Furniture Brands Has Profitable 2nd Quarter

August 4, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on August 5, 2010

Furniture Brands International, St. Louis, (NYSE:FBN) reported second-quarter 2010 sales of $289.5 million, a slight increase over the prior-year period.

For the six months ended June 30, the company reported net sales of $611.9 million and net income of $7.7 million, or $0.16 per diluted share, compared with net sales of $645.1 million and a net loss of $20.2 million, or $0.42 per diluted share, for the six months ended June 30, 2009.

"Furniture Brands' ongoing efforts to reposition the company delivered solid year-over-year gross margin improvement for the second straight quarter," said Chairman and Chief Executive Officer Ralph P. Scozzafava. "We have ongoing initiatives in place to drive profitable sales as we eliminate costs from our operations and reduce our break-even point. These are essential elements of our business strategy and will help us become a stronger company in the future. The underpinnings of the solid financial performance of the first quarter of 2010--historically the company's highest quarter for net sales--remain in place. Gross margin of 25.7% for the second quarter is the highest level for that quarter since 2002."

Scozzafava credited strong gross margin performance to several factors: 45 of 55 FBI production lines have been converted to a cellular manufacturing design; domestic distribution and transportation costs are being reduced while improving customer service to our dealers; and lean implementation is yielding a more competitive cost structure as well as delivering stronger quality performance in FBI factories.

"We have also vastly improved safety in all of our facilities, which is lowering our workers compensation costs while the benefits to our people are tremendous," Scozzafava said.

Second-quarter 2010 retail sales at the 71 company-owned stores and showrooms totaled $36.4 million with a gross margin of 41.7 percent compared with sales of $29.8 million and gross margin of 39.3 percent at the 69 stores and showrooms the company owned during the second quarter of 2009. Second-quarter 2010 same-store sales at the 40 Thomasville stores that the company has owned for more than 15 months showed an increase of 21 percent from the second quarter of 2009.

"The steady improvement in our Thomasville same-store sales performance illustrates the power of the Thomasville brand with consumers and the benefits of a well-managed retail operation. We continue to leverage and share our retail selling insights with our independent Thomasville dealers and also with our Lane and Broyhill retail partners. Sharing knowledge and best practices is a key step in gaining additional floor placements and improving product sell-through," Scozzafava said.