Transcript Slide 1

Company and Industry Overview
(NYSE:FBN)
Company and Industry in great state of change.
 Manufacturing realignment
• FBN has closed 33 of 59 plants (26 case good, 7 upholstery)
• Industry wide over 50% imports
 Retail realignment
• FBN has shifted retail strategy – more control at retail
• Hundreds of undercapitalized or small retailers out of business
 Competitor realignment
• Discounters expanding the market
• Lifestyle retailers fastest growing segment
Despite changes, industry continues to grow.
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Strategic Direction
(NYSE:FBN)
Furniture Brands is leading this change and has developed a new mission:
The Company's mission is
to fulfill the consumer’s highest expectations
in the home furnishings experience
through the promise of our Brands
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Brand Differentiation
(NYSE:FBN)
We must differentiate our brands and make them more relevant to the
furniture consumer.
 Broyhill
• Massive product development cycle to bring values in line
• Most powerful brand within competitive segment
 Lane
• World’s leader in motion upholstery due to innovative design
 Thomasville
• Accessory program designed to generate transactional events
 Drexel Heritage
• Lifestyle presentation and customization/design services
 Henredon
• Powerful licensing partners
 Maitland-Smith
• Extraordinary design
• Service initiatives and in-stock position
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Distribution Strategy
(NYSE:FBN)
We ensure proper distribution of our branded products through an
intelligent focus on both dedicated and traditional distribution.
 Single Brand Stores primary method of distribution for Thomasville
and Drexel Heritage
• New Thomasville prototype appeals to more customers
- Offers full design as well as transactional accessories
 Lane and Broyhill focus on galleries and other traditional distribution
 Percentage of our product sold through dedicated channels is 44%
 Set to open 29 stores and 165 galleries in 2006
 In our stores, sales per square foot 50 - 70% advantage over
traditional distribution
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Sourcing and Logistics
(NYSE:FBN)
We continue to shift the sourcing of our products to lower cost options, and
optimize distribution and warehousing.
 Create competitive advantage by implementing a world class
sourcing supply chain
• Enhanced service to consumer
• Leverage size
• Speed to market
• Inventory control
 Centralized supply chain solution
• Single freight forwarder and customs broker
• Single forecasting and replenishment system
• Best practice and central leadership
• West Coast distribution center in second half 2006
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Cost Structure
(NYSE:FBN)
We must leverage our size to minimize costs by consolidating back-office
functions and maximize our purchasing power.
 Consolidate back-office operations of our high-end brands, HDM.
• $10 - $12 million in annual savings
 We have implemented best practice and cost savings
• Medical benefits
• Retirement benefits
• Purchasing
• Retail development
 We are pursuing best practice and cost savings initiatives
• Information technology
• Risk management
• Payroll
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Management Structure
(NYSE:FBN)
We are developing the quality of our management team to create an
organization that drives results.
 New managers introducing new management systems and processes
 New managers are from world class companies in varied industries and reflect
and understand our consumer base
 Combination of industry talent and new managers from varied industries
makes for a more productive leadership team
 We are developing a comprehensive development and succession program to
ensure the future leaders of Furniture Brands come from within
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Financial Overview
(NYSE:FBN)
We issued our mid-quarter update on Wednesday, June 7, 2006.
 Seasonally challenging period, nevertheless sales and earnings
are tracking ahead of last year
 Improving gross margins with higher utilization and imported product
 Improving EBIT margins – plan for 7.5% – 8% EBIT in 2008
Strong cash flow
• Dividend – increased 7% in January 2006
• Share repurchase – 4.1 million shares in 2005
• 1 million (+) shares repurchased YTD in 2006
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Summary
(NYSE:FBN)
With the proper execution of our sound strategic plan, we are in a strong
position to grow this company.
We have:
 a strategic plan that is substantive and imaginative
 a stable of exceptional brands
 a growing system of dedicated retail space that is serving the
consumer and building our brands
 strong offshore manufacturing relationships
 the leverage of size in a highly fragmented industry
 strong cash flow generation
 a strong and cohesive management team
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