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Furniture Brands' CEO Discusses Q4 2011 Results - Earnings Call Transcript

I need to remind you that certain comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Our actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside of our control.

Please refer to our SEC filings, including our Form 10-Qs and Form 10-Ks for discussion of the major risks and uncertainties that may affect our business. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update our forward-looking statements.

If you do not have a copy of today’s press release, you may obtain one, along with copies of the prior press releases and past SEC filings by linking through to the Investor Relations page of our website, furniturebrands.com.

Now on to our financial results. As reported in this morning’s press release, total sales were $255.5 million for the fourth quarter, a decrease of 7.4% over the same period last year. For the full year sales were $1.1 billion -- $1.11 billion, down 4.5% from the $1.16 billion in sales reported in 2010.

Gross profit for the fourth quarter of 2011 was $58.8 million and gross margin was 23%, up from $50.1 million in gross profit and 18.1% in gross margin in the fourth quarter of last year. The increase in fourth quarter 2011 gross margin was primarily due to $10.3 million of lower expenses related to restructuring activity, compensation and benefits, and a $6.2 million decrease in inventory charges, partially offset by higher raw material costs of almost $5 million.

For the full year, gross profit was $267.3 million and gross margin was 24.1%, as compared to $276.3 million in gross profit and 23.8% in gross margin in 2010. The increase in full year 2011 gross margin was primarily due to lower expenses of $15 million related to restructuring activities, compensation and benefits, partially offset by higher raw material costs of $14 million.

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