INFORMATION
101 South Hanley Road
St. Louis, Missouri 63105
314-863-1100
FOR IMMEDIATE RELEASE
FURNITURE BRANDS INTERNATIONAL COMMENTS ON OUTLOOK
FOR FOURTH QUARTER 2000 AND FULL YEAR 2001
St. Louis, Missouri, December 15, 2000 - Furniture Brands International (NYSE:
FBN) announced today it expects fourth quarter sales to be marginally lower than
last year, and fourth quarter earnings per share from operations to be in the
$0.45 to $0.48 range, compared to $0.58 last year, resulting in full year
earnings per share from operations of $2.12 to $2.15, versus last year's $2.14.
The full year 2000 earnings per share estimate does not include two fourth
quarter non-recurring items which will largely offset each other: a
non-recurring loss from an increase in bad debt expense related to the
Heilig-Meyers reorganization, and a non-recurring gain from a dividend to be
received from a minority investment in a company which leases exhibition space
to furniture and accessory manufacturers in High Point, North Carolina. The 2000
earnings per share estimate also excludes a second quarter extraordinary item
(an expense) of $0.05 related to the early extinguishment of debt.
W.G. (Mickey) Holliman, Chairman, President and Chief Executive Officer, said,
"When we issued our third quarter results in October, we warned of a softening
business environment and weakening order flow, and since then we have seen those
trends continue. We see further evidence that consumers, particularly in the
mid- to lower-price points of our product offerings, are concerned about higher
gasoline and other energy-related costs. In addition, we are now seeing a
softening in business at the higher-price points, likely due to continuing
concerns about the financial markets."
Mr. Holliman continued, "In response to this weakening business environment, we
are continuing to adjust production levels in an effort to balance inventories
with incoming order activity, which has meant selective downtime in a number of
our manufacturing facilities. We are taking similar steps to adjust the flow of
imported products so our inventories will continue their downward movement
toward budgeted levels. While these actions are currently having a negative
effect on our operating profit margins, they will generate strong cash flow for
the remainder of this year and into 2001."
"Fourth quarter order activity continues to weaken, an indication the soft
business environment will extend into the first part of 2001," Mr. Holliman
added. "In terms of earnings per share, the unsettled economy makes forecasting
difficult for next year; however, we are comfortable with the current range of
analysts' expectations which generally project $2.20 to $2.30 per share for the
full year 2001. We should have a better focus on 2001 when we complete our
budgeting process later this month, and we will update this projection when we
issue our fourth quarter and year end earnings results on January 25, 2001."
Mr. Holliman concluded, "Over the past several years we have taken a number of
important strategic steps to position our company to withstand an economic
slowdown. These have included reducing our debt, realigning our customer base,
expanding our dedicated distribution system, refining and streamlining our
import program, and focusing continually on product innovation, cost control,
SKU reduction and asset utilization. Fundamentally, the overall economy remains
healthy. Nevertheless, we believe we have positioned our company so that, in the
event of a prolonged economic slowdown, we will emerge stronger and with
increased market share. In addition, our strong brands defend us against
economic weakness as well as periodic surges of competitors' import products. In
the meantime, we will stick to our proven strategic plan -- reacting but not
over-reacting to changes in business conditions."
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 for the third and fourth quarters, 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 fourth 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.
