Lower volume at Broyhill combined with raw material price increases across all our Brands contributed to the year over year earnings decline.
W. G. (Mickey) Holliman, Chairman and Chief Executive Officer

Furniture Brands International (FBN) announced its financial results for the fourth quarter and full year ended December 31, 2005.

Net sales for the fourth quarter of 2005 were $593.5 million, compared with $602.0 million in the fourth quarter of 2004, a decrease of 1.4%. Net earnings for the fourth quarter were $17.1 million, down from $22.3 million reported for the fourth quarter of last year. Diluted net earnings per common share were $0.34 as compared to $0.42 in the fourth quarter of last year.

Operating Results - Full Year 2005
Net sales for the full year of 2005 were $2,386.8 million, compared with $2,447.4 million for the full year of 2004, a decrease of 2.5%. Net earnings for the full year were $61.4 million, or $1.18 per diluted common share as compared to $91.6 million, or $1.66 per diluted common share for the full year 2004.

W. G. (Mickey) Holliman, Chairman and Chief Executive Officer, commented: "We continue to see a difference in revenues across our Brands. Weakness at Broyhill was partially offset by revenue increases at Thomasville and revenues were essentially flat at Lane and HDM. Lower volume at Broyhill combined with raw material price increases across all our Brands contributed to the year over year earnings decline. The combined effect of these was partially offset by selected price increases and ongoing cost savings programs.

"Our most recent earnings update contemplated 8 cents of restructuring and asset impairment charges in the fourth quarter. Our actual restructuring and asset impairment charges were lower than we expected because we sold two manufacturing facilities late in the quarter intact as opposed to liquidating them.

"In the longer-term, we continue to pursue the strategies that will drive both growth and profitability across the company. Our senior management team is focused on building our Brands through aggressive marketing, product development and consumer research. The consolidation of back office and manufacturing operations of our high-end brands is on plan; our logistics and supply chain, procurement, and retail development processes are being streamlined across all our Brands."

Mr. Holliman continued, "We continue to generate strong cash flow from operations. During the fourth quarter we repurchased 1.5 million shares of our common stock at an average cost of $19.81. This represents the largest number of shares repurchased in a single quarter since we began the repurchase program in January of 2004. For the full year 2005 we repurchased 4.1 million shares of our common stock at an average cost of $20.04. We expect to remain in the market buying stock on an opportunistic basis using available free cash flow."

Mr. Holliman concluded, "With respect to the first quarter, orders are tracking up in the first three weeks of the period. We currently expect net sales for the quarter to be up in the low single digits versus the year ago period and net earnings to be in the 43 to 47 cent range, which includes the effect of 2 cents in previously disclosed restructuring, asset impairment and severance charges. As is our practice, we will provide an update on our first quarter expectations in early March."