FBI Sales Off 17.6% in 3rd Quarter

October 30, 2008  by in UnCategorized   

By Home Furnishings Business in on October 2008 Furniture Brands International, St. Louis, reported Thursday that third-quarter 2008 sales fell 17.6 percent to $413 million compared with the same period last year; and a net loss of $41.7 million. FBI lost $13.7 million in third-quarter 2007.

Year to date, through Sept. 30, FBI sales of $1.34 billion are down 15 percent from the $1.58 billion it recorded for the first nine months of 2007. FBI has lost $32 million through 2008’s first three quarters, compared with a $ 4.97 million loss at the same point last year.

FBI credited the third-quarter sales decline to weak consumer market conditions, and the loss to weak market conditions and restructuring, inventory and accounts receivable charges.

“By nearly every measure, the economic environment in which Furniture Brands operates has worsened in the past three months, and consumer confidence has been shaken by the unprecedented turmoil in the global financial markets,” said Chairman and CEO Ralph P. Scozzafava in an announcement of results.

FBI revised its fiscal 2008 sales forecast slightly downward to a range of $1.7 billion to $1.75 billion. The company anticipates that additional pre-tax charges totaling between $56 million and $72 million relating to the weak economy and restructuring will be recorded during the fourth quarter of 2008.

“Furniture Brands is and will be taking direct steps to maintain the company’s financial position during this very challenging period,” Scozzafava said. “The charges included in the third-quarter results are primarily non-cash and reflect actions that will improve future financial performance. The management team is continuing to focus on Furniture Brands’ financial structure. We are working to ensure that the company will emerge from this period of economic instability as a stronger competitor.”

As of Sept. 30, FBI had cash and equivalents totaling $110 million, long-term debt of $200 million, and credit facility availability of $28 million.

In addition, FBI’s board of directors elected on Thursday to suspend the company’s quarterly dividend until further notice. FBI anticipates redirecting the approximately $8 million in annual dividend payments to reduce long-term debt and other corporate purposes.

“In light of the challenging retail environment, the board of directors agreed that the company’s shareholders are best served by a strategy of cash preservation and maximum financial flexibility,” Scozzafava said.