Furniture Brands International Inc. (FBN, Financial) filed Quarterly Report for the period ended 2009-06-30.
Furniture Brands International Inc. is one of the largest manufacturers of residential furniture in the United States. They market products through three operating subsidiaries: Broyhill Furniture Industries Inc. Lane Furniture Industries Inc. and Thomasville Furniture Industries Inc. Furniture Brands International Inc. has a market cap of $226.5 million; its shares were traded at around $4.65 with and P/S ratio of 0.1.
Gross profit for the three months ended June 30, 2009 was $61.6 million compared to $100.4 million for the three months ended June 30, 2008. Gross profit for the six months ended June 30, 2009 was $142.0 million compared to $211.4 million for the six months ended June 30, 2008. The decline in gross profit in both the three and six month periods is primarily attributable to lower sales volume and higher price discounts, partially offset by reductions in product write-downs. We expect to realize improved margins in the future due to increased production efficiency driven by our recent restructuring activities, lower materials cost, and lower transportation cost.
Selling, general, and administrative expenses for the three months ended June 30, 2009 were $76.0 million compared to $132.0 million in the three months ended June 30, 2008. Selling, general, and administrative expenses for the six months ended June 30, 2009 were $159.2 million compared to $234.0 million in the six months ended June 30, 2008. The decrease in selling, general, and administrative costs in both the three and six month periods was primarily due to lower compensation and incentive plan costs, advertising expenses, bad debt expense, and professional fees, partially offset by higher occupancy expense. The higher occupancy expense is primarily related to the addition of 22 Thomasville retail stores since the second quarter of 2008, which primarily represent acquisitions where we had subleased the facility to dealers or guaranteed dealer lease payments, partially offset by the closing of 8 non-Thomasville retail stores since the second quarter of 2008.
Interest expense totaled $1.5 million and $3.3 million for the three and six months ended June 30, 2009, respectively, compared to $2.8 million and $6.9 million for the three and six months ended June 30, 2008, respectively. The decrease in interest expense in both the three and six month periods resulted from reduced long-term debt and lower interest rates.
Loss per common share from continuing operations was $0.33 and $0.41 for the three and six months ended June 30 2009, respectively, compared to $0.49 and $0.42 for the three and six month periods ended June 30, 2008, respectively. Weighted average common shares outstanding used in the calculation of net earnings per common share were 48.7 million for the three and six months ended June 30, 2009 and 48.8 million and 48.7 million for the three and six months ended June 30, 2008, respectively.
Cash and cash equivalents at June 30, 2009 totaled $77.3 million, compared to $106.6 million at December 31, 2008. Net cash provided by operating activities for the six months ended June 30, 2009 totaled $35.5 million compared with $39.6 million for the six months ended June 30, 2008. Lower net losses from operations and higher receipt of income tax refund receivable contributed increased cash flow from operations in the six months ended June 30, 2009 as compared to 2008, but were offset by lower cash generated from working capital and higher payments of long-term incentive compensation. Net cash used by investing activities for the six months ended June 30, 2009 totaled $3.8 million compared with net cash provided by investing activities of $58.1 million in the six months ended June 30, 2008. The decrease in cash provided by investing activities is primarily the result of a reduction of proceeds from the sale of business in the six months ended June 30, 2009 as compared to 2008, partially offset by fewer acquisitions of stores requiring cash payments and fewer additions to property, plant and equipment in the six months ended June 30, 2009 as compared to 2008. Net cash used by financing activities totaled $61.0 million in the six months ended June 30, 2009 compared with $84.7 million in the six months ended June 30, 2008. Net cash used by financing activities in the six months ended June 30, 2009 consisted of payment of long-term debt. Net cash used by financing activities in the six months ended June 30, 2008 consisted of payment of long-term debt ($80.8 million, net of restricted cash) and cash dividends ($3.9 million).
Read the The complete ReportFBN is in the portfolios of Donald Yacktman of Yacktman Asset Management Co..
Furniture Brands International Inc. is one of the largest manufacturers of residential furniture in the United States. They market products through three operating subsidiaries: Broyhill Furniture Industries Inc. Lane Furniture Industries Inc. and Thomasville Furniture Industries Inc. Furniture Brands International Inc. has a market cap of $226.5 million; its shares were traded at around $4.65 with and P/S ratio of 0.1.
Highlight of Business Operations:
Net sales for the three months ended June 30, 2009 were $288.3 million, compared to $449.9 million in the three months ended June 30, 2008, a decrease of $161.6 million or 35.9%. Net sales for the six months ended June 30, 2009 were $645.1 million, compared to $927.1 million in the six months ended June 30, 2008, a decrease of $282.0 million or 30.4%. The decrease in net sales in both the three and six month periods was driven by weak retail conditions and decisions to abandon unprofitable products, customers, and programs, resulting in lower sales volume, and by higher price discounts.Gross profit for the three months ended June 30, 2009 was $61.6 million compared to $100.4 million for the three months ended June 30, 2008. Gross profit for the six months ended June 30, 2009 was $142.0 million compared to $211.4 million for the six months ended June 30, 2008. The decline in gross profit in both the three and six month periods is primarily attributable to lower sales volume and higher price discounts, partially offset by reductions in product write-downs. We expect to realize improved margins in the future due to increased production efficiency driven by our recent restructuring activities, lower materials cost, and lower transportation cost.
Selling, general, and administrative expenses for the three months ended June 30, 2009 were $76.0 million compared to $132.0 million in the three months ended June 30, 2008. Selling, general, and administrative expenses for the six months ended June 30, 2009 were $159.2 million compared to $234.0 million in the six months ended June 30, 2008. The decrease in selling, general, and administrative costs in both the three and six month periods was primarily due to lower compensation and incentive plan costs, advertising expenses, bad debt expense, and professional fees, partially offset by higher occupancy expense. The higher occupancy expense is primarily related to the addition of 22 Thomasville retail stores since the second quarter of 2008, which primarily represent acquisitions where we had subleased the facility to dealers or guaranteed dealer lease payments, partially offset by the closing of 8 non-Thomasville retail stores since the second quarter of 2008.
Interest expense totaled $1.5 million and $3.3 million for the three and six months ended June 30, 2009, respectively, compared to $2.8 million and $6.9 million for the three and six months ended June 30, 2008, respectively. The decrease in interest expense in both the three and six month periods resulted from reduced long-term debt and lower interest rates.
Loss per common share from continuing operations was $0.33 and $0.41 for the three and six months ended June 30 2009, respectively, compared to $0.49 and $0.42 for the three and six month periods ended June 30, 2008, respectively. Weighted average common shares outstanding used in the calculation of net earnings per common share were 48.7 million for the three and six months ended June 30, 2009 and 48.8 million and 48.7 million for the three and six months ended June 30, 2008, respectively.
Cash and cash equivalents at June 30, 2009 totaled $77.3 million, compared to $106.6 million at December 31, 2008. Net cash provided by operating activities for the six months ended June 30, 2009 totaled $35.5 million compared with $39.6 million for the six months ended June 30, 2008. Lower net losses from operations and higher receipt of income tax refund receivable contributed increased cash flow from operations in the six months ended June 30, 2009 as compared to 2008, but were offset by lower cash generated from working capital and higher payments of long-term incentive compensation. Net cash used by investing activities for the six months ended June 30, 2009 totaled $3.8 million compared with net cash provided by investing activities of $58.1 million in the six months ended June 30, 2008. The decrease in cash provided by investing activities is primarily the result of a reduction of proceeds from the sale of business in the six months ended June 30, 2009 as compared to 2008, partially offset by fewer acquisitions of stores requiring cash payments and fewer additions to property, plant and equipment in the six months ended June 30, 2009 as compared to 2008. Net cash used by financing activities totaled $61.0 million in the six months ended June 30, 2009 compared with $84.7 million in the six months ended June 30, 2008. Net cash used by financing activities in the six months ended June 30, 2009 consisted of payment of long-term debt. Net cash used by financing activities in the six months ended June 30, 2008 consisted of payment of long-term debt ($80.8 million, net of restricted cash) and cash dividends ($3.9 million).
Read the The complete ReportFBN is in the portfolios of Donald Yacktman of Yacktman Asset Management Co..
