WinsLoew: 3rd Quarter 1997 Earnings FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 WINSLOEW FURNITURE ANNOUNCES RECORD THIRD QUARTER OPERATING RESULTS PELHAM, AL - (October 20, 1997) WinsLoew Furniture, Inc. (NASDAQ/NM:WLFI) today announced operating results for its third quarter ended September 26, 1997, including net income of $2.3 million, or $0.30 per share, compared to net income of $2.1 million, or $0.25 per share in the same period of 1996. Net income in the first nine months of 1997 was $7.6 million, or $1.01 per share, compared to net income in the first nine months of 1996 of $5.8 million, or $0.66 per share. Net sales in the 1997 third quarter were $35.5 million, compared to $37.3 million in the same period of 1996. Net sales in the first nine months of 1997 were $109.1 million, compared to $112.2 million in the first nine months of 1996. The decline in sales for both 1997 periods was attributable to the disposition of a non-strategic casual furniture business and to a drop in ready-to-assemble ("RTA") sales. At quarter-end September 26, 1997, the Company's sales backlog was $22.1 million, compared to $17.1 million at September 27, 1996, an increase of 29%. The weighted average number of shares outstanding for the just-completed nine month period was 7.5 million, compared to 8.8 million in the same period of 1996. WinsLoew's gross margin increased from 30.1% in the third quarter of 1996 to 30.7% in the same period of 1997. This represented an improvement in gross margin in two of the Company's three product lines due to production efficiencies and reduced raw material costs. Selling, general and administrative expense ("S,G&A") as a percentage of net sales declined from 18.8% in the third quarter of 1996 to 17.7% in the just-completed quarter, due to the Company's ongoing cost reduction program and lower bad debt experience. Interest expense decreased $92,000 in the third quarter of 1997, compared to the same quarter in the prior year. The Company reduced its long-term indebtedness by $10.6 million, from $25.5 million in the third quarter of 1996 to $14.8 million in the third quarter of 1997. The reduction was due to increased profitability and the contribution from the recent sale of a non-strategic business. Bobby Tesney, President and Chief Executive Officer of WinsLoew Furniture, commented, "We are very pleased to report record third quarter operating results. Sales in our casual furniture unit improved 14.2% from the third quarter of 1996, when adjusted to exclude the disposition of our wrought iron facility. This increase was due to deeper account penetration in response to the Company's high product quality and customer service. Gross margin in casual furniture improved 2.1 percentage points to 39.7% in the third quarter of 1997. "Sales in our contract seating unit increased 25.0% due to growth in our core accounts, augmented by increased demand from lodging industry customers. Gross margin in contract seating improved 2.7 percentage points." Tesney added, "Our balance sheet continues to improve. As noted above, our long-term indebtedness has declined sharply from the prior year, and our inventory levels have dropped from $20.6 million in the third quarter of 1996 to $14.9 million in the just-completed quarter. Cash flow from operating activities increased from $20.5 million in the first nine months of 1996 to $26.3 million in the first nine months of 1997." Tesney concluded, "As part of our strategic operating plan, we are conducting a review of our current businesses. This review will be completed by year-end, and we will dispose of those assets or businesses which we believe will not make a meaningful contribution to the Company's long-term growth, or are not strategically desirable. As previously announced, WinsLoew sold its Lyon-Shaw wrought iron casual furniture subsidiary in August 1997, and the Company has engaged an investment banker to sell its Continental Engineering subsidiary, which is a manufacturer of ergonomically-designed computer workstations. Part of this plan includes an acquisition program to add complementary product lines or companies to our existing core businesses, casual furniture and contract seating, which we believe enjoy strong prospects for long-term profitability." This news release contains certain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward- looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks include, but are not limited to, raw material costs and the ability to pass price increases to customers in a timely fashion; industry overcapacity; product acceptance; cyclical fluctuations based on economic conditions, including its effects on consumer behavior, preferences, and confidence; the level of discretionary spending; housing activity; interest rates and credit availability; and adverse weather conditions, etc. All forward-looking statements should be considered in light of these risks and uncertainties. WinsLoew Furniture, Inc. designs, manufactures, and distributes aluminum and wrought iron casual furniture; contract seating for the hospitality and office furniture markets; and ready-to- assemble products including wood post and flatline furniture, and futons, frames, and related accessories. Additional information is available on the Internet World Wide Web at this address: http://www.cfonews.com/wlfi; or investors may dial direct by modem to (718) 279-3590; or send E-mail to CFO@panix.com, with the subject wlfi. WinsLoew Furniture, Inc. and Subsidiaries Consolidated Statements of Income(Unaudited) (In thousands, except per share amounts) Third Quarter Ended Nine MonthsEnded Sept. 26, Sept. 27, Sept. 26, Sept. 27 1997 1996 1997 1996 Net Sales $ 35,467 $37,332 $109,122 $112,203 Cost of Sales 24,588 26,094 73,558 76,885 Gross profit 10,879 11,238 35,564 35,318 Selling, general and administrative expenses 6,268 7,020 20,200 22,209 Amortization 299 297 894 1,343 Operating income 4,312 3,921 14,470 11,766 Interest expense 590 682 2,092 2,516 Income before income taxes 3,722 3,239 12,378 9,250 Provision for income taxes 1,440 1,119 4,774 3,422 Net income $2,282 $2,120 $ 7,604 $ 5,828 Net income per share $ 0.30 $ 0.25 $ 1.01 $ 0.66 Weighted average number of shares 7,602 8,589 7,531 8,843 WinsLoew Furniture, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) September 26, December 31, 1997 1996 (Unaudited) Assets Cash and cash equivalents $ 2,333 $ 897 Accounts receivable, less allowances for doubtful accounts 18,426 27,203 Inventories 14,938 20,714 Prepaid expenses and deferred income taxes 3,989 3,893 Total current assets 39,686 52,707 Property, plant and equipment, net 15,416 17,725 Goodwill, net 29,156 29,826 Other assets 981 1,150 $85,239 $101,408 Liabilities and Stockholders' Equity Current portion of long-term debt $ 805 $ 1,957 Accounts payable 5,011 4,640 Other accrued liabilities 7,357 5,958 Total current liabilities 13,173 12,555 Long-term debt, net of current portion 14,015 38,776 Deferred income taxes 1,805 1,677 Total liabilities 28,993 53,008 Stockholders' equity: Preferred stock, par value $.01 per share, 5,000,000 shares authorized, none issued -- -- Common stock; par value $.01 per share, 20,000,000 shares authorized, 7,523,358 and 7,481,783 shares issued and outstanding at September 26, 1997 and December 31, 1996, respectively 75 75 Additional paid-in capital 24,785 24,543 Retained earnings 31,386 23,782 Total stockholders'equity 56,246 48,400 $85,239 $101,408 WinsLoew Furniture, Inc. and Subsidiaries Supplemental Income Statement Data Three Months Ended September 26, 1997 September 27, 1996 Net Gross Gross Net Gross Gross Sales Profit Margin Sales Profit Margin Casual furniture 13,116 5,202 39.70% $13,218 $4,970 37.60% Contract seating 14,869 4,662 31.40% 11,892 3,414 28.70% RTA furniture 7,482 1,015 13.60% 12,222 2,854 19.10% Total $35,467 $10,879 30.70% $37,332 $11,238 30.10% Nine Months Ended September 26, 1997 September 27,1996 Net Gross Gross Net Gross Gross Sales Profit Margin Sales Profit Margin Casual furniture 44,974 18,698 41.60% 44,790 $17,834 39.80% Contract seating 43,671 13,030 29.80% 35,880 10,400 29.00% RTA furniture 20,477 3,836 18.70% 31,533 7,084 22.50% Total $109,122 $35,564 32.60% $112,203 $35,318 31.50% Ends.