June 5, 2001
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
RE: Form 8-K
Furniture Brands International, Inc.
Dear Sir or Madam:
Submitted herewith for filing is the above-referenced report with
exhibit.
This filing is being affected by direct transmission to the
Commission's EDGAR system.
Very truly yours,
/s/ Robert L. Kaintz
Assistant General Counsel
RLK/rsl
Enclosure
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 4, 2001 (June 4, 2001)
Furniture Brands International, Inc.
(Exact name of Registrant as specified in charter)
Delaware I-91 43-0337683
- ------------------------ --------------- --------------
(State of Incorporation) (Commission (IRS Employer
File Number) Identification Number)
101 South Hanley Road, St. Louis, Missouri 63105
------------------------------------------------
(Address of principal executive offices)
(314) 863-1100
-------------------------------
(Registrant's telephone number)
Item 5. Other Matters
On June 4, 2001, the Company announced the merger of the operations of
Action Industries, Inc. and The Lane Company, Incorporated into their parent
company, Lane Furniture Industries, Inc. The consolidation will entail the
closing of three manufacturing facilities and the Lane headquarters in
Altavista, Virginia, with the elimination of over 1,000 jobs. The consolidation
will be completed by December 31, 2001. With these plant closings and other
personnel reductions, the Company will have permanently reduced its total
employment by 12% and its manufacturing capacity by 15%.
To implement the merger the Company will record a restructuring charge of
$0.20 to $0.25 per share over the remainder of the year. Most of this charge
will be recorded in the second quarter and will represent a non-cash write down
of manufacturing and office facilities to realizable value. The balance of the
charge, representing employee retention and other closing costs, will be
recorded as incurred throughout the second half of 2001. The Company also
announced that it believes its second quarter revenues could be down 12% to 15%
from the same quarter last year. Second quarter earnings per share are now
expected to be in the $0.25 to $0.30 range, excluding the restructuring charge.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release, dated June 4, 2001
99 Press Release, dated June 4, 2001
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.
By: /s/ Steven W. Alstadt
---------------------------------------
Steven W. Alstadt
Controller and Chief Accounting Officer
Dated: June 5, 2001
INFORMATION
101 South Hanley Road
St. Louis, Missouri 63105
314-863-1100
FOR IMMEDIATE RELEASE
FURNITURE BRANDS INTERNATIONAL REPORTS ON DOMESTIC MANUFACTURING CAPACITY
REDUCTIONS;
COMMENTS ON OUTLOOK FOR SECOND QUARTER
St. Louis, Missouri, June 4, 2001 - Furniture Brands International (NYSE: FBN),
one of the industry's largest residential furniture manufacturers and the
largest producer of case goods (wood) furniture for the home, reported that,
including today's announcement of additional plant closings and other personnel
reductions, the company will have permanently reduced its total employment by
12% and its manufacturing capacity by 15%. These downsizing activities should be
completed by the end of the year.
In a separate press release issued earlier today, the company announced the
merger of the operations of Action Industries, Inc. and The Lane Company
Incorporated into their parent company, Lane Furniture Industries, Inc., one of
the largest full-line residential furniture manufacturers in the country. The
consolidation will entail the closing of three manufacturing facilities and the
Lane headquarters in Altavista, Virginia, with the elimination of over 1,000
jobs.
W.G. (Mickey) Holliman, Chairman, President and Chief Executive Officer, said,
"The plant closings we have just announced, coupled with other personnel actions
taken since the first of the year, will eliminate over 2,400 jobs and
permanently close 11 of our manufacturing facilities. Over 2.8 million square
feet of domestic manufacturing space will be vacated and sold. More
specifically, the closures represent over 20% of our domestic case goods
manufacturing capacity."
"These actions were necessary to address a growing problem with domestic case
goods capacity utilization. The company's increasing emphasis on sourcing
products from offshore -- particularly case goods -- and the success of our
import infrastructure have made it difficult to maintain adequate utilization
rates within a number of our plants. The soft business climate has aggravated
this situation, requiring us to accelerate our planned movement to a more
balanced sourcing strategy -- emphasizing worldwide product procurement."
Commenting on the Lane reorganization announcement issued earlier today, Mr.
Holliman stated, "To implement the merger of the operations of Action and The
Lane Company into Lane Furniture Industries, Furniture Brands International will
record a restructuring charge of $0.20 to $0.25 per share over the remainder of
this year. Most of this charge will be recorded in the second quarter and will
represent a non-cash write down of manufacturing and office facilities to
realizable value. The balance of the charge, representing employee retention and
other closing costs, will be recorded as incurred throughout the second half of
2001."
Commenting on current business activity, Mr. Holliman said, "Because we have
shortened our lead-times significantly, we have only 4-5 weeks of forward
visibility, and forecasting earnings in this unsettled environment is difficult.
The retail furniture business remains very weak. Today, we believe our second
quarter revenues could be down 12% to 15% from the same quarter last year. Our
second quarter earnings per share are now expected to be in the $0.25 to $0.30
range, excluding the restructuring charge. We will provide an update on our
full-year expectations when second quarter results are released in July."
"Cash flow continues to be very favorable, which should result in additional
long-term debt paydown in the second quarter following on the $47 million repaid
in the first quarter. In addition, to take advantage of today's low interest
rates, we have entered into a series of interest rate swaps to fix the interest
on $300 million of our debt for the next three years. Going forward, our
effective interest rate will be in the 5-1/2% range. This will largely free us
from floating interest rate swings and will provide us with more free cash flow
as our interest expense continues to decrease. We look forward to the
flexibility our strong cash flow gives us as we consider future strategic
alternatives, including further debt reduction, share repurchases, or strategic
acquisitions."
Mr. Holliman concluded, "We are totally focused on improving profitability and
increasing long-term shareholder value. As we continue to streamline our
businesses we will address costs wherever they are found. This is the time for
bold leadership, and we will do whatever it takes to strengthen our competitive
advantage. When our business turns around we will be well-positioned to realize
outstanding profit margins and earnings performance."
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 March 31, 2001. The company also
cautions investors that our forecast for the second 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.
INFORMATION
101 South Hanley Road
St. Louis, Missouri 63105
314-863-1100
FURNITURE BRANDS INTERNATIONAL ANNOUNCES
REORGANIZATION OF THE LANE COMPANY
WILL CLOSE THREE MANUFACTURING FACILITIES IN VIRGINIA
St. Louis, Missouri, June 4, 2001 - Furniture Brands International (NYSE:FBN)
announced today the merger of the operations of Action Industries, Inc. and The
Lane Company Incorporated into its Lane Furniture Industries, Inc. subsidiary,
one of the largest full-line furniture manufacturers in the United States.
Lane Furniture Industries presently has two primary subsidiaries, Action
Industries and The Lane Company. Action Industries, based in Tupelo,
Mississippi, is one of the country's largest manufacturers of reclining, motion
and stationary upholstered furniture. The Lane Company, based in Altavista,
Virginia, has two operating divisions. The Lane Division is a case goods
operation focusing on whole home wood furniture collections, occasional tables,
youth furniture, and cedar chests. The announced reorganization entails the
merger of the operations of the Lane Division with Action Industries.
Laneventure, based in Conover, North Carolina, is the other division of The Lane
Company and is a manufacturer and importer of high quality indoor/outdoor
furniture. Laneventure's operations will not be affected by the announced
consolidation.
The consolidation will begin immediately and will be completed by December 31,
2001. The Lane Division's three manufacturing facilities and its headquarters in
Altavista, Virginia will be closed permanently. Continuing administrative,
logistic, sales and marketing functions will be relocated to the Lane Furniture
Industries offices in Tupelo, Mississippi. The Action Industries and Lane
Division sales forces will be merged under one management group. Jerry Ruff,
currently President of the Lane Division, will become President of Lane
International and will be responsible for all Lane international operations,
including both import and export. Mr. Ruff will continue to report to John T.
(Tom) Foy, President and Chief Executive Officer of Lane Furniture Industries.
Mr. Foy stated: "An increasing percentage of the Lane Division's product line is
represented by high quality imported products. These imported products represent
a significant value to our customers, while producing higher profit margins.
However, the higher margins are being offset by the costs we are incurring from
underutilized domestic manufacturing capacity. This consolidation will allow the
Lane Division to complete its transition from a manufacturing to a marketing
company, with improved profitability and better values for our customers."
Mr. Foy continued: "This transition will entail the loss of over 1,000 jobs,
something we do not undertake lightly. The employees have been a tremendous
asset for our company, and we greatly appreciate their many years of dedicated
service. However, the closing of the manufacturing facilities and the Altavista
headquarters will enable us to leverage our management, transportation and
customer service functions by merging them with the veteran staff of Lane
employees located in Tupelo. Lane case goods and occasional products will be
warehoused in Tupelo and a potential Western location, and will be shipped in
combination with its upholstered products. Service on all of our products will
improve significantly by utilizing Action Transport, Action's massive
transportation operation, as its primary carrier."
"This new organizational structure combines all products marketed under the Lane
brand name, and forms a comprehensive furniture manufacturer featuring
stationary leather upholstery, motion furniture, recliners, sleepers, bedroom,
dining room, occasional tables, and cedar chests. We are combining the
outstanding Action Industries operations with the tremendous potential in the
Lane Division, and creating one of the largest manufacturers in our industry
under the powerful Lane brand name -- a name that will continue to gain
importance as we make it the focus of our national and local dealer advertising
campaigns."
Commenting on the new organizational structure, W.G. (Mickey) Holliman,
Chairman, President and Chief Executive Officer of Furniture Brands
International stated: "The merger of the operations of Action Industries and the
Lane Division is an important step forward in our previously announced efforts
to reduce costs and increase our emphasis on imported products. In the near
term, these changes should for the most part be transparent to our customers and
suppliers, providing enhanced levels of customer service arising out of the
combined operations. Tom Foy has had leadership responsibility over all Lane
companies since January 2000. With this merger, we will realize significant
additional synergies from the combined operations."
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 effects of the announced
restructuring, and other statements containing the words "expects,"
"anticipates," "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.