furniture brands internatial: modeFinance Credit Report

If you want to know more, ASKMORE TM

modeFinance’s credit report.

Almost every day millions of peoplearound the world are wondering the realcreditworthiness of the companies withwhich they are in business. Every daythese questions remain unanswered.modeFinance

TM

now aims to answer thesequestions in a simple, complete andimmediate way.

ASKMORETM

is the modeFinanceTM

product which gives the chance toevaluate the credit risk for every companyfrom all around the world.

ASKMORETM plans 3 types of reports:

s-peek Basic Plus

ASKMORETM

Basic:This report includes modeFinance TM

’ sMORE Credit Ratings and MORE CreditLimit to help you in the decision making.It covers all essential information includingfinancial statements of the last three yearsand descriptive information including tradedescription and sector analysis.This report type is ideally suited fordecisions on transactions with each levelof credit risk.

modeFinanceTM HeadquarterBuilding A - AREA Science ParkPadriciano 99 - 34149 Trieste - ItalyPh.: +39 040 375 5337Fax: +39 040 375 [email protected]

askMORETM is a registered mark of modeFinanceTM

FURNITURE BRANDSINTERNATIONAL INCTuesday, 10 September 2013

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name FURNITURE BRANDS INTERNATIONAL INC

Identification number

Country United States of America

ZIP code and city 63105 - ST. LOUIS

Address 1, NORTH BRENTWOOD BOULEVARD

+1 314 863 1100

www.furniturebrands.com

[email protected]

Legal form

Account Consolidated

Incorporation date 16/03/1921

NACE 2 Sector 3109 - Manufacture of other furniture

Listed

Status Active

MORE Credit limit 3,100,000 e

Black records Available on request

29/12/2012 31/12/2011 31/12/2010

Turnover (th e) 813,465 856,066 867,631

Rating CCC CCC B

Probability of default 17.11% 9.35% 4.44%

Confidence Level 100% 100% 100%

Solvency ratios

Leverage ratio 3.72 1.96 1.08

Financial Leverage 0.69 0.31 0.20

Total asset/Total liabilities 1.10 1.27 1.62

Liquidity ratios

Current Ratio 2.28 2.67 3.03

Quick Ratio 0.86 1.03 1.26

Cash Cycle Ratio 39.00 25.00 29.00

Profitability ratios

Return on investement ROI (%) -7.01 -6.99 -6.62

Return on equity ROE (%) -31.19 -17.76 -10.14

Asset turnover 1.73 1.80 1.71

Gross Profit/Operating revenue 0.25 0.26 0.26

Interest Coverage ratios

EBIT interest coverage ratio -4.95 -8.73 -9.26

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio 3.72 0.62 1.62 2.79 11.45

Financial Leverage 0.69 0.04 0.58 1.46 6.35

Total asset/Total liabilities 1.10 2.58 1.62 1.27 1.05

Liquidity ratios

Current Ratio 2.28 2.25 1.58 1.41 0.96

Quick Ratio 0.86 1.70 1.09 0.83 0.46

Cash Cycle Ratio 39.00 -17.00 -7.00 2.00 6.00

Profitability ratios

Return on investement ROI (%) -7.01 12.60 4.88 1.67 -7.10

Return on equity ROE (%) -31.19 14.80 7.79 -0.52 -105.30

Asset turnover 1.73 1.42 1.44 1.20 1.39

Gross Profit/Operating revenue 0.25 0.28 0.23 0.19 0.14

Interest Coverage ratios

EBIT interest coverage ratio -4.95 112.50 4.64 0.76 -3.80

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 83 33 43 52 56

Days Sales Outstanding (DSO) 43 50 55 53 63

Days Payable Outstanding (DPO) 39 26 34 43 41

Cash Conversion Cycle (DIO + DSO - DPO) 87 61 64 73 68

Numer of analyzed companies - 127 256 203 27

(Average) Rating CCC A BB B CC

The sector has been chosen according to:

international companies in the sector NACE 2 3109 with financial data of year 2012.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 29/12/2012 31/12/2011 31/12/2010

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7586 0.77286 0.748

Number of months 12 12 12

Total assets 469,149 474,918 505,957

Fixed assets 170,847 188,183 186,238

Intangible fixed assets 57,733 59,903 64,708

Tangible fixed assets 78,442 89,499 93,400

Other fixed assets 34,672 38,781 28,130

Current assets 298,303 286,735 319,719

Stocks 185,351 176,331 186,769

Debtors 95,386 83,448 85,672

Other current assets 17,566 26,955 47,278

Cash & cash equivalent 9,004 19,621 38,869

Shareholders funds 41,570 102,234 194,156

Capital 6,569 46,847 45,340

Other shareholders funds 35,001 55,388 148,816

Total liabilities 427,580 372,683 311,801

Non current liabilities 296,849 265,137 206,281

Long term debt 79,653 59,510 57,596

Other non-current liabilities 217,196 205,627 148,685

Current liabilities 130,730 107,546 105,520

Loans 0 0 0

Creditors 86,169 66,159 59,725

Other current liabilities 44,561 41,387 45,795

Total shareh. funds & liab. 469,149 474,918 505,957

NET DEBT (th e) 29/12/2012 31/12/2011 31/12/2010

Short term debts 0 0 0

Long term debt 79,653 59,510 57,596

Cash & cash equivalent 9,004 19,621 38,869

Net debt 70,649 39,889 18,727

29/12/2012 31/12/2011 31/12/2010

Working capital 194,567 193,621 212,716

Net Current Assets 167,572 179,188 214,200

29/12/2012 31/12/2011 31/12/2010

Days Sales Of Inventory (DIO) 83 75 79

Days Sales Outstanding (DSO) 43 36 36

Days Payable Outstanding (DPO) 39 28 25

Cash Conversion Cycle (DIO + DSO - DPO) 87 83 90


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Income Statement

INCOME STATEMENT (th e) 29/12/2012 31/12/2011 31/12/2010

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7586 0.77286 0.748

Number of months 12 12 12

Sales 813,465 856,066 867,631

Revenues growth (%) -5 -1 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized0 0 0

Operating revenue / turnover 813,465 856,066 867,631

Total operating costs 834,798 880,160 889,604

Costs growth (%) -5 -1 -

Service costs - - -

Material costs - - -

Costs of employees - - -

EBITDA -5,898 -218 -3,310

Depreciation 15,435 23,876 18,663

EBIT -21,333 -24,094 -21,973

Financial P/L -15,871 -11,885 -13,871

Financial revenue 532 618 1,023

Financial expenses 16,402 12,503 14,894

Interest paid 4,310 2,761 2,373

P/L before tax -37,204 -35,979 -35,844

Extr. and other P/L - - -

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L - - -

Taxation -1,346 -2,166 -6,653

P/L for period -35,858 -33,813 -29,191

29/12/2012 31/12/2011 31/12/2010

Costs of Good Sold 613,243 630,032 639,762

Gross Profit 200,222 226,034 227,868

Other Operating Expenses 221,555 250,128 249,842

29/12/2012 31/12/2011 31/12/2010

Cash flow -20,423 -9,937 -10,528

Added value - - -

29/12/2012 31/12/2011 31/12/2010

Number of employees 9,100 8,800 8,900


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Evolutions and trends


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Qualitative information

Full overview The company is engaged in the design, manufacture, and sale of home furnishings in the United States and

internationally. It was founded in 1836 and is headquartered in St. Louis, Missouri. The company is one of the

world’s largest furniture manufacturers. Its products include dining room and living room furniture, metal and

glass tables, home entertainment centers and home office furniture, motion furniture and sleep sofas, stationary

upholstery products, as well as decorative accessories and accent pieces. The company markets its products under

the Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Hickory Chair, Pearson, Laneventure, Maitland - Smith,

and Creative Interiors names. The company has trade showrooms located in Thomasville and High Point, North

Carolina; Atlanta, Georgia; Chicago, Illinois; Las Vegas, Nevada; and Tupelo, Mississippi.

History Not available.

Primary business line Engaged in the design, manufacture, and sale of home furnishings in the United States and internationally.

Secondary business line Not available.

Main activity Manufacturing.

Secondary activity Not available.

Main products and services Dining room and living room furniture, metal and glass tables, home entertainment centers and home office

furniture, motion furniture and sleep sofas, stationary upholstery products, decorative accessories, accent pieces.

Size estimate One of the world’s largest furniture manufacturers.

Strategy, organization and policy Not available.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Broyhill; Lane; Thomasville; Drexel Heritage; Henredon; Hickory Chair; Pearson; Laneventure; Maitland - Smith;

Creative Interiors.

Main domestic country United States of America.

Main foreign countries or regions Not available.

Main production sites St. Louis.

Main distribution sites Not available.

Main sales representation sites Not available.

Main customers Not available.


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Black records

Available on request.

Auditor/Advisor/Bank

name type address

KPMG LLP Auditor -

American Stock Transfer & Trust Transfer Agent -

Board

name date of birth nationality function

Mr Ralph P Scozzafava - - CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE Officer; Chief Executive

Officer - Chief Executive Officer

Mr Ira David Kaplan 29/08/1958 United States of

America

Independent Director

Mrs Ann S Lieff - - Independent Director

Mr Aubrey B Patterson 1943 United States of

America

Lead Independent Director

Mr George E Ross - - Independent Director

Shareholders (the first twenty shareholders ordered by Direct %)

SAMSON HOLDING LTD Rating: BBB

Country ISO code KY Operating Revenue (MIL $) 434.27

NACE Rev. 2, Core code - Total Assets (MIL $) 715.92

Direct % 12.82 Number of Employees 8000

Total % n.v. Information date 03/2013

Address : Not available


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DIMENSIONAL FUND ADVISORS LP via its funds Rating: BB

Country ISO code US Operating Revenue (MIL $) 36.72


Direct % - Number of Employees 260

Total % 5.46 Information date 03/2013


OAKTREE CAPITAL MANAGEMENT, L.P. via its funds Rating:


NACE Rev. 2, Core code - Total Assets (MIL $) -




LEGG MASON INC via its funds Rating: B






HOTCHKIS AND WILEY CAPITAL MANAGEMENT LLC via its funds Rating:






VANGUARD GROUP, INC. THE via its funds Rating:






BLACKROCK, INC. via its funds Rating: BB

Country ISO code US Operating Revenue (MIL $) 9337

NACE Rev. 2, Core code - Total Assets (MIL $) 200451




PRESCOTT GROUP CAPITAL MANAGEMENT, L.L.C. via its funds Rating:







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PERRITT CAPITAL MANAGEMENT, INC. via its funds Rating:






TAHITHROMOS LLC via its funds Rating:

Country ISO code US Operating Revenue (MIL $) -





COOPER CREEK PARTNERS MANAGEMENT LLC via its funds Rating:






WILLIAM BLAIR & COMPANY LLC via its funds Rating: BB






SCOZZAFAVA RALPH P Rating:

Country ISO code n.v. Operating Revenue (MIL $) -


Direct % 0.79 Number of Employees -



STATE OF CALIFORNIA via its funds Rating:



Direct % - Number of Employees -



INVESCO LTD via its funds Rating: A

Country ISO code BM Operating Revenue (MIL $) 4135.3






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TRUE BEARING ASSET MANAGEMENT LP via its funds Rating:






D. E. SHAW & CO. LP via its funds Rating:






BRIDGEWAY CAPITAL MANAGEMENT INC via its funds Rating:






Y/CAP MANAGEMENT LLC via its funds Rating:






FIRST DALLAS HOLDINGS INC via its funds Rating:






Subsidiaries (the first twenty subsidiaries ordered by Direct %)

ACTION TRANSPORT, INC. Rating:



Direct % MO Number of Employees 200



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BROYHILL FURNITURE INDUSTRIES, INC. Rating:





BROYHILL HOME FURNISHINGS, INC. Rating:



Direct % MO Number of Employees -


BROYHILL RETAIL INC Rating:





DECORATIVE HARDWARE SOLUTIONS (L) BHD Rating:

Country ISO code MY Operating Revenue (MIL $) -




FAYETTE ENTERPRISES LLC Rating:





FURNITURE BRANDS (HANGZHOU) CO LTD Rating:

Country ISO code CN Operating Revenue (MIL $) -




FURNITURE BRANDS ASIA LTD Rating:

Country ISO code HK Operating Revenue (MIL $) -




FURNITURE BRANDS CANADA ULC Rating:

Country ISO code CA Operating Revenue (MIL $) -





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FURNITURE BRANDS DE MEXICO S DE RL DE CV Rating:

Country ISO code MX Operating Revenue (MIL $) -




FURNITURE BRANDS HOLDINGS INC Rating:





FURNITURE BRANDS OPERATIONS INC Rating:





FURNITURE BRANDS RESOURCE COMPANY INC Rating:





FURNITURE BRANDS RETAIL OPS IN Rating:





HDM FURNITURE INDUSTRIES, INC. Rating:





HDM RETAIL INC Rating:

Country ISO code US Operating Revenue (MIL $) 6



Total % MO Information date 12/2012

LANE FURNITURE INDUSTRIES, INC. Rating:






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LANE HOME FURNISHINGS RETAIL, INC. Rating:





MAITLAND SMITH ASIA HOLDINGS LIMITED Rating:

Country ISO code VU Operating Revenue (MIL $) -




MAITLAND SMITH EXPORT (L) BHD Rating:

Country ISO code MY Operating Revenue (MIL $) -





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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong.

AA The company has very strong creditworthiness.

A The company has a high solvency.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate.

BB The companyï¿ 12

s performances are adequate considering the sector and the country in which it is operating.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals.

CCCThe company has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals.

CC

Risky

The company shows signals of high vulnerability.

C The company shows considerable pathological situations.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or

more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s

database etc.

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

Products MORE rating

Where AREA Science Park

34149 Trieste, via Padriciano 99 - ITALY

Info [email protected]

web www.modefinance.com

Phone +39 040 3755337

Documents

furniture brands internatial: modeFinance Credit Report