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): April 25, 2002
(April 24, 2002)
Furniture Brands International, Inc.
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(Exact name of Registrant as specified in charter)
Delaware I-91 43-0337683
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(State of Incorporation) (Commission (IRS Employer
File Number) Identification Number)
101 South Hanley Road, St. Louis, Missouri 63105
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(Address of principal executive offices)
(314) 863-1100
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(Registrant's telephone number)
Item 5. Other Matters
On April 24, 2002 the Company announced operating results for the first
quarter of 2002. Net sales for the first quarter were $634.4 million, compared
with $506.2 million in the first quarter of 2001, an increase of 25.3%.
Excluding the impact of Henredon, Drexel Heritage and Maitland-Smith, which the
Company acquired as of the close of business on December 28, 2001, the Company's
sales (Broyhill, Lane and Thomasville) showed year-over-year growth of 5.1% in
the quarter.
Net earnings for the first quarter were $32.8 million as compared to $19.7
million in the first quarter of last year. Diluted net earnings per common share
for the first quarter were $0.58 as compared to $0.39 in the first quarter of
last year, an increase of 48.7%. Effective January 1, 2002, the Company adopted
FAS #142, which eliminated the amortization of goodwill and other intangible
assets with indefinite lives. Had FAS #142 been effective in the first quarter
of 2001, reported earnings per share in that quarter would have been $0.44, an
increase of 31.8%.
The Company also announced that its current projection for earnings per
share in the second quarter is $0.53 to $0.57 and for the full year 2002 is in
the $2.35 to $2.42 range.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release, dated April 24, 2002.
SIGNATURE
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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
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Steven W. Alstadt
Controller and Chief Accounting Officer
Dated: April 25, 2002
INFORMATION
101 South Hanley Road
St. Louis, Missouri 63105
314-863-1100
FOR IMMEDIATE RELEASE
FURNITURE BRANDS INTERNATIONAL REPORTS EARNINGS PER SHARE
OF $0.58 FOR THE FIRST QUARTER OF 2002
COMPANY ANNOUNCES $30.8 MILLION IN DEBT REDUCTION
St. Louis, Missouri, April 24, 2002 -- Furniture Brands International (NYSE:FBN)
announced today its financial results for the first quarter of 2002, which
included diluted net earnings per common share of $0.58 for the quarter.
Net Sales
Net sales for the first quarter of 2002 were $634.4 million, compared with
$506.2 million in the first quarter of 2001, an increase of 25.3%. Excluding the
impact of Henredon, Drexel Heritage and Maitland-Smith, which the company
acquired as of the close of business on December 28, 2001, the company's sales
(Broyhill, Lane and Thomasville) showed year-over-year growth of 5.1% in the
quarter.
Net Earnings
Net earnings for the first quarter were $32.8 million as compared to $19.7
million in the first quarter of last year. Diluted net earnings per common share
for the first quarter were $0.58 as compared to $0.39 in the first quarter of
last year, an increase of 48.7%. The company's previous guidance had been in the
$0.48 to $0.53 range for the quarter. Effective January 1, 2002, the company
adopted FAS #142 which eliminated the amortization of goodwill and other
intangible assets with indefinite lives. Had FAS #142 been effective in the
first quarter of 2001, reported earnings per share in that quarter would have
been $0.44, an increase of 31.8%.
Management Comments
"We began to see a significant turn-around in some segments of our business
toward the end of last year and continuing through the first quarter of this
year," stated W. G. (Mickey) Holliman, Chairman, President and Chief Executive
Officer. "In our middle-price product offerings, represented primarily by
Broyhill and Lane, order trends and revenues have been strong since the start of
the year. This is particularly true in the upholstery business, but we have seen
improvement in the case goods (wood furniture) business as well. Orders in the
first few weeks of the second quarter indicate a continuation of those favorable
trends. However, we have yet to see a significant return to the marketplace by
the upper-end consumer, as Thomasville, Henredon and Drexel Heritage each
continued to show negative comparisons year-over-year during the first quarter.
"We used the weak economic conditions of 2001 to our advantage, removing costs,
adapting to changing sourcing initiatives and positioning the company to achieve
higher operating profit margins going forward. We have seen the fruits of these
efforts in our first quarter results, particularly at Lane and Broyhill. With
only half our businesses showing favorable revenue gains, we have been able to
post an attractive year-over-year increase in our net earnings and earnings per
share. Any positive changes in revenues at our higher-end businesses,
particularly in the second half of this year, should add significantly to our
earnings performance."
Mr. Holliman continued, "The assimilation of our newly-acquired companies --
Henredon, Drexel Heritage and Maitland-Smith -- was seamless, and we have
already seen significant sharing of information and best practices among all of
our companies. The recently announced appointment of Jeff Young as President and
Chief Executive Officer of Drexel Heritage brings to that company one of the
best product design talents in the industry. We remain excited about the
contribution these three new companies will bring to Furniture Brands.
"Lastly, we continue to improve our balance sheet. Strong cash provided from
operations allowed the repayment during the quarter of $30.8 million in
long-term debt. This represents a 21% decrease in the $140 million in debt we
incurred at the end of last year to acquire the new companies. At this rate, we
will return to our targeted debt level by the end of this year. This provides us
with the flexibility to re-invest in our businesses and our brand names, and to
consider other attractive strategic alternatives."
Outlook
Mr. Holliman concluded, "In early March we expressed our belief that the soft
business environment at the high-end would continue until the second half of
this year, at which point we expected to see strengthened business through the
end of the year. Order trends in the second quarter to date have been positive,
and if continued would signal better revenues than previously suggested. Today,
we believe our second quarter revenues should be up 25% (4% to 6% excluding the
acquisitions) from the same quarter last year. We presently expect our second
quarter earnings per share to be in the $0.53 to $0.57 range and we are raising
our full-year expectation to a range from $2.35 to $2.42. As has been our
practice, we will provide an update on our second quarter and full-year
expectations in early June."
Furniture Brands International is America's largest home furnishings
manufacturer, manufacturing and sourcing its products under six of the
best-known brand names in the industry - Broyhill, Lane, Thomasville, Henredon,
Drexel Heritage and Maitland-Smith. The company markets its products 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, 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 most recent
reports on Forms 10-Q and 10-K. The company also cautions investors that our
forecast for the second quarter and the year 2002 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.
Mr. Holliman will be interviewed with respect to this earnings release on CNBC's
"Wake Up Call" at 5:40 a.m. (Central Time) on Thursday, April 25, 2002. A
conference call will be held to discuss the first quarter results at 7:30 a.m.
(Central Time) on April 25, 2002. The call can be accessed at
www.streetevents.com, or on the company's website at www.furniturebrands.com.
FURNITURE BRANDS INTERNATIONAL
CONSOLIDATED OPERATING RESULTS
(Dollars in thousands except per share)
(Unaudited)
Three Months Ended
March 31,
2002 2001
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Net sales.............................................................. $634,461 $506,182
Costs and expenses:
Cost of operations................................................... 456,251 370,416
Selling, general and administrative expenses......................... 110,298 84,411
Depreciation and amortization ....................................... 12,556 15,258
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Earnings from operations............................................... 55,356 36,097
Interest expense....................................................... 5,602 6,769
Other income, net...................................................... 1,074 809
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Earnings before income tax expense 50,828 30,137
Income tax expense..................................................... 18,057 10,456
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Net earnings........................................................... $ 32,771 $ 19,681
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Net earnings per common share (diluted)................................ $ 0.58 $ 0.39
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Average diluted common shares
outstanding (in thousands)........................................... 56,438 51,083
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Note:Effective January 1, 2002, the company adopted FAS 142 regarding
amortization of goodwill and other intangible assets. If this accounting
change had occurred effective January 1, 2001, the company would have
reported diluted net earnings per common share of $0.44 for the three
months ended March 31, 2001.
FURNITURE BRANDS INTERNATIONAL
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
March 31, December 31,
2002 2001
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Assets
Current assets:
Cash and cash equivalents......................................... $ 30,231 $ 15,707
Receivables, net.................................................. 400,093 359,493
Inventories....................................................... 376,269 369,773
Prepaid expenses and other current assets......................... 34,845 33,742
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Total current assets............................................ 841,438 778,715
Net property, plant and equipment .................................. 322,572 321,640
Intangible assets................................................... 359,002 367,305
Other assets........................................................ 38,450 35,829
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$1,561,462 $1,503,489
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Liabilities and Shareholders' Equity
Current liabilities:
Accrued interest expense ......................................... $ 3,281 $ 2,805
Accounts payable and other accrued expenses ...................... 208,776 172,490
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Total current liabilities....................................... 212,057 175,295
Long-term debt ..................................................... 423,600 454,400
Other long-term liabilities......................................... 113,759 114,135
Shareholders' equity ............................................... 812,046 759,659
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$1,561,462 $1,503,489
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