Falcon Products Reports Record Earnings and Sales For First Quarter 2000; Board of Directors Declares Quarterly Dividend of 4 Cents Per Share.

Business Editors

ST. LOUIS, Mo.--(BUSINESS WIRE)--March 7, 2000

Falcon Products, Inc. (NYSE: FCP), a leading manufacturer of commercial furniture, reported earnings per diluted share for the first quarter ended January 29, 2000, increased 14.3 percent to $0.24 from $0.21 in the first quarter of 1999. Net earnings increased 10.8 percent to $2.1 million from $1.9 million.

Net sales for the first quarter of 2000 were $75.1 million, a 117.0 percent increase from $34.6 million for the first quarter of 1999, driven in large part by the acquisition of Shelby Williams Industries, Inc. in June 1999. Operating profit increased to $8.0 million from $3.3 million, and, reflecting Falcon's emphasis on operating efficiency, Falcon's operating margin increased to 10.7 percent from 9.5 percent in the first quarter of 1999.

Operating cash flow, or earnings before interest, income taxes, depreciation and amortization ("EBITDA"), was $10.2 million for the first quarter of 2000 and $40.2 million, on a pro forma basis, for the last twelve months ended January 29, 2000. EBITDA margins increased to 13.5 percent of sales in the first quarter from 11.7 percent on a pro forma basis in the prior year quarter.

Franklin A. Jacobs, Chairman and Chief Executive Officer, said, "These solid first quarter earnings were in line with our expectations, and a good start for the 2000 fiscal year. We were especially pleased with the increase in our operating margin, which reflected our success in realizing the efficiencies from integrating the manufacturing operations of Shelby Williams. While our plant consolidation efforts, which began late in fiscal 1999, had some negative impact on shipments during the quarter, that impact was more than offset by our efficiency gains."

Darryl Rosser, President and Chief Operating Officer, commented, "The plant consolidation effort is proceeding very well. The City of Industry, California, facility shutdown should be substantially completed later this month, and production shifted to other facilities. Lewisville, Arkansas, and Tijuana, Mexico, production was transferred during the quarter, and the reduced production associated with these plant shutdowns is largely behind us. We are poised to achieve the benefits from these moves, which include significant cost savings and operating efficiencies."