Furniture Brands International (FBN) announced today its financial results for the second quarter and first half of 2004.

Net sales for the second quarter of 2004 were $575.7 million, compared with $579.6 million in the second quarter of 2003, a decrease of 0.7%. Net earnings for the second quarter were $16.6 million as compared to $23.6 million in the second quarter of last year, a decrease of 29.6%. Diluted net earnings per common share for the second quarter were $0.30 as compared to $0.42 in the second quarter of last year, a decrease of 28.6%.

Included in the 2004 second quarter net earnings were restructuring and asset impairment charges totaling $2.3 million attributable to the Drexel Heritage plant closings announced in January. Also included in the 2004 second quarter net earnings was a charge of $5.3 million ($8.3 million before income tax benefits) or $0.09 per diluted common share to reflect the loss of collectibility of the receivable due from Breuners Home Furnishings Corporation, which filed for bankruptcy protection shortly after the quarter ended.

W. G. (Mickey) Holliman, Chairman and Chief Executive Officer, commented: "In the first quarter of this year we reported record sales and net earnings, and we exceeded our budgeted expectations. However, in the second quarter, beginning in late-April, we began returning to the same soft business environment that has characterized the residential furniture industry since mid-2000. Business remained comparatively strong at our upper-end companies (Thomasville, Henredon, Drexel Heritage and Maitland-Smith). Continuing weakness in the middle-price companies (Broyhill and Lane), however, brought overall sales down to nearly flat on a year-over-year basis. Our earnings performance was also affected by these soft business conditions. Excluding the charge attributable to the Breuners receivable, diluted net earnings per common share would have been at the upper end of the earnings guidance we provided in early June.

Mr. Holliman concluded, "Although orders in the first quarter of 2004 were up 8.4% over the first quarter of 2003, orders in the second quarter of 2004 were off 2.7% against the prior year. In addition, while Broyhill and Lane are moving forward to replace the Breuners volume, which was approximately $42 million in 2003, we have reduced our sales expectations for the third and fourth quarters to reflect the loss of some of this business. We currently expect sales to be flat in the third quarter and diluted net earnings per common share in the $0.34 to $0.38 range. As has been our practice, we will provide an update on our third quarter expectation in early September."