Furniture Brands International posted a 4% sales decline and a $40.8 million net loss in its second quarter, and said it's working to reduce costs, pursue asset sales, and modify its credit facilities.
The manufacturer and retailer attributed much of the loss to $29.3 million in charges, including $26.9 million in impairment charges to write down the value of assets including software and trade names.
"Our financial performance in the second quarter was below our expectations," Furniture Brands Chairman and CEO Ralph Scozzafava said in a statement. "Continued solid top and bottom line performance of our designer brands and improving sales at our Thomasville-owned retail stores were once again significantly overshadowed by the challenges we are facing in stabilizing sales and profitability in our wholesale business."
Sales of $255 million in the quarter were down from $265.5 million in the same quarter a year earlier. The $40.8 million net loss, which amounted to $5.15 per share, compared with a loss of $6.8 million or 86 cents per share in the 2012 second quarter.
Sales at the 49 company-owned Thomasville stores were $26.4 million, compared with $25.6 million at 48 company-owned stores a year earlier. Same-store sales were up 4.5%.
The company said its operating loss from retail sales in the quarter was $10.6 million, compared with a $7.3 million loss a year ago. The loss doesn't include the wholesale profit on the retail sales.
"As a result of the challenges we continue to face, we are conducting a thorough strategic review of our business and have engaged outside advisors to assist us in this effort," Scozzafava said. "The scope of this effort encompasses achieving further cost reductions, pursuing asset sales and modifying our credit facilities in order to improve our liquidity."
The company said it ended the quarter with $8.8 million in cash and $117.7 million in long-term debt. Furniture Brands also has $208.7 million in pension liability.
