Furniture Brands International CEO Discusses Q1 2011 - Earnings Call Transcript
On the retail side of our business, the 46 Thomasville stores that we have operated for more than 15 months showed a same-store sales increase of 17% this quarter. This is the fifth straight quarter of double digit comp store growth in our own Thomasville stores. Part of this increase and the marketing spend mentioned earlier was directed to the Thomasville brand and is helping fuel the momentum of the business.
Focusing for a moment on what has been the high occupancy cost of some of these stores, we have said that as their leases expire we will evaluate our options for each store on a case-by-case basis. In most cases, we will relocate and resize these stores to achieve a more favorable cost structure. For example, during the quarter we held close-out sales in preparation for three store closings as these stores did not meet our performance criteria. One of these stores will be relocated in the Dallas market as we announced earlier. We will open an additional new Thomasville store in Chicago during the second quarter and continue to look for the right store opening opportunities throughout the remainder of the year.
Inventory at quarter end was $256 million versus 231 in the first quarter of 2010 and 250 million at year-end 2010. We expect to end this year with inventory levels flat to slightly below 2010 year-end levels. Cash at quarter end totaled $41 million and debt totaled 77, for a quarter-ending net debt balance of 36 million.
In April, we successfully refinanced our asset-based loan agreement. The renewed facility is now $250 million in size, which is adequate for both our current and expected future funding needs. It has a five-year maturity and increases our borrowing availability by $33 million versus the former facility to a total availability currently estimated at about $51.5 million. The new facility has several variable interest rate options. The option we typically choose is a LIBOR-based borrowing option which is now LIBOR plus 2.75% versus the old spread of LIBOR plus 1.5%. In addition, the pension funding covenant has been changed from a specific dollar requirement to a more flexible requirement that matches the plan’s regulatory minimum contribution amounts.Read the rest of this transcript for free on seekingalpha.com
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