Delaware | 001-00091 | 43-0337683 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1 N. Brentwood, St. Louis, Missouri | 63105 | |
(Address of principal executive offices) | (zip code) |
ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) | Exhibits. |
99.1 | Press release of Furniture Brands International, Inc. dated May 3, 2013, reporting results for the quarter ended March 30, 2013. |
Furniture Brands International, Inc. | ||
(Registrant) | ||
By: | /s/ Vance C. Johnston | |
Name: | Vance C. Johnston | |
Title: | Chief Financial Officer |
99.1 | Press release of Furniture Brands International, Inc. dated May 3, 2013, reporting results for the quarter ended March 30, 2013. |
• | Net sales were $254.7 million compared to $287.3 million for the three months ended March 31, 2012, a decrease of $32.6 million, or 11.3%. First quarter 2013 retail sales at the 49 Thomasville company-owned stores totaled $26.9 million compared with sales of $27.5 million at 48 Thomasville company-owned stores in the prior year period. First quarter same-store sales at the 46 Thomasville stores that the company has owned for more than 15 months were down 2.3% compared to the first quarter of 2012, when same-store sales were flat. |
• | Gross profit was $51.5 million and gross margin was 20.2%, which included $1.0 million in charges related to product rationalization. Gross profit for the first quarter of 2012 was $71.4 million and gross margin was 24.9%. Excluding this charge, the decrease in first quarter 2013 gross margin when compared to the year ago period was primarily due to deleveraging of fixed manufacturing costs due to lower sales, product rework and additional inventory charges, increased freight costs, and increased employee benefit costs. |
• | Selling, general and administrative expenses (SG&A) for the first quarter of 2013 totaled $69.1 million and included $0.5 million in charges related to dark stores. SG&A expenses for the first quarter of 2012 totaled $70.0 million. Excluding this charge, the decrease in the first quarter 2013 SG&A was primarily due to lower compensation costs, partially offset by an increase in advertising expense. |
• | The Company had an operating loss of $19.0 million as compared to an operating income of $1.4 million in the prior year quarter. The current quarter operating loss includes $2.9 million of charges, which consist of the aforementioned $1.5 million of charges as well as $1.4 million of impairment charges related to assets held for sale. |
• | Interest expense was $2.4 million as compared to $0.8 million in the prior year period. The increase in interest expense was primarily due to the increased interest rate on higher debt and amortization of debt issuance costs related to the previously announced debt refinancing in September 2012. |
• | Net loss for the first quarter of 2013 was $21.2 million, or $0.38 per diluted share, which includes a $2.9 million after-tax charge from the aforementioned items. This compares to a net profit of $0.4 million, or $0.01 per diluted share, in the first quarter of 2012. |
• | The Company ended the quarter with a cash balance of $10.3 million and a debt balance of $116.8 million. |
Three Months Ended | |||||||
March 30, 2013 | March 31, 2012 | ||||||
Net sales | $ | 254,727 | $ | 287,258 | |||
Cost of sales | 203,249 | 215,816 | |||||
Gross profit | 51,478 | 71,442 | |||||
Selling, general, and administrative expenses | 69,134 | 69,984 | |||||
Impairment of assets, net of recoveries | 1,377 | 23 | |||||
Earnings (loss) from operations | (19,033 | ) | 1,435 | ||||
Interest expense | 2,424 | 750 | |||||
Other income, net | 112 | 204 | |||||
Earnings (loss) before income tax expense (benefit) | (21,345 | ) | 889 | ||||
Income tax expense (benefit) | (142 | ) | 510 | ||||
Net (loss) earnings | $ | (21,203 | ) | $ | 379 | ||
Net (loss) earnings per common share — basic and diluted | $ | (0.38 | ) | $ | 0.01 | ||
Weighted average shares of common stock outstanding - Basic | 55,348 | 55,031 | |||||
Weighted average shares of common stock outstanding - Diluted | 55,348 | 55,180 |
March 30, 2013 | December 29, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10,283 | $ | 11,869 | |||
Receivables, less allowances of $12,279 ($11,615 at December 29, 2012) | 112,418 | 125,739 | |||||
Inventories | 241,660 | 244,333 | |||||
Prepaid expenses and other current assets | 10,866 | 11,287 | |||||
Total current assets | 375,227 | 393,228 | |||||
Property, plant, and equipment, net | 98,712 | 103,403 | |||||
Trade names | 76,105 | 76,105 | |||||
Other assets | 46,268 | 45,705 | |||||
$ | 596,312 | $ | 618,441 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 104,173 | $ | 113,590 | |||
Accrued expenses | 55,404 | 58,741 | |||||
Total current liabilities | 159,577 | 172,331 | |||||
Long-term debt | 116,788 | 105,000 | |||||
Deferred income taxes | 22,063 | 18,002 | |||||
Pension liability | 211,112 | 213,295 | |||||
Other long-term liabilities | 50,418 | 55,015 | |||||
Shareholders’ equity | 36,354 | 54,798 | |||||
$ | 596,312 | $ | 618,441 |
Three Months Ended | |||||||
March 30, 2013 | March 31, 2012 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) earnings | $ | (21,203 | ) | $ | 379 | ||
Adjustments to reconcile net (loss) earnings to net cash used by operating activities: | |||||||
Depreciation and amortization | 4,011 | 4,968 | |||||
Compensation expense related to stock option grants and restricted stock awards | 529 | 596 | |||||
Impairment of assets | 1,377 | 23 | |||||
Other, net | 35 | 203 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 13,321 | (23,167 | ) | ||||
Inventories | 2,673 | 2,641 | |||||
Prepaid expenses and other assets | 1,108 | (1,300 | ) | ||||
Accounts payable and other accrued expenses | (12,286 | ) | 8,934 | ||||
Deferred income taxes | 3,593 | 268 | |||||
Long-term liabilities | (4,540 | ) | (2,139 | ) | |||
Net cash used by operating activities | (11,382 | ) | (8,594 | ) | |||
Cash flows from investing activities: | |||||||
Additions to property, plant, equipment, and software | (1,821 | ) | (1,440 | ) | |||
Proceeds from the disposal of assets | 2 | 51 | |||||
Net cash used in investing activities | (1,819 | ) | (1,389 | ) | |||
Cash flows from financing activities: | |||||||
Payments of long-term debt | (8,000 | ) | — | ||||
Payments of term loan debt | (212 | ) | — | ||||
Payments for debt issuance costs | (172 | ) | — | ||||
Proceeds from the issuance of long term debt | 20,000 | — | |||||
Other | (1 | ) | 14 | ||||
Net cash provided by financing activities | 11,615 | 14 | |||||
Net decrease in cash and cash equivalents | (1,586 | ) | (9,969 | ) | |||
Cash and cash equivalents at beginning of period | 11,869 | 25,387 | |||||
Cash and cash equivalents at end of period | $ | 10,283 | $ | 15,418 | |||
Supplemental disclosure: | |||||||
Cash payments (refunds) for income taxes, net | $ | 27 | $ | (63 | ) | ||
Cash payments for interest expense | $ | 2,119 | $ | 823 | |||
Thomasville Stores (a) | All Other Retail Locations (b) | |||||||||||||||
Three Months Ended | ||||||||||||||||
March 30, 2013 | March 31, 2012 | March 30, 2013 | March 31, 2012 | |||||||||||||
Net sales | $ | 26,905 | $ | 27,458 | $ | 8,435 | $ | 8,033 | ||||||||
Cost of sales | 16,033 | 15,666 | 5,753 | 5,002 | ||||||||||||
Gross profit | 10,872 | 11,792 | 2,682 | 3,031 | ||||||||||||
Selling, general and administrative expenses — open stores | 16,016 | 14,868 | 4,074 | 3,922 | ||||||||||||
Loss from operations — open stores (c) | (5,144 | ) | (3,076 | ) | (1,392 | ) | (891 | ) | ||||||||
Selling, general and administrative expenses — closed stores (d) | — | — | 1,286 | 939 | ||||||||||||
Loss from operations - retail operations (c) | $ | (5,144 | ) | $ | (3,076 | ) | $ | (2,678 | ) | $ | (1,830 | ) | ||||
Number of open stores and showrooms at end of period | 49 | 48 | 15 | 16 | ||||||||||||
Number of closed locations at end of period | — | — | 20 | 23 | ||||||||||||
Same-store-sales (e): | ||||||||||||||||
Percentage change | (2 | )% | — | % | (f) | (f) | ||||||||||
Number of stores | 46 | 44 |
a) | This supplemental data includes company-owned Thomasville retail store locations that were open during the period. |
b) | This supplemental data includes all company-owned retail locations other than open Thomasville stores (“all other retail locations”). |
c) | Loss from operations does not include our wholesale profit on the above retail net sales. |
d) | SG&A - closed stores includes occupancy costs, lease termination costs, and costs associated with closed store lease liabilities. |
e) | The Thomasville same-store sales percentage is based on sales from stores that have been in operation and company-owned for at least 15 months, including any stores that had been opened for at least 15 months but were closed during the period. |
f) | Same-store-sales information is not meaningful and is not presented for all other retail locations because results include retail store locations of multiple brands, including five Drexel Heritage stores, one Henredon store, one Broyhill store, and eight designer showrooms at March 30, 2013; and other than designer showrooms, it is not one of our long-term strategic initiatives to grow non-Thomasville brand company-owned retail locations. |