INFORMATION
101 South Hanley Road
St. Louis, Missouri 63105
314-863-1100
FOR IMMEDIATE RELEASE
FURNITURE BRANDS INTERNATIONAL COMMENTS ON OUTLOOK
FOR FIRST QUARTER AND FULL YEAR 2001
St. Louis, Missouri, February 23, 2001 - Furniture Brands International (NYSE:
FBN) announced today it expects first quarter 2001 sales to be down in the high
single digits from first quarter last year, and first quarter earnings per share
from operations to be in the $0.40 to $0.45 range, compared to $0.61 last year.
W.G. (Mickey) Holliman, Chairman, President and Chief Executive Officer, said,
"We have just completed routine on-site reviews at each of our operating
companies. Additionally, we have six investor conferences scheduled over the
next five weeks. In anticipation of those presentations, it is appropriate for
us to issue the previously announced update on our operating results and current
expectations."
"In January, we warned that our order trends reflected a continuation and even a
deepening of the soft business environment. Since then those trends have
continued across each of our operating companies and all product lines,
especially in our case goods businesses. We now believe this soft environment
has not yet bottomed out and will continue through the first half of 2001.
Because we are up against very strong results in the first half of 2000, this
will make for difficult year-over-year comparisons."
Mr. Holliman continued, "Our strategic emphasis on our higher margin import
business is negatively impacting capacity utilization in our domestic
manufacturing facilities and creating overall margin pressures. To address this
we are permanently shutting down and/or consolidating manufacturing operations
at several of our domestic facilities, which will eliminate over 500,000 square
feet of manufacturing capacity and reduce our workforce by approximately 1,000
employees. These actions will result in increased manufacturing efficiencies and
improved margin performance."
"Cash flow continues to be favorable, a validation of our often-stated view that
slower business conditions will bring increased cash generation. As we approach
our targeted 40% debt to book capitalization ratio, we can safely say debt is no
longer an issue for our company. We look forward to the flexibility our strong
cash flow will give us as we consider future strategic alternatives."
"The unsettled business environment makes it difficult to forecast results for
the full year 2001," Mr. Holliman continued. "At this point, we foresee a
turn-around in the second half of the year, but we are not certain whether it
will be soon enough or strong enough to overcome the increasing softness in the
first half. Today, we believe our 2001 revenues will be essentially flat with
2000, and our earnings per share for the year will be in the $2.15 to $2.25
range, versus last year's $2.15. We may have better visibility when we issue our
first quarter results on April 26."
Mr. Holliman concluded, "Despite sound economic fundamentals, consumer
confidence is down. As our country works through the current uncertainties and
as American consumers come to understand that our economy remains strong, we
expect them to return to customary spending levels. Like the economy, our
business also remains fundamentally sound. We will continue with our proven plan
of profitable growth, attention to margins, and balance sheet discipline, and we
are confident we will emerge as an even stronger company and a more dominant
force in our industry."
Furniture Brands International is one of America's largest home furniture
manufacturers, marketing its products under three of the best-known brand names
in the industry - Broyhill, Lane and Thomasville. The company manufactures
furniture across a broad spectrum of price categories and distributes its
products through an extensive system of independently owned national, regional
and local retailers.
This release contains forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward looking statements include the company's expected earnings per
share, profit margins, and cash flow, the effects of certain manufacturing
realignments and other business strategies, the prospects for the overall
business environment, and other statements containing the words "expects,"
"anticipates," "estimates," "believes," and words of similar import. The company
cautions investors that any such forward-looking statements are not guarantees
of future performance and that certain factors may cause actual results to
differ materially from those in the forward-looking statements. Such factors may
include: overall business and economic conditions and growth in the furniture
industry; changes in customer spending patterns and demand for home furnishings;
competitive factors, such as design and marketing efforts by other furniture
manufacturers; pricing pressures; success of the marketing efforts of retailers
and the prospects for further customer failures; the company's success in
furniture design and manufacture; the effects of manufacturing realignments and
cost savings programs; and other risk factors listed from time to time in the
company's public releases and SEC reports, including but not limited to the
report on Form 10-Q for the quarter ended September 30, 2000. The company also
cautions investors that our forecast for the first quarter and the year 2001
represent our outlook only as of this date, and we undertake no obligation to
update or revise any forward-looking statements, whether as a result of new
developments or otherwise.