Drexel Heritage Announces Consolidation of Plants

Business Wire, Jan 22, 2004

Business Editors

HIGH POINT, N.C.--(BUSINESS WIRE)--Jan. 22, 2004

Drexel Heritage Furniture Industries, Inc. announced today that it will close Plant #2, its full line case goods plant in Marion, North Carolina, on April 9, 2004. Plant #2 is a 500,000 square foot facility that employs a workforce of approximately 350 persons. A majority of the products produced at Plant #2 will be transferred to other Furniture Brands International domestic production facilities.

In a related move, Drexel's Plant #60 located in Morganton, North Carolina, a 150,000 square foot veneer and plywood service plant that employs 45, will close in this same timeframe. Plant #60 production will be transferred to other Furniture Brands facilities as well.

Jeff Young, President and Chief Executive Officer of Drexel Heritage, attributed the plant realignments to utilization issues. "Despite improving business, our plants have been operating at significantly below capacity for some time," said Young. "The transfer of Plant #2 and Plant #60 production to other Furniture Brands domestic facilities will enable our plants company-wide to operate more efficiently in the coming year. Plant #2 and Plant #60 will be sold."

Young stated that some of the Plant #2 Drexel employees may be offered jobs at other sister facilities, but that most jobs will be eliminated. Young stated: "We regret this decision and the impact it will have on the Marion and Morganton communities, and we sincerely want to thank our employees for their tremendous efforts over the years."

W.G. (Mickey) Holliman, Chairman, President and Chief Executive Officer of Furniture Brands International (NYSE:FBN), the parent company of Drexel Heritage, stated: "We are encouraged by the strong order trends at Drexel Heritage in the latter part of 2003, but the inefficiencies in operating these facilities have been a drag on that company's earnings. To the extent allowable, we will include the financial impact of these additional realignments in our 2003 results. The impact on 2004 earnings should not be significant. We will discuss these costs further when we issue our fourth quarter and full year earnings results on January 28, 2004."

This release includes forward-looking statements that are based on the company's current expectations and are subject to risks and uncertainties that may cause actual results to differ. Investors are referred to the company's public filings for further information.