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

SG&A expenses totaled $69 million for the fourth quarter, compared to $94.5 million in the fourth quarter of 2010. The decrease in fourth quarter SG&A was primarily due to a $10.2 million reduction in expenses related to restructuring, compensation and benefits, a $7.8 million reduction in non-working marketing and sales expenses, a $3 million reduction in bad debt expense, and $3.1 million of higher gains on facility and asset sales.

On a full year basis SG&A totaled $302.9 million, as compared to $320.2 million in 2010. The decrease in SG&A on a full year basis was primarily due to a $14.6 million reduction in expenses related to restructuring, compensation and benefits, a $3.1 million reduction in non-working marketing and sales expenses, a $1.8 million reduction in bad debt expense, a $1.1 million reduction in vacant facility costs and $1.5 million of higher gains on facility and asset sales, partially offset by $4.4 million in favorable settlement of certain international tax and trade compliance matters that took place in 2010.

Last quarter we spoke to you about $30 million in new annualized cost savings, about 70% of which will be realized in the SG&A line. We realized only a partial benefit from the $30 million in savings in the fourth quarter of 2011, but beginning with the first quarter of 2012, we expect the quarterly base SG&A run rate of $73 million to $77 million to fully reflect the impact of these cost savings. This base SG&A run rate may increase or decrease depending on changes such as brand support activities and incentive compensation accruals.

On a retail side of our business the 44 Thomasville stores we’ve operated for more than 15 months showed a same-store sales decrease of 4% this quarter, following a 15% same-store sales increase in the fourth quarter of 2010.

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