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Furniture Brands International Inc., the maker of Lane and Broyhill pieces, squeezed a bigger per-share profit from smaller sales.

In an unusual step, the company released preliminary first-quarter results. The final results won’t be released until May 1, according to financial news service Bloomberg.

According to preliminary results, the Clayton-based company’s earnings per share rose to between 7 cents and 8 cents for the first quarter ending March 31, compared with 3 cents in the first quarter of 2007.

However, revenue showed the effects of a "challenging retail environment." Net sales were $477 million, down 14.4 percent from the same period a year before, when Furniture Brands took in $557 million. The results were from continuing operations.

"The strategic plan the company unveiled last fall continues to drive improved performance," said Chief Executive Ralph Scozzafava in a statement. The company remains "on track" to earn between 40 cents and 60 cents per share for the full year, he said.

Also on Friday, Scozzafava fired another salvo against the company’s No. 2 shareholder, Sun Capital Partners of Boca Raton, Fla. The private investment group has expressed interest in buying the company and has mounted a proxy fight, seeking three seats on Furniture Brands’ board.

"Sun Capital’s actions have been expensive and distracting for your company," Scozzafava told shareholders in a letter Friday. "We knew that at the outset, and we have consistently attempted to reach accommodation on their positions. These attempts have been rejected."

Scozzafava said the company has offered Sun Capital the opportunity to add a single, independent board member. That, he said, would provide Sun Capital with representation proportionate to its investment free credit report.com. But Sun would have to "refrain from publicly disparaging Furniture Brands" and not repeat the proxy contest for more than a year. The offer was denied, Scozzafava said.

"We believe Sun Capital clearly seeks critical mass on our board in order to advance its self-serving agenda," he wrote.

The drama is playing out against the backdrop of a shrinking U.S. furniture industry. New orders of residential furniture dropped 5 percent year over year in January after 8 percent declines in both November and December, according to a survey of manufacturers and distributors by Smith Leonard PLLC, a High Point, N.C., consulting group.

"Overall, business is just not that good," Ken Smith, the firm’s managing partner, wrote recently in a furniture newsletter.

Furniture Brands lost money last year and had to negotiate through a violation of debt covenants. It is trying to strengthen its balance sheet while reducing "unproductive" discounts. The company said its cash at the end of the quarter totaled about $188 million, compared with long-term debt of $235 million.

Furniture Brands expects to cut costs for payroll administration, human resources, IT and travel across its various subsidiaries and save $40 million to $50 million per year.

"Despite a weak home furnishings market, affected by the housing downturn, we believe (Furniture Brands’) new management is realigning its businesses to take advantage of the company’s premium brands, new product releases, more efficient supply chain and shift to Asian manufacturing," Standard & Poor’s told clients Friday in a research note.

jmcwilliams@post-dispatch.com

314-340-8372

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