Furniture Brands’ fourth-quarter sales drop; profit turns to loss

Furniture Brands International Inc., the Clayton-based seller of Lane, Broyhill and Thomasville pieces, on Wednesday night reported a drop in fourth-quarter sales and a nearly $42 million loss.

Forecasting a further drop in sales this year, the company said it would slash its 16-cent quarterly dividend down to 4 cents and reinvest available cash back into the business.

Net sales for the quarter ended Dec. 31 $504.8 million, an 11.9 percent drop from $572.8 million a year before. The company’s net loss from continuing operations was $41.8 million, down from $1 million earned in the same quarter of the prior year.

The company lost 86 cents per diluted share in the quarter, compared to profits of 2 cents a share in the fourth quarter of 2006.

“At our Investor Conference in October we unveiled the major elements of our new strategic direction, which we are executing aggressively,” said chief executive Ralph Scozzafava, in a statement that mentioned building the company’s brands and developing talent inside the organization, among other initiatives. “Many of these initiatives have involved implementation costs and other effects that have negatively impacted our results in the fourth quarter and the full year 2007.”

Scozzafava said the company has completed a number of previously announced moves, such as closing 18 company-owned stores, shutting five manufacturing facilities, cutting staff at Lane, Thomasville, Drexel Heritage and Henredon, and slashing inventory. He said the changes were costly in the quarter but will “improve results going forward.”

Net sales for the full year of 2007 were $2.1 billion, compared with $2.4 billion for the full year of 2006, a decrease of 11.8 percent. Net loss from continuing operations in 2007 was $51.2 million, down from $49.9 million of earnings in 2006.

The company’s loss on continuing operations in 2007 was $1.06 per diluted share, compared to diluted net earnings per common share of $1.02 in 2006.

Furniture Brands, which Scozzafava said focused on cash flow last year, could claim some successes. the company said it cut its year-end inventory by $100 million, or 20 percent in one year. It claimed the highest level of year-end cash and lowest year-end debt since 1992.