Investor Presentation

Caution Regarding Forward-Looking Statements

Matters discussed in this document and in our public disclosures, whether written or oral, relating to future events or our
future performance, including any discussion, express or implied, of our anticipated growth, operating results, future earnings
per share, or plans and objectives, contain forward-looking statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are often identified by the words will,
believe, positioned, estimate, project, target, continue, intend, expect, future, anticipates, and similar
expressions that are not statements of historical fact. These statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to predict. Our actual results and timing of certain events could
differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not
limited to, those set forth under ``Risk Factors'' in our Annual Report on Form 10-K for the year ended December 31, 2011,
and in our other subsequent public filings with the Securities and Exchange Commission. Such factors include, but are not
limited to: risks associated with the execution of our strategic plan; changes in economic conditions; loss of market share due
to competition; changes in our pension funding obligations; failure to forecast demand or anticipate or respond to changes in
consumer tastes and fashion trends; failure to achieve projected mix of product sales; business failures of large customers;
distribution realignments; manufacturing realignments and cost savings programs; increased reliance on offshore (import)
sourcing of various products; fluctuations in the cost, availability and quality of raw materials; product liability uncertainty;
environmental regulations; future acquisitions; loss of key personnel; impairment of intangible assets; anti-takeover provisions
which could result in a decreased valuation of our common stock; loss of funding sources or our inability to secure additional
financing to meet our operating and capital needs; and our ability to open and operate new retail stores successfully. It is
routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it
should be clearly understood that all forward-looking statements and the internal projections and beliefs upon which we base
our expectations included in this report or other periodic reports are made only as of the date made and may change. While
we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update
any forward-looking statements whether as a result of new information, future events or otherwise.

Industrys Top Portfolio of Brands

Four Major Business Groups

FBN

Dedicated
Retail
Components:

Thomasville
Company-Owned
Stores
Dealer Owned Stores
Galleries
Designer Showrooms

Wholesale
Brands

Lane Wholesale
Broyhill Wholesale

Designer
Brands

Drexel Heritage
Hickory Chair
Henredon
Maitland-Smith
Lane Venture
Pearson

Special
Markets

Contract
Homebuilders
Licensing
RTA

Our Focus

Maximize free cash flow through:

Profitable sales growth
Manufacturing efficiencies
Aggressive cost reductions and controls

Improving inventory and working capital management

Disciplined capital investment

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Business Strategy and Plan

Focus on driving distribution for wholesale brands
Develop great product at competitive prices
Aggressively pursue lower price point/high volume segments
Leverage brands, service and prudent advertising to break the tie

Develop and execute integrated Thomasville retail model

Refine prototype store model
Balance media mix to optimize advertising to drive traffic
Pursue multi-channel model

Transform business to simplify structure and significantly reduce costs

Restructure organization into leaner operating company
Focus on four business groups: Dedicated Retail, Wholesale, Designer Brands

and Special Markets

Combine non-commercial functions where possible and drive efficiencies
Optimize supply chain network (plants, warehouses, freight)
Value engineer product offerings
Optimize inventory

Vertically integrate business across value chain

Forward integrate pursue disciplined retail expansion
Backward integrate own more off-shore manufacturing and mixing facilities

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Investment Considerations
Well positioned in a large fragmented industry

Opportunistic programs to drive profitable sales

Continued vertical integration opportunities
Optimizing manufacturing
Cost reduction opportunities

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Broadest Portfolio In $60+ Billion Industry

Price Tier 1

$3 B retail

$6 B retail

Mass Appeal

Niche Appeal

Price Tier 2

$10 B retail

Price Tier 3

$4 B retail

Price Tier 4

$30 B retail

$13 B retail
Price Tier Defined as: Average retail prices paid by consumers
Niche vs. mass appeal based on: Breadth of the brands product portfolio; Number of styles
brand represents; and Diversification of brand across distribution channels.

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FBN Has 4 of the 11 Most Recognized Brands

(Unaided + Aided)

Note: Survey completed in 2010

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Broad Distribution Network

Big Box

Dedicated Stores
National Chains
Furniture Galleries
Local Retailers

Interior Designers
Designer Showrooms

International
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Investment Considerations
Well positioned in a large fragmented industry
Opportunistic programs to drive profitable sales
Continued vertical integration opportunities
Optimizing manufacturing
Cost reduction opportunities

16

Dedicated Retail Sales Programs

New Thomasville retail store format and

enhancements
Multi-channel Thomasville model
Migration to updated and transitional
furniture styles at retail
Targeted marketing initiatives

Designer showrooms with multi-brand

product
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Thomasville New Retail Store Appearance and Better Layout

Then

Now

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Designer Showrooms

19

Wholesale Sales Programs

Leverage strong Lane and Broyhill brands and service to
drive distribution

Target all key product category, style, and price segments

for mass market
Migration to updated and transitional furniture styles
Improved Broyhill upholstery product and sales
Broyhill case goods mixing program
Enhanced Lane express quick-ship program
Innovative Lane product offerings (theatre seating,
technology, IRest)
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Lane Portfolio of Product Style and Price Points

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Broyhill Offshore Case Goods Mixing Program

Retail
Customer

factory

Asia
Factories

factory

Asia
Mixing
Center

Containers
to
Customers

Retail
Customer

Retail
Customer

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Broyhill Medici Transitional Introduction

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Designer Brands Sales Programs

Leveraging Designer Brands at retail and in designer
showrooms

Major focus on interior designers

Migration to updated and transitional furniture styles

Expanding price bands of good-better-best offerings

International opportunities and mixing program

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Opportunity to Further Leverage

Hickory Chair

Leading manufacturer of high-end furniture for over 100 years

Best-in-class custom finishing and quick-ship capabilities
Workshop for designers

Lane Venture

Leading high-end outdoor furniture brand

Bringing indoor furniture outdoor

Pearson

High-end upholstery furniture brand

Unique custom fabrics

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 Best-In-Class Designer Brands

Drexel Heritage

Updated and contemporary furniture leader

Products and styles that amaze

Maitland-Smith

Leader in unique hand-crafted custom furniture,

accessories, and gaming

Henredon

Leader in high-end case goods and upholstery

Strong brand reputation
Brand that attracts and product that overwhelms

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Special Markets Sales Programs

Dedicated focus on licensing business
Opportunity with mass retailers with Ready-toAssemble
Increased focus on contract businesses:
Hospitality
Government
Healthcare

Education
Homebuilders

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Investment Considerations
Well positioned in a large fragmented industry
Opportunistic programs to drive profitable sales
Continued vertical integration opportunities
Optimizing manufacturing
Cost reduction opportunities

28

Continued Vertical Integration

Back-end integration:
New manufacturing plant in Indonesia
New cut-and-sew facility in Mexico

Front-end integration:
Disciplined retail store expansion
Leverage high-end brands in designer showroom

format

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FBNs New Indonesia Plant

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Indonesia Plant Blends Modern Equipment & Craftsmanship

Intricate hand carving is a hallmark
of the Indonesian operations

Modern conveyor system improves

efficiency in operations

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Finishing C
Finishing Conveyor
Finishing Conveyor
Plant Production
in Indonesia

Finishing Conveyor

Continues to increase
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Mexican Cut-and-Sew Operations

1 day

2 days

2 days

Yucatan is sewing area for many industries (furniture, automotive, clothing)

Highly skilled local workforce
Site is 20 miles from modern container port
Began operations in March 2011
Modest capital requirement
FBN is leasing existing facility with 3-year purchase option
Government incentives for training, initial costs

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Beginning of 201145 associates in Mexico

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End of 2012over 500 associates in Mexico

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Investment Considerations
Well positioned in a large fragmented industry
Opportunistic programs to drive profitable sales

Continued vertical integration opportunities

Optimizing manufacturing

Cost reduction opportunities

36

Optimizing Manufacturing
Continued implementation of lean manufacturing:
Removal of waste and inefficiencies
Increasing first time quality
Less accidents
Lower material costs

Increased facility utilization

Improving manufacturing metrics

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Lean/Cellular Manufacturing Before

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Lean/Cellular Manufacturing After

39

Increasing Utilization & Improving Metrics

Increased facility utilization:
Consolidating manufacturing plants
Optimizing space for manufacturing and office

personnel

Continued improvements in manufacturing metrics:

Safety, quality, service, and cost

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Investment Considerations
Well positioned in a large fragmented industry
Opportunistic programs to drive profitable sales

Continued vertical integration opportunities

Optimizing manufacturing

Cost reduction opportunities

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Cost Reduction Opportunities

Move from holding company model to operating company
model

Eliminating dark leases from past retail strategy

Improving retail leases

Strategic sourcing
Relentless focus on discretionary spend

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Before 2008: Holding Company Model

Siloed Operating Companies With Separate Organizational Structures

Human
Resources

Human
Resources

Human
Resources

Human
Resources

Human
Resources

Finance

Finance

Finance

Finance

Finance

Information
Technology

Information
Technology

Information
Technology

Information
Technology

Information
Technology

Supply Chain

Supply Chain

Supply Chain

Supply Chain

Supply Chain

Marketing

Marketing

Marketing

Marketing

Marketing

Sales

Sales

Sales

Sales

Sales

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Current: Operating Company Model

Ensures common processes, streamlined service delivery, and operational
excellence while reducing costs
FBN

Brand

Brand

Brand

Brand

Brand

Sales

Sales

Sales

Sales

Sales

Marketing and Product Research

Human Resources
Finance/IT
Supply Chain

Continues to evolve
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New Model Continues to Drive Out Costs

Reported Selling, General & Administrative Costs ($, millions)
500.0

$469.4

450.0
400.0
350.0

$311.9

300.0

$278.9

250.0
200.0
150.0
100.0
50.0

0.0
2007
FYFY2007

FY 2011
FY

3Q
TTM
Q32012
2012
TTM

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Past Retail Strategy Added Legacy Costs

In 2002, FBN launched a program to open more single-brand stores
FBN provided either lease guarantees or sub-leases to independent
operators of Lane, Broyhill, Thomasville or Drexel Heritage stores
Beginning in 2007, FBN abandoned the Lane/Broyhill retail concept
FBN remains liable for 21 dark store leases with a remaining net
expense burden of approximately $13.4 million
Dark Stores
2013
2014
2015
Thereafter
Total Obligation $

4.9
4.7
2.7
1.1
13.4

Dark store expenses are offset by sublease

income. Current income stream is estimated
to offset
be $1.7by
in sublease
2013, $1.5mm
in 2014,
Note: Dark store expenses are
income
in some cases
$0.8mm in 2015 and $0.3mm after 2015.
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Thomasville Lease Roll-off Provides Opportunity

60
50

Remaining Legacy Store

Leases By Quarter

40
30
20
10
0
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 2015+

As legacy store leases expire, FBN can:

Renew existing lease at lower, market rates
Move to a smaller store in a comparable location
Move to a better location within that market
Close the store

Increase
Sales

Decrease
Costs

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Conclusion
Transformation begun in 2008 has yielded results and continues to show
progress through YTD Q3 2012 vs. 2007:
200 basis point improvement in reported gross margin
$120 million reduction in reported SG&A
Strong improvement in quality, safety, and delivery metrics

Management continuing to target every aspect of FBN for improvement

Operational focus on product, sales, manufacturing and customer service
Financial focus on cash generation, through profitable sales growth,
working capital improvements, cost reductions, and disciplined capital
investment

Increases in sales volume can drive strong operating leverage

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Investor Presentation