announced its financial results for the first quarter ended March 31, 2010.
Net sales for the 2010 first quarter were $322 million, a sequential increase of 12.9% from the fourth quarter of 2009 and a decline of 9.7% from the first quarter of 2009. For the 2010 quarter, Furniture Brands reported net income of $3.5 million, or $0.07 per diluted share, compared to a loss of $4.2 million or $0.09 per diluted share in the 2009 quarter. Gross margin for the first quarter of 2010 was 26.2% compared to 22.5% in the first quarter of 2009.
"Furniture Brands' improved financial performance reflects the strategic actions taken to strengthen the balance sheet, build our brand power, win with customers, and deliver operational excellence," said Chairman and Chief Executive Officer Ralph P. Scozzafava. "This transformation of Furniture Brands over the past two years has positioned the company to compete better in a weak retail environment, and today's financial results are clear evidence that our hard work is gaining traction.
"The sequential increase in top-line sales reflects the momentum that our new product offerings are creating in the marketplace. We are consistently gaining floor placements with our retail partners, and consumers are responding favorably to our tested products," Mr. Scozzafava said.
"Our gross margin for the quarter improved 370 basis points versus the first quarter of 2009. More than half of this improvement was due to our supply chain initiatives, including lean implementation, cellular manufacturing, productivity gains, and fewer plant down days. We are in the process of completing our lean and cellular manufacturing and have the potential for further productivity gains in our supply chain going forward," Mr. Scozzafava said.
First-quarter 2010 retail sales at the 65 company-owned stores totaled $35.6 million with a gross margin of 42.3% compared to sales of $29.8 million and gross margin of 39.9% at the 62 stores the company owned during the first quarter of 2009. First-quarter 2010 same-store sales at the 40 Thomasville stores that the company has owned for more than 15 months showed an increase of 16% from the first quarter of 2009.
Selling, general, and administrative costs for the 2010 first quarter totaled $79.9 million compared to $83.2 million in the first quarter of 2009. "We've been very focused on driving both effectiveness and efficiency as we moved to our shared services model. We've been able to reduce our administrative cost base substantially over the past two years and we continue to pursue additional improvement through further company-wide initiatives," Mr. Scozzafava said.
At March 31, 2010, net debt* was $17 million compared to net debt of $97 million at March 31, 2009. On April 12, the company received $57 million of an anticipated federal tax refund, resulting in a net cash position of $37 million.
"Furniture Brands' strong balance sheet provides the needed liquidity to support increased working capital demands as we focus on driving our top-line sales while improving gross margin," Mr. Scozzafava said. "We have much work to do and clearly understand that increasing our revenues is a top priority that will enable us to fully leverage our improved cost structure to deliver solid results."
About Furniture Brands: Furniture Brands International (NYSE: