FBI Posts Nearly $16 Million Loss in Second Quarter

Furniture Brands International (NYSE: FBN) reported a net loss of nearly $16 million for the second quarter ended June 30, compared to a $23.9 million loss during the same period last year.

The multi-brand company reported sales of nearly $288.3 million for the quarter, compared to sales of $449.8 million during the same period last year.

For the six month period, the company showed a $20.2 million loss, compared with net income of $9.7 million for the first six months of 2008. Sales for the six months were $645.1 million, compared with $927 million during the same period last year.

"Global and domestic economic indicators point to continued weak consumer spending trends that offer little immediate relief from the industry's current depressed state," said Ralph Scozzafava, chairman of the board and chief executive officer. "Furniture Brands' sales results for the quarter reflect these trends as well as management's decisions to limit the credit exposure to weak retail partners and by exiting unprofitable licensing arrangements. The long-term benefit to Furniture Brands' balance sheet from these decisions more than outweighs the short-term gains of overhead absorption that come from unprofitable sales. While we are not satisfied with our results for this seasonally weak quarter, the decisive actions that we are taking in the face of a rapidly deteriorating market have enabled us to stabilize our gross profit margin and protect our balance sheet, making us a much more resilient company."

Gross margin for the second quarter was 24.1 percent compared to 22.3 percent in the same quarter of 2008.

"Furniture Brands continues to focus on the key areas that are very much under our control: operational efficiency and effectiveness, cost control and balance sheet strength," Scozzafava said. "Maintaining gross margins and lowering operating expenses during this severe industry downturn helps to strengthen our balance sheet while creating operating leverage that will benefit financial performance when industry conditions improve."

Scozzafava said the company is investing in product development and marketing programs to improve consumer traffic to its retail partners, including new Web sites, Broyhill's quick-ship upholstery program, an e-mail marketing campaign and Lane's mobile showroom national tour.