2. Forward Looking Statements
Statements in this presentation that are not strictly historical, including statements as to plans,
outlook, objectives, and future financial performance, are quot;forward-lookingquot; statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Words such as “anticipate,” “believe,” “could,” “confident,” “estimate,” “expect,” “forecast,”
“hope,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,”
“would,” and variations of such words and similar expressions identify forward-looking statements.
Forward-looking statements involve known and unknown risks, which may cause the Corporation's
actual results in the future to differ materially from expected results. These risks include, without
limitation: the Corporation's ability to realize financial benefits from its (a) price increases, (b) cost
containment and business simplification initiatives for the entire Corporation, (c) investments in
strategic acquisitions, new products and brand building, (d) investments in distribution and rapid
continuous improvement, (e) ability to maintain its effective tax rate, and (f) consolidation and
logistical realignment initiatives; uncertainty related to the availability of cash and credit, and the
terms and interest rates on which credit would be available, to fund operations and future growth;
lower than expected demand for the Corporation's products due to uncertain political and economic
conditions, including the current credit crisis, slow or negative growth rates in global and domestic
economies and the protracted decline in the domestic housing market; lower industry growth than
expected; major disruptions at key facilities or in the supply of any key raw materials, components or
finished goods; uncertainty related to disruptions of business by terrorism, military action, acts of God
or other Force Majeure events; competitive pricing pressure from foreign and domestic competitors;
higher than expected costs and lower than expected supplies of materials (including steel and
petroleum based materials); higher than expected costs for energy and fuel; changes in the mix of
products sold and of customers purchasing; relationships with distribution channel partners, including
the financial viability of distributors and dealers; restrictions imposed by the terms of the Corporation’s
revolving credit facility, term loan credit agreement and note purchase agreement; currency
fluctuations and other factors described in the Corporation's annual and quarterly reports filed with
the Securities and Exchange Commission on Forms 10-K and 10-Q. The Corporation undertakes no
obligation to update, amend, or clarify forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by applicable law.
2
3. Non-GAAP Financial Measures
This presentation contains certain non-GAAP financial measures. A quot;non-
GAAP financial measurequot; is defined as a numerical measure of a company's
financial performance that excludes or includes amounts different than the
most directly comparable measure calculated and presented in accordance
with GAAP in the statements of income, balance sheets or statements of cash
flow of the company. Pursuant to the requirements of Regulation G, the
Corporation has provided a reconciliation of non-GAAP financial measures to
the most directly comparable GAAP financial measure.
The non-GAAP financial measures used within this presentation are: (i) gross
profit excluding restructuring and impairment charges and transition costs and
(ii) other selling, general and administrative expense excluding freight and
distribution expense, restructuring and impairment charges and transition
costs. These measures are presented because management uses this
information to monitor and evaluate financial results and trends. Management
believes this information is also useful for investors.
3
5. 1st Quarter Results
% change %
Income Statement 1Q09 1Q08 $ change Pt Change Comments
Net Sales 405.7 563.4 (157.7) -28.0% Acquisitions contributed $10M or 1.8% of add'l sales. Organic growth $(167.9)M; -29.8% .
Non-GAAP Gross Profit 124.7 188.3 (63.6) -33.8%
(excluding restructuring & impairment and
transition costs)
% of Net Sales 30.7% 33.4% -2.7% pts Decrease in margin primarily due to lower volume.
Restructuring and impairment - 0.4 (0.4) -100% 1Q08 included $0.4 million of accelerated depreciation related to transitioning production to other
office furniture facilities.
Transition costs - 3.9 (3.9) -100% 1Q08 included $3.9 million of transition costs not classified as restructuring costs related to
transitioning production to other office furniture facilities.
GAAP Gross Profit 124.7 184.0 (59.3) -32.2%
% of Net Sales 30.7% 32.7% -2% pts
Freight & Distribution 40.4 57.9 (17.5) -30.2% Decrease due to volume and lower fuel costs partially offset by decreased load efficiency.
(excluding transition costs)
% of Net Sales 10.0% 10.3% -0.3% pts
F&D transition costs - 3.4 (3.4) -100% 1Q08 included $3.4 million of transition costs not classified as restructuring costs related to
transitioning production to other office furniture facilities.
Non-GAAP Other SG&A 95.8 111.3 (15.4) -13.9% Decrease due to cost containment efforts, lower volume related costs and reduced incentive based
(excluding F&D, restructuring & impairment and compensation expense.
transition costs)
% of Net Sales 23.6% 19.7% 3.9% pts
Restructuring and impairment 5.1 0.8 4.3 538% 1Q09 included restructuring charges related to the closure of an office furniture facility ($3.0 million)
and restructuring charges associated with the disposition of hearth retail and distribution locations
($2.1 million). 1Q08 included $0.8 million of restructuring and impairment related to transitioning
production to other office furniture facilities.
GAAP SG&A 141.3 173.4 (32.0) -18.5%
% of Net Sales 34.8% 30.8% 4% pts
Operating Income (loss) (16.6) 10.7 (27.3) -256%
% of Net Sales -4.1% 1.9% -6% pts
Interest Expense 3.2 3.9 (0.7) -18% Decrease due to lower average interest rates and lower borrowing.
Interest Income 0.1 0.5 (0.3) -70.8%
Income tax rate 39.7% 43.9% -4.2% pts
Noncontrolling Interest 0.0 0.1 (0.1) -80.9%
Net Income (loss) - Parent Company (11.9) 4.0 (15.9) -399%
% of Net Sales -2.9% 0.7% -3.6% pts
EPS (diluted) - Total $ (0.27) $ 0.09 $ (0.36) -400%
5
Shares (diluted) 44.8 44.7 0.1 0.3% No shares repurchased during 1Q09.
6. 1st Quarter Results - Segments
% change %
Segment Breakdown 1Q09 1Q08 $ change Pt Change Comments
Sales
Office Furniture 337.9 466.0 (128.2) -27.5% Acquisitions contributed $10M or 2.2% of add'l sales. Organic growth $(138)M; -29.7%
Supplies driven channel down 35% ; all other organic down 24% .
Hearth Products 67.8 97.4 (29.6) -30.4% Organic growth $(30)M; -30.4%
New Construction Channel down 36% ; Remodel/Retrofit down 25% .
Total 405.7 563.4 (157.7) -28.0%
Operating Profit
Office Furniture 0.5 18.8 (18.2) -97.2%
Office Furniture Oper Margin 0.2% 4.0% -3.8% pts Margin negatively impacted by lower volume and increased material costs offset partially
by price realization, cost control initiatives and lower restructuring/transition costs than
prior year.
Hearth Products (11.4) (2.9) (8.6)
Hearth Oper Margin -16.9% -2.9% -14% pts Margin negatively impacted by lower volume and increased restructuring costs offset
partially by cost control initiatives.
Unallocated Corporate Expenses (8.8) (8.8) (0.0) -0.1% Cost control initiatives and lower interest expense offset by higher benefit costs.
Income Before Taxes (19.7) 7.1 (26.8) -377%
6
7. 1st Quarter Assessment
Highly challenging market conditions
Taking strong action to reset cost structure and improve business
4 Good progress on attacking day-to-day operating costs
4 South Gate facility closure and hearth dispositions indicative of cost reset actions
4 New products being well received
4 Operational execution running at peak levels
Demand consistently weak across channels
4 Office furniture supplies-driven channel down 35%, de-stocking of customer inventory significant factor
4 Remainder of office furniture declined 19% when including HBF acquisition, down 24% organic
4 Hearth new construction channel down 36%; remodel-retrofit down 25%
Expect current economic challenges will continue – managing appropriately
7
9. Q1 2009 Net Sales – Office Furniture
$500
$450
86
$400
-27.5%
-34.9%* 52
$350
10
466
-23.7%* +2.2%
$300
USD Millions
338
$250
$200
Q1 2008 Organic Decline Organic (Other) Acquisitions Q1 2009
(Supplies Channel)
* Represents % growth compared to prior year’s net sales in the channel
9
10. Non-GAAP Reconciliation
Three Months Ended Three Months Ended
Dollars in millions 4/04/2009 3/29/2008
except per share data
Gross Operating Gross Operating
Profit (Loss) EPS Profit Income EPS
As Reported (GAAP) $124.7 ($16.6) ($0.27) $184.0 $10.7 $0.09
% of Net Sales 30.7% -4.1% 32.7% 1.9%
Restructuring and impairment - $5.1 $0.07 $0.4 $ 1.2 $0.02
Transition costs - - - $3.9 $ 7.3 $0.10
Results (non-GAAP) $124.7 ($11.5) ($0.20) $188.3 $19.2 $0.21
% of Net Sales 30.7% -2.8% 33.4% 3.4%
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11. 2nd Quarter Outlook
Visibility extremely limited and marketplace conditions uncertain
Current view of Q2:
4 Not anticipating top line improvement during the second quarter
4 Office furniture supplies-driven channel showing early signs of stabilizing at very low demand levels, but
tremendous uncertainty remains
4 Rest of office furniture continue to decline, despite strong competitive position
4 Well positioned in government sector; positive early market response to new products
4 Hearth outlook highly negative; expecting loss in Q2
Well positioned for future due to reset cost structure and new product, selling, and
operational investments
11
12. 2nd Quarter Financial Outlook
Net Sales - Consolidated Down 32-38%
Office Furniture Sales Down 32-38%
Hearth Sales Down 32-38%
Gross Profit Margin Down 1.7% - 2.2% pts.
(Including Restructuring)
Restructuring Charges - COGS $2.7 million
SG&A Up 3.5%-4.5% pts.
(Excluding Restructuring)
Restructuring Charges - SGA $3.4 million
Interest Expenses $3.0M
Effective Tax Rate 38%
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