Furniture Brands International Reports Sales and Earnings for the Fourth Quarter and Full Year 2003

Business Wire, Jan 28, 2004

Business Editors

ST. LOUIS--(BUSINESS WIRE)--Jan. 28, 2004

Furniture Brands International (NYSE:FBN) announced today its financial results for the fourth quarter and full year ended December 31, 2003.

Operating Results - Fourth Quarter

Net sales for the fourth quarter of 2003 were $616.8 million, compared with $595.5 million in the fourth quarter of 2002, an increase of 3.6%. Net earnings for the fourth quarter were $22.6 million, as compared to $29.3 million in the fourth quarter of the prior year. Diluted net earnings per common share were $0.40 as compared to $0.52 for the fourth quarter of 2002. The company's previous earnings per share guidance had been in the $0.38 to $0.42 range for the quarter.

Included in the 2003 fourth quarter net earnings were restructuring and asset impairment charges totaling $8.2 million ($13.0 million before income tax benefits) or $0.15 per diluted common share. As previously reported, these charges reflect the company's acceleration of its manufacturing reorganization efforts and the disposal of certain assets.

Operating Results - Full Year 2003

For the full year 2003, net sales were $2,367.7 million, compared with $2,397.7 million for the full year 2002, a decrease of 1.2%. Net earnings for the full year 2003 were $94.6 million or $1.68 per diluted common share as compared to $118.8 million, or $2.11 per diluted common share for 2002.

Included in net earnings for the full year 2003 were restructuring and asset impairment charges totaling $11.3 million ($17.8 million before income tax benefits) or $0.20 per diluted common share.

Management Comments

"2003 was the third consecutive difficult year for the residential furniture industry, but we were pleased to see a positive change in order trends during the latter part of the year that improved our fourth quarter results and provided encouragement as we entered 2004," stated W. G. (Mickey) Holliman, Chairman, President and Chief Executive Officer. "The recent strength in our orders has been across substantially all of our product lines - both middle-price and upper-end - and involves both our upholstery and case goods businesses. While we remain cautious in our outlook, it appears that 2004 is beginning on a positive note.

"During 2003, we continued to address our cost structure and strengthen our balance sheet. Our strategic blending of import programs with our strong domestic manufacturing base was solidified by a focused alignment of our operating companies with the best offshore manufacturers. At the same time, we completed the bulk of our domestic manufacturing reorganization efforts - albeit at a high cost to our short-term financial results.

"Reflecting continued strong cash flow from operations, we completed our deleveraging program, commenced a meaningful cash dividend program, and began accumulating cash for use in long-term growth opportunities and further enhancing shareholder value. We are now in an excellent position, both operationally and financially, to grow our market share and our equity market capitalization."

Outlook

Mr. Holliman concluded, "As earlier stated, order trends in the latter part of 2003 have given us reason to be optimistic about 2004. While we still have work to do in improving our operating profit margins, most of the plant closings and other restructuring efforts are behind us.

"With this in mind, we currently expect our first quarter 2004 earnings per share to be in the $0.50 to $0.53 range. We will give further earnings guidance on a quarter-by-quarter basis until we gain better visibility with respect to the full year 2004. As has been our practice, we will provide an update on our first quarter expectation in early March."

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 first quarter of 2004 represents 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.