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Company and Industry in great state of change. Manufacturing realignment

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

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Company and Industry in great state of change. Manufacturing realignment

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  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. 2

  2. 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 3

  3. 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 4

  4. 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 5

  5. 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 6

  6. 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 7

  7. 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 8

  8. 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 9

  9. 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 10

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