, and changes in local political or economic conditions, all of which could increase our costs and decrease our earnings and liquidity.

Our operations depend on production facilities located outside the United States which are subject to increased risks of disrupted production which could cause delays in shipments, loss of customers, and decreases in sales, earnings, and liquidity.

We have placed production in emerging markets to capitalize on market opportunities and to minimize our costs. Our international production operations could be disrupted by a natural disaster, labor strike, war, political unrest, terrorist activity, or public health concerns, particularly in emerging countries that are not well-equipped to handle such occurrences. Our production abroad may also be more susceptible to changes in laws and policies in host countries and economic and political upheaval than our domestic production. Any such disruption could cause delays in shipments of products, loss of customers, and decreases in sales, earnings and liquidity.

Fluctuations in the price, availability, or quality of raw materials or sourced product could cause delays in production and product delivery, could increase the costs of materials, and could result in a decrease in our sales, earnings, and liquidity.

We use various types of wood, fabrics, leathers, glass, upholstered filling material, steel, and other raw materials in manufacturing furniture. We also source products from independent manufacturers. Our suppliers could choose to discontinue business with us or could change the terms under which they are willing to do business, such as price, minimum quantities, required lead times, or payment terms. Fluctuations in the price, availability, or quality of the raw materials we use in manufacturing or products we source could have a negative effect on our cost of sales and our ability to meet the demands of our customers. In the event of a significant disruption in our supply of raw materials or sourced product, we may not be able to locate alternative sources at an acceptable price or in a timely manner. Inability to meet the demands of our customers could result in the loss of future sales. In addition, if the price of raw materials increases we may not be able to pass along to our customers all or a portion of our higher costs due to competitive and market pressures, which could decrease our earnings and liquidity. Also, if payment terms with our suppliers and vendors shorten, it could adversely impact our liquidity.

We are subject to litigation, environmental regulations, and governmental matters that could adversely impact our sales, earnings, and liquidity.

We are, and may in the future be, a party to legal proceedings and claims, including, but not limited to, those involving product liability, business matters, government regulatory and trade compliance matters, and environmental matters, some of which claim significant damages. We face the business risk of exposure to product liability claims in the event that the use of any of our products results in personal injury or property damage. In the event any of our products prove to be defective, we may be required to recall or redesign such products. We maintain insurance against product liability claims, but there can be no assurance such coverage will continue to be available on terms acceptable to us or such coverage will be adequate to cover exposures. We also are, and may in the future be, a party to legal proceedings and claims arising out of certain customer or dealer terminations as we continue to re-examine and realign our retail distribution strategy. Given the inherent uncertainty of litigation, these matters could have a material adverse impact on our sales, earnings, and liquidity. We are also subject to various laws and regulations relating to environmental protection and we could incur substantial costs as a result of the noncompliance with or liability for cleanup or other costs or damages under environmental laws. All of these matters could cause a decrease in our sales, earnings, and liquidity.

We may not realize the anticipated benefits of mergers, acquisitions, or dispositions.

As part of our business strategy, we may merge with or acquire businesses and divest assets and operations. Risks commonly encountered in mergers and acquisitions include the possibility that we pay more than the acquired company or assets are worth, the difficulty of assimilating the operations and personnel of the acquired business, the potential disruption of our ongoing business, and the distraction of our management from ongoing business. Consideration paid for future acquisitions could be in the form of cash or stock or a combination thereof, which could result in dilution to existing shareholders and to earnings per share. We may also evaluate the potential disposition of assets and operations that may no longer help us meet our objectives. When we decide to sell assets or operations, we may encounter difficulty in finding buyers or alternate exit strategies on acceptable terms in a timely manner. In addition, we may dispose of assets at a price or on terms that are less than we had anticipated.

We could be delisted from the New York Stock Exchange, which would have an impact on our stockholders' ability to sell their shares of stock.

There is no guarantee that an active trading market for our common stock will be maintained on the New York Stock Exchange. The New York Stock Exchange may delist our stock if we fail to meet its continued listing requirements, including its requirement of maintaining a minimum average closing price of $1.00 per share over a consecutive 30-trading-day period.  On December 18, 2012, we received a notice from the New York Stock Exchange that the average price of our common stock had traded below a consecutive 30-trading-day average of $1.00 per share. As a result, we were required to bring our average closing price above

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$1.00 within the longer of six months from receipt of the notification or our next annual meeting of shareholders if a shareholders' action was proposed.  We were subsequently notified by the New York Stock Exchange that we regained compliance with this requirement on February 5, 2013.  However, there is no guarantee that we will not receive another notice from the New York Stock Exchange and that we will be able to regain compliance if we receive such notice. If we are unable to regain compliance, we may be delisted. If trading in our stock is less active, stockholders may not be able to sell their shares quickly or at the latest market price.

We may effect a reverse stock split to avoid our common stock being delisted from the New York Stock Exchange, which could be viewed negatively and could lead to a decrease in our overall market capitalization.

We may effect a reverse stock split in order to avoid being delisted from the New York Stock Exchange. However, while we expect that the resulting reduction in our outstanding shares of common stock will increase the market price of our common stock, we cannot be assured that the reverse stock split will increase the market price of our common stock by a multiple equal to the number of pre-split shares in the reverse split ratio, or result in any permanent increase in the market price. In some cases the stock price of companies that have effected reverse stock splits has subsequently declined. A reverse stock split is often viewed negatively by the market and, consequently, could lead to a decrease in our overall market capitalization.

Loss of key personnel or the inability to hire qualified personnel could adversely affect our business.

Our success depends, in part, on our ability to retain our key personnel, including our executive officers and senior management team. The unexpected loss of one or more of our key employees could adversely affect our business. Our success also depends, in part, on our continuing ability to retain the appropriate level of personnel and to identify, hire, train, and retain highly qualified personnel. Competition for employees can be intense. We may not be able to attract or retain qualified personnel in the future, and our failure to do so could adversely affect our business.

Impairment of our trade name intangible assets would result in a decrease in our earnings and net worth.

Our trade names are tested for impairment annually or whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Trade names are tested by comparing the carrying value and fair value of each trade name to determine the amount, if any, of impairment. The fair value of our trade names is estimated using a “relief from royalty payments” methodology, which is highly contingent upon assumed sales trends and projections, royalty rates, and a discount rate. Lower sales trends, decreases in projected net sales, decreases in royalty rates, or increases in the discount rate would cause impairment charges and a corresponding reduction in our earnings and net worth, as it has in past periods.

Provisions in our certificate of incorporation and our shareholders’ rights plan could discourage a takeover and could result in a decrease in the value of our common stock.

Certain provisions of our certificate of incorporation and shareholders’ rights plan could make it more difficult for a third party to acquire control of us, even if such change in control would be beneficial to our shareholders. Our certificate of incorporation contains provisions that may make the acquisition of control by a third party without the approval of our board of directors more difficult, including provisions relating to the issuance of stock without shareholder approval. In addition, we have also adopted a dual-trigger shareholders’ rights plan designed to deter shareholders from acquiring shares of stock in excess of 4.75% in order to reduce the risk of limitation of use of our net operating loss carry forwards under Section 382 of the Internal Revenue Code, and to protect our stockholders against potential acquirers who may pursue coercive or unfair tactics aimed at gaining control of the Company without paying all stockholders a full and fair price. These provisions may have unintended anti-takeover effects and may delay or prevent a change in control, which could result in a decrease of the price of our common stock.

A change in control could limit the use of our net operating loss carry forwards and decrease a potential acquirer’s valuation of our businesses, both of which could decrease our liquidity and earnings.

If a change in control occurs pursuant to applicable statutory regulations, we are potentially subject to limitations on the use of our net operating loss carry forwards which in turn could adversely impact our future liquidity and profitability. A change in control could also decrease a potential acquirer’s valuation of our businesses and discourage a potential acquirer from purchasing our businesses.

If we and our dealers are not able to open new stores or effectively manage the growth of these stores, our ability to grow sales and our profitability and liquidity could be adversely affected.

We have in the past and may continue in the future to open new stores or purchase or otherwise assume operation of branded stores from independent dealers. Increased demands on our operational, managerial, and administrative resources could cause us to operate our business, including our existing and new stores, less effectively, which in turn could cause deterioration in our profitability. If we and our dealers are not able to identify and open new stores in desirable locations and operate stores profitably, including the growth of same store sales, it could adversely impact our ability to grow sales and our profitability and liquidity could be adversely affected.

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We may not be able to comply with our financing arrangements or secure additional financing on favorable terms, or generate sufficient profit to meet our future operating and capital needs, which could have a significant adverse impact on our liquidity and our business.

Our availability to borrow is dependent on certain provisions of our debt agreements, including those described in Part I, Note 6 to the Consolidated Financial Statements in this Form 10-Q. The breach of any of these provisions could result in a default under our debt agreements and could trigger acceleration of repayment, which would have a significant adverse impact to our liquidity and our business. While we would attempt to obtain waivers for noncompliance, we may not be able to obtain waivers, which would have a significant adverse impact on our liquidity and our business. Also, our availability to borrow is dependent on our borrowing base calculations. Our borrowing base calculations are subject to periodic examinations by our lenders which could result in unfavorable adjustments to the borrowing base and our availability to borrow. We also intend to maintain our availability at levels which will not subject us to weekly borrowing base reporting or cash dominion. However, increases in our outstanding borrowings or decreases in the borrowing base, or a combination of both, may subject us to weekly borrowing base reporting and cash dominion requirements. In addition, if we do not obtain certain EBITDA targets for 2013 we would be subject to additional reserves against our revolving credit facility, reducing our availability. Furthermore, we maintain certain payment terms with our suppliers and vendors. In certain instances, we have deferred payments beyond the stated payment terms. If the payment terms with our suppliers and vendors decrease or if we are unable to continue to defer payments to certain suppliers, it could adversely impact our liquidity.

The Company incurred a net loss of $21.2 million in the first quarter of 2013 and a net loss of $47.3 million and $43.8 million in fiscal years 2012 and 2011, respectively and operations did not generate cash flows in these time peiods. Furthermore the Company incurred . A continued trend of operating losses and lack of cash flow generation would have an adverse effect on our financial condition and liquidity. If we do not have sufficient cash reserves, cash flow from our operations, supplier or vendor payment terms, or borrowing capacity, we may need to raise additional funds through equity or debt financings in the future in order to meet our operating and capital needs. Nevertheless, we may not be able to secure adequate debt or equity financing on favorable terms, or at all, at the time when we need such funding. In the event that we are unable to raise additional funds, our liquidity will be adversely impacted and our business would suffer. If we are able to secure additional financing, these funds could be costly to secure and maintain, which could significantly impact our earnings and our liquidity. Also, if we raise additional funds or settle liabilities through issuances of equity or convertible securities, our existing shareholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. In addition, any debt financing that we may secure in the future could have restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Any material disruption of our information systems could disrupt our business and adversely impact our financial condition.

We may be subject to information technology system failures, network disruptions and cybersecurity concerns. These may be caused by natural disasters, accidents, power disruptions, telecommunications failures, viruses, cyber incidents, or similar events or disruptions. System redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions could prevent retail store transactions, compromise our data or customer data, result in delays in the manufacturing and shipping of our products to customers or lost sales. System failures and disruptions could also impede transaction processing and financial reporting.

We must successfully maintain and/or upgrade our information technology systems.

We rely on various information technology systems to manage our operations. We are currently in the process of implementing new systems to replace and/or consolidate our legacy systems. The timing of the implementation may be impacted by a variety of factors, including availability of funds. During the implementation and upgrade, we may be subject to certain risks associated with replacing and changing these systems, including impairment of our ability to fulfill customer orders, potential disruption of the internal control structure, substantial capital expenditures, demands on management time and other risks of delays or difficulties in transitioning to new and different systems. Any information technology system disruptions, if not anticipated and appropriately mitigated, could have a negative impact on our sales and earnings.

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Item 2.Unregistered Sale of Equity Securities and Use of Proceeds

During the quarter ended March 30, 2013 there were no purchases by us of equity securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended, other than shares withheld to cover withholding taxes upon the vesting of restricted stock awards as follows:

	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs.
Jan 2013: Dec 30, 2012 through Jan 26, 2013	—	$	—	(2)	(2)
Feb 2013: Jan 27, 2013 through Feb 23, 2013	19,998	1.46		(2)	(2)
Mar 2013: Feb 25, 2013 through March 30, 2013	—	—		(2)	(2)
Total	19,998	$	1.46

_______________________________

(1) Shares valued at the average of the high and low prices of common stock as reported by the New York Stock Exchange on the vesting date.

(2) We did not have any publicly announced plan or program to repurchase equity securities during the quarter ended March 30, 2013.

Item 6.Exhibits

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		Filed
		with
Exhibit		the	Incorporated by Reference
Index		Form		Filing Date	Exhibit
No.	Exhibit Description	10-Q	Form	with the SEC	No.
3.1	Restated Certificate of Incorporation of the Company, as amended		10-Q	May 14, 2002	3
3.2	By-Laws of the Company, as amended effective as of February 7, 2013		10-K	March 6, 2013	3.1
3.3	Certificate of Designation of Series B Junior Participating Preferred Stock		8-K	August 4, 2009	3.1
4.1	Amended and Restated Stockholders Rights Agreement, dated as of June 18, 2012, between the Company and American Stock Transfer and Trust Company, LLC, as Rights Agent		8-K	June 19, 2012	4.1
10.1	Amended and Restated Executive Employment Agreement dated March 26, 2013, by and between the Company and Ralph Scozzafava		8-K	March 28, 2013	10.1
31.1	Certification of Chief Executive Officer of the Company, Pursuant to Rule 13a-14(a)/15d-14(a)	X
31.2	Certification of Chief Financial Officer (Principal Financial Officer) of the Company, Pursuant to Rule 13a-14(a)/15d-14(a)	X
32.1	Certification of Chief Executive Officer of the Company, Pursuant to 18 U.S.C. Section 1350	X
32.2	Certification of Chief Financial Officer (Principal Financial Officer) of the Company, Pursuant to 18 U.S.C. Section 1350	X
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Furniture Brands International, Inc.
(Registrant)
By:	/s/ Vance C. Johnston
	Vance C. Johnston
	Chief Financial Officer (On behalf of the registrant and as Principal Financial Officer)
	Date:	May 3, 2013

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