FORM 10-QSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549

| |  | (Mark one)
| |  | ----------

|(X) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004 or
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------

| |  | TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934For the transition period from ____________ to ____________
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Commission file
number I-91
| |  | ---------------------------

| | Furniture Brands International, Inc.(Exact
name of registrant as specified in its charter)
| | ------------------------------------------------------------------------------------------



| |  | Delaware                                           |  | 43-0337683          | 
| |  | -------------------------------------------------- |  | ------------------- | 
| |  | (State or other jurisdiction of                    |  | (I.R.S. Employer    | 
| |  | incorporation or organization)                     |  | Identification No.) | 
| |  |                                                    |  |                     | 
| |  | 101 South Hanley Road, St. Louis, Missouri         |  | 63105               | 
| |  | (Address of principal executive offices)           |  | (Zip Code)          | 
| |  |                                                    |  |                     | 
| |  | Registrants telephone number, including area code |  | (314) 863-1100      | 
| |  |                                                    |  |                     | 
| |  |                                                    |  |                     | 

| | Former
name, former address and former fiscal year, if changed since last   report
| | ----------------------------------------------------------------------------------

| | Indicate by check
mark  whether the  registrant  (1) has filed all reports  required to be filed by Section
13 or 15 (d) of the Securities  Exchange Act of 1934 during the  preceding 12 months (or
for such shorter  period that the  registrant  was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Yes   X | No
| | ------- | --

| | Indicate by
check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of
the Exchange Act).
| | ----------------------------------------------------------------------------------------------------------------------

| | Yes    X | No
| | -------- | --

APPLICABLE ONLY TO
CORPORATE ISSUERS

| |  | Indicate the
number of shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date.
| |  | -----------------------------------------------------------------------------------------------------------------------------

56,058,586 shares as of
April 30, 2004

---

PART I FINANCIAL
INFORMATION

Item 1.    
 Financial Statements

Consolidated Financial Statements for the quarter ended March 31, 2004.

| | Consolidated Balance Sheets
| | ---------------------------

| | Consolidated Statements of Operations:
| | --------------------------------------

| | Three Months Ended March 31, 2004                                    Three Months Ended March 31, 2003
| | ------------------------------------------------------------------------------------------------------

| | Consolidated
Statements of Cash Flows:
| | --------------------------------------

| | Three Months Ended March 31, 2004                                    Three Months Ended March 31, 2003
| | ------------------------------------------------------------------------------------------------------

| | Notes to Consolidated Financial Statements
| | ------------------------------------------

The financial statements are
unaudited,  but include all adjustments  (consisting of normal recurring adjustments)
which the management of the Company considers  necessary for a fair presentation of the
results of the period.  The results for the three months ended March 31, 2004 are not
necessarily indicative of the results to be expected for the full year.

---

FURNITURE BRANDS INTERNATIONAL, INC. 
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands)  (Unaudited)

|                                                |  |  |   | March 31, |   |   | December 31, |   |  |  | 
|----------------------------------------------- |  |  | - | --------- | - | - | ------------ | - |  |  | 
|                                                |  |  |   | 2004      |   |   | 2003         |   |  |  | 
|ASSETS                                          |  |  |   |           |   |   |              |   |  |  | 
|                                                |  |  |   |           |   |   |              |  
|Current assets:                                 |  | 
|Cash and cash equivalents                       |  |  | $ | 98,273    |   | $ | 71,668       |  
|Receivables, less allowances of $21,559         |  | 
|($19,378 at December 31, 2003)                  |  |  |   | 417,571   |   |   | 366,448      |  
|Inventories...(Note 1)                          |  |  |   | 404,929   |   |   | 414,684      |   |  |  | 
|Deferred income taxes                           |  |  |   | 25,677    |   |   | 25,563       |  
|Prepaid expenses and other current assets       |  |  |   | 4,911     |   |   | 7,689        |  
|Total current assets                            |  |  |   | 951,361   |   |   | 886,052      |  
|Property, plant and equipment                   |  |  |   | 673,561   |   |   | 673,931      |  
|Less accumulated depreciation                   |  |  |   | 372,431   |   |   | 363,368      |  
|Net property, plant and equipment               |  |  |   | 301,130   |   |   | 310,563      |  
|Goodwill                                        |  |  |   | 183,789   |   |   | 183,789      |  
|Other intangible assets                         |  |  |   | 169,671   |   |   | 169,671      |  
|Other assets                                    |  |  |   | 26,995    |   |   | 28,184       |  
|                                                |  |  | $ | 1,632,946 |   | $ | 1,578,259    |   |  |  | 
|                                                |  |  |   |           |   |   |              |  
|LIABILITIES AND SHAREHOLDERS EQUITY            |  | 
|                                                |  |  |   |           |   |   |              |  
|Current liabilities:                            |  | 
|Accrued interest expense                        |  |  | $ | 2,033     |   | $ | 1,992        |  
|Accounts payable and other accrued expenses     |  |  |   | 215,641   |   |   | 180,827      |  
|Total current liabilities                       |  |  |   | 217,674   |   |   | 182,819      |  
|Long-term debt                                  |  |  |   | 303,200   |   |   | 303,200      |  
|Deferred income taxes                           |  |  |   | 75,590    |   |   | 69,796       |  
|Other long-term liabilities                     |  |  |   | 41,843    |   |   | 55,542       |  
|                                                |  |  |   |           |   |   |              |  
|Shareholders equity:                           |  | 
|Preferred stock, authorized 10,000,000          |  | 
|shares, no par value - issued, none             |  |  |   | --        |   |   | --           |  
|Common stock, authorized 200,000,000 shares,    |  | 
|$1.00 stated value - issued 56,481,016          |  | 
|shares at March 31, 2004 and 56,277,066         |  | 
|shares at December 31, 2003                     |  |  |   | 56,481    |   |   | 56,277      
|Paid-in capital                                 |  |  |   | 228,172   |   |   | 221,388      |  
|Retained earnings                               |  |  |   | 753,140   |   |   | 726,932      |  
|Accumulated other comprehensive income (Note 3) |  |  |   | (29,794   | ) |   | (31,446      | )
|Treasury stock at cost (423,955 shares at       |  | 
|March 31, 2004 and 330,409 shares at            |  | 
|December 31, 2003)                              |  |  |   | (13,360   | ) |   | (6,249       | )
|Total shareholders equity                      |  |  |   | 994,639   |   |   | 966,902      |  
|                                                |  |  | $ | 1,632,946 |   | $ | 1,578,259    |  
|                                                |  | 

See accompanying notes to
consolidated financial statements.

---

FURNITURE BRANDS
INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS 
(Dollars in thousands except per share data)(Unaudited)

|                                             |  |  |   | Three Months |  |   | Three Months | 
|-------------------------------------------- |  |  | - | ------------ |  | - | ------------ | 
|                                             |  |  |   | Ended        |  |   | Ended        | 
|                                             |  |  |   | March 31,    |  |   | March 31,    | 
|                                             |  |  |   | 2004         |  |   | 2003         | 
|                                             |  |  |   |              |  |   |              | 
|Net sales                                    |  |  | $ | 658,531      |  | $ | 613,844      | 
|                                             |  |  |   |              |  |   |              | 
|Costs and expenses:                          |  | 
|Cost of operations                           |  |  |   | 470,885      |  |   | 436,499      | 
|                                             |  |  |   |              |  |   |              | 
|Selling, general and administrative expenses |  |  |   | 118,803      |  |   | 114,188      | 
|                                             |  |  |   |              |  |   |              | 
|Depreciation and amortization                |  |  |   | 12,617       |  |   | 12,904       | 
|                                             |  |  |   |              |  |   |              | 
|Earnings from operations                     |  |  |   | 56,226       |  |   | 50,253       | 
|                                             |  |  |   |              |  |   |              | 
|Interest expense                             |  |  |   | 4,926        |  |   | 5,057        | 
|                                             |  |  |   |              |  |   |              | 
|Other income, net                            |  |  |   | 707          |  |   | 769          | 
|                                             |  |  |   |              |  |   |              | 
|Earnings before income tax expense           |  |  |   | 52,007       |  |   | 45,965       | 
|                                             |  |  |   |              |  |   |              | 
|Income tax expense                           |  |  |   | 18,798       |  |   | 16,924       | 
|                                             |  |  |   |              |  |   |              | 
|Net earnings                                 |  |  | $ | 33,209       |  | $ | 29,041       | 
|                                             |  |  |   |              |  |   |              | 
|Net earnings per common share:               |  | 
|                                             |  |  |   |              |  |   |              | 
|Basic                                        |  |  | $ | 0.59         |  | $ | 0.52         | 
|                                             |  |  |   |              |  |   |              | 
|Diluted                                      |  |  | $ | 0.58         |  | $ | 0.52         | 
|                                             |  |  |   |              |  |   |              | 
|Weighted average common shares outstanding   |  | 
|(Note 2):                                    |  | 
|                                             |  |  |   |              |  |   |              | 
|Basic                                        |  |  |   | 56,203,160   |  |   | 55,653,893   | 
|                                             |  |  |   |              |  |   |              | 
|Diluted                                      |  |  |   | 57,093,605   |  |   | 56,019,341   | 

See accompanying notes to
consolidated financial statements.

---

FURNITURE BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(Unaudited)

|                                                     |  |  |   | Three Months |   |   | Three Months |  
|---------------------------------------------------- |  |  | - | ------------ | - | - | ------------ | -
|                                                     |  |  |   | Ended        |   |   | Ended       
|                                                     |  |  |   | March 31,    |   |   | March 31,    |  
|                                                     |  |  |   | 2004         |   |   | 2003         |  
|                                                    
|Cash flows from operating activities:                |  | 
|Net earnings                                         |  |  | $ | 33,209       |   | $ | 29,041       |  
|Adjustments to reconcile net earnings to net cash    |  | 
|provided by operating activities:                    |  | 
|Depreciation and amortization                        |  |  |   | 12,617       |   |   | 12,904       |  
|Other, net                                           |  |  |   | 328          |   |   | 252          |  
|Increase in receivables                              |  |  |   | (51,123      | ) |   | (26,123      | )
|(Increase) decrease in inventories                   |  |  |   | 9,755        |   |   | (4,784       | )
|(Increase) decrease in prepaid expenses              |  | 
|and other assets                                     |  |  |   | 2,720        |   |   | (1,631       | )
|Increase in accounts payable, accrued interest       |  | 
|expense and other accrued expenses                   |  |  |   | 36,599       |   |   | 12,866       |  
|Increase (decrease) in net deferred tax liabilities  |  |  |   | 4,692        |   |   | (211         | )
|Increase (decrease) in other long-term liabilities   |  |  |   | (10,479      | ) |   | 4,095        |  
|Net cash provided by operating activities            |  |  |   | 38,318       |   |   | 26,409       |  
|                                                    
|Cash flows from investing activities:                |  | 
|Proceeds from the disposal of assets                 |  |  |   | 2,539        |   |   | 52           |  
|Additions to property, plant and equipment           |  |  |   | (5,189       | ) |   | (8,721       | )
|Net cash used by investing activities                |  |  |   | (2,650       | ) |   | (8,669       | )
|                                                    
|Cash flows from financing activities:                |  | 
|Payments of long-term debt                           |  |  |   | --           |   |   | (20,000      | )
|Proceeds from the issuance of common stock           |  |  |   | 4,197        |   |   | --           |  
|Payments of cash dividends                           |  |  |   | (7,001       | ) |   | --           |  
|Proceeds from the issuance of treasury stock         |  |  |   | 7,030        |   |   | 83           |  
|Payments for the purchase of treasury stock          |  |  |   | (13,289      | ) |   | --           |  
|Net cash used by financing activities                |  |  |   | (9,063       | ) |   | (19,917      | )
|                                                    
|Net increase (decrease) in cash and cash equivalents |  |  |   | 26,605       |   |   | (2,177       | )
|Cash and cash equivalents at beginning of period     |  |  |   | 71,668       |   |   | 15,074       |  
|Cash and cash equivalents at end of period           |  |  | $ | 98,273       |   | $ | 12,897       |  
|                                                    
|Supplemental Disclosure:                             |  | 
|Cash payments (refunds) for income taxes, net        |  |  | $ | (1,154       | ) | $ | 9,107        |  
|                                                    
|Cash payments for interest expense                   |  |  | $ | 4,743        |   | $ | 5,039        |  

See accompanying notes to
consolidated financial statements.

---

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Dollars in thousands except per share data) (Unaudited)

|(1) |  | Inventories
are summarized as follows:
|--- |  | --------------------------------------

| |                   |  |  |   | March 31, |  |   | December 31, | 
| | ----------------- |  |  | - | --------- |  | - | ------------ | 
| |                   |  |  |   | 2004      |  |   | 2003         | 
| | Finished products |  |  | $ | 240,081   |  | $ | 252,582      | 
| | Work-in-process   |  |  |   | 56,433    |  |   | 52,513       | 
| | Raw materials     |  |  |   | 108,415   |  |   | 109,589      | 
| |                   |  |  | $ | 404,929   |  | $ | 414,684      | 

|(2) |  | Weighted
average shares used in the computation of basic and diluted net earnings per
common share are as follows:
|--- |  | ------------------------------------------------------------------------------------------------------------------

| |                                |  |  |  | Three Months |  |  | Three Months | 
| | ------------------------------ |  |  |  | ------------ |  |  | ------------ | 
| |                                |  |  |  | Ended        |  |  | Ended       
| |                                |  |  |  | March 31,    |  |  | March 31,    | 
| |                                |  |  |  | 2004         |  |  | 2003         | 
| | Weighted average shares used   |  | 
| | for basic net earnings per     |  | 
| | common share                   |  |  |  | 56,203,160   |  |  | 55,653,893   | 
| | Effect of dilutive securities: |  | 
| | Stock options                  |  |  |  | 890,445      |  |  | 365,448      | 
| | Weighted average shares used   |  | 
| | for diluted net earnings       |  | 
| | per common share               |  |  |  | 57,093,605   |  |  | 56,019,341   | 

|(3) |  | Other
comprehensive income is as follows:
|--- |  | -----------------------------------------

| |                                 |  |  |   | Three Months |   |   | Three Months |  
| | ------------------------------- |  |  | - | ------------ | - | - | ------------ | -
| |                                 |  |  |   | Ended        |   |   | Ended       
| |                                 |  |  |   | March 31,    |   |   | March 31,    |  
| |                                 |  |  |   | 2004         |   |   | 2003         |  
| | Net earnings                    |  |  | $ | 33,209       |   | $ | 29,041       |  
| | Other comprehensive income, net |  | 
| | of tax:                         |  | 
| | Financial instruments accounted |  | 
| | for as hedges                   |  |  |   | 1,835        |   |   | 1,069        |  
| | Foreign currency translation    |  |  |   | (183         | ) |   | (71          | )
| | Other comprehensive income      |  |  |   | 1,652        |   |   | 998          |  
| |                                 |  |  | $ | 34,861       |   | $ | 30,039       |  

| |  | The components
of accumulated other comprehensive income, each presented net of tax benefit, are as
follows:
| |  | ------------------------------------------------------------------------------------------------------------

| |                                       |  |  |   | March 31, |   |   | December 31, |  
| | ------------------------------------- |  |  | - | --------- | - | - | ------------ | -
| |                                       |  |  |   | 2004      |   |   | 2003         |  
| | Market value of financial instruments |  | 
| | accounted for as hedges               |  |  | $ | (803      | ) | $ | (2,638       | )
| | Minimum pension liability             |  |  |   | (28,170   | ) |   | (28,170      | )
| | Foreign currency translation          |  |  |   | (821      | ) |   | (638         | )
| |                                       |  |  | $ | (29,794   | ) | $ | (31,446      | )

---

|(4) |  | The Company  accounts
for  stock-based  employee  compensation  using the  intrinsic  value
method as prescribed by Accounting Principles Board Opinion No. 25. Had
compensation cost for the Companys  stock-based  compensation  plan been determined
 consistent with SFAS No. 123, net earnings and earnings per common share would
have been as follows:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                           |  |  |   | Three Months |   |   | Three Months |  
| | ----------------------------------------- |  |  | - | ------------ | - | - | ------------ | -
| |                                           |  |  |   | Ended        |   |   | Ended        |  
| |                                           |  |  |   | March 31,    |   |   | March 31,    |  
| |                                           |  |  |   | 2004         |   |   | 2003         |  
|
| | Net earnings - as reported                |  |  | $ | 33,209       |   | $ | 29,041       |  
| | Deduct: Stock-based employee compensation |  | 
| | expense determined under fair value       |  | 
| | based method, net of tax benefit          |  |  |   | (1,220       | ) |   | (1,371       | )
| | Net earnings - pro forma                  |  |  | $ | 31,989       |   | $ | 27,670       |  
| | Earnings per share - basic:               |  | 
| | As reported                               |  |  | $ | 0.59         |   | $ | 0.52         |  
| | Pro forma                                 |  |  | $ | 0.57         |   | $ | 0.50         |  
| | Earnings per share - diluted:             |  | 
| | As reported                               |  |  | $ | 0.58         |   | $ | 0.52         |  
| | Pro forma                                 |  |  | $ | 0.56         |   | $ | 0.50         |  

|(5) |  | The
components of net periodic pension cost for Company-sponsored defined benefit plans are
as follows:
|--- |  | -------------------------------------------------------------------------------------------------------

| |                                |  |  |   | Three Months |   |   | Three Months |  
| | ------------------------------ |  |  | - | ------------ | - | - | ------------ | -
| |                                |  |  |   | Ended        |   |   | Ended        |  
| |                                |  |  |   | March 31,    |   |   | March 31,    |  
| |                                |  |  |   | 2004         |   |   | 2003         |  
|
| | Service cost                   |  |  | $ | 3,363        |   | $ | 2,880        |  
| | Interest cost                  |  |  |   | 6,153        |   |   | 5,949        |  
| | Expected return on plan assets |  |  |   | (7,087       | ) |   | (7,181       | )
| | Net amortization and deferral  |  |  |   | 982          |   |   | 1,666        |  
| |                                |  |  | $ | 3,411        |   | $ | 3,314        |  

| |  | In the
first  quarter of 2004,  the Company made a cash  contribution  of $15,000 to the defined
 benefit  plans trust fund. No additional contributions to the trust fund are
anticipated for 2004.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | In
November 2002, the FASB issued  Interpretation  No. 45 (FIN 45),  Guarantors
 Accounting and Disclosure  Requirements for Guarantees,  Including Indirect
Guarantees of Indebtedness of Others. This interpretation  expands the disclosure
 requirements to be made by a guarantor about its obligations  under certain
 guarantees that it has issued.  The disclosure  requirements are effective for
periods  ending after  December 15, 2002.  FIN 45 also  requires a guarantor to
 recognize,  at the inception of a guarantee, a liability for the fair value of
the obligation for guarantees issued or modified after December 31, 2002.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company
has provided  guarantees related to store leases for certain  independent  dealers
opening  Company-branded  stores         (e.g.,  Thomasville Home Furnishings  Stores).
The guarantees range from one to fifteen years and generally require the Company
        to make lease payments in the event of
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| |  | default by
the dealer.  In the event of default,  the Company has the right to assign or
        assume the lease. The total future lease payments  guaranteed at March 31, 2004
were $95,437.  The Company believes the risk of         significant loss from these lease
guarantees is remote.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 2.     Management's Discussion and Analysis of Results of Operations and Financial Condition

RESULTS OF OPERATIONS

Furniture Brands  International,  Inc.  (referred to herein as the Company) is one of the largest home
(residential) furniture manufacturers in the United States.  The Company has four primary operating
subsidiaries:  Broyhill Furniture Industries, Inc.; Lane Furniture Industries,  Inc.; Thomasville
Furniture Industries,  Inc., and HDM Furniture Industries,  Inc. (which includes the operations of
Henredon, Drexel Heritage and Maitland-Smith).

Comparison of Three Months Ended March 31, 2004 and 2003

Selected financial information for the three months ended March 31, 2004 and March 31, 2003 is presented below:

(Dollars in millions except per share data)

|                                | Three Months Ended
|------------------------------- | ------------------
|
|                                |                   
|                                |                   
|Net sales                       |                   
|Earnings from operations        |                   
|Interest expense                |                   
|Income tax expense              |                   
|Net earnings                    |                   
|Net earnings per common share - |                   
|diluted                         |                   
|Gross profit (1)                |                   

|(1) |  | The Company believes
          that gross profit provides useful information regarding a companys
          financial performance. Gross profit has been calculated by subtracting cost
          of operations and the portion of depreciation associated with cost of goods
          sold from net sales.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Three Months Ended           
| | -----------------------------
|
| |                              
| | Net sales                    
| | Cost of operations           
| | Depreciation (associated with
| | cost of goods sold)          
| | Gross profit                 

Net sales for the three months ended March 31, 2004 were $658.5 million, compared to $613.8 million
in the three months ended March 31, 2003, an increase of $44.7 million or 7.3%.  While all operating
companies showed improvement the business at the upper-price point companies (Thomasville,
Drexel Heritage and Henredon) was particularly strong.

Earnings from operations for the three months ended March 31, 2004 increased by $5.9 million or 11.9%
from the comparable prior year period.  Earnings

---

from operations for the three months ended March 31, 2004 and March 31, 2003  were 8.5% and 8.2%
of net sales, respectively. The improvement in earnings from operations, as a percentage of net sales,
came primarily from good control of selling, general and administrative expenses.  Cost of operations
was negatively impacted by $1.6 million in restructuring and asset impairment charges attributable to
the Drexel Heritage plant closings announced in January 2004.

Interest expense totaled $4.9 million for the three months ended March 31, 2004 compared to $5.1 million
in the prior year comparable period.  The decrease in interest expense in the three months ended March 31,
2004 resulted from lower interest rates partially offset by the amortization of deferred financing fees
related to the Companys refinancing of its revolving credit facility in December 2003.

The effective income tax rate was 36.1% and 36.8% for the three months ended March 31, 2004 and
March 31, 2003, respectively. The effective income tax rate for the three months ended March 31, 2004
was favorably impacted by lower provisions for state and local income taxes compared to the prior
year period.

Net earnings per common share for basic and diluted were $0.59 and $0.58, respectively, for the three
months ended March 31, 2004, compared with $0.52 and $0.52, respectively, for the same period last year.
Average common and common equivalent shares outstanding used in the calculation of net earnings per
common share on a basic and diluted basis were 56,203,000 and 57,094,000, respectively, for the three
months ended March 31, 2004 and 55,654,000 and 56,019,000, respectively, for the three months ended
March 31, 2003.

FINANCIAL CONDITION

Working Capital

Cash and cash equivalents at March 31, 2004 amounted to $98.3 million, compared with $71.7 million
at December 31, 2003. During the three months ended March 31, 2004, net cash provided by operating
activities totaled $38.3 million, net cash used by investing activities totaled $2.6 million and net cash
used by financing activities totaled $9.1 million.

Working capital was $733.7 million at March 31, 2004, compared with $703.2 million at December 31,
2003. The current ratio was 4.4-to-1 at March 31, 2004, compared to 4.8-to-1 at December 31, 2003.

Financing Arrangements

As of March 31, 2004, long-term debt consisted of the following in millions:

| |  | Revolving credit facility (unsecured) | $ | 300.0 |  |  | 
| |  | ------------------------------------- | - | ----- |  |  | 
| |  | Other                                 |   | 3.2   |  |  | 
| |  |                                       | $ | 303.2 |  |  | 

To meet short-term capital and other
financial  requirements,  the Company maintains a $550.0 million revolving credit
facility with    a group of financial  institutions.  The revolving credit facility
allows for the issuance of letters of credit and cash borrowings.    Letter of credit

---

outstandings  are limited to no more
than $150.0  million,  with cash  borrowings  limited only by the  facilitys    maximum
 availability less letters of credit outstanding.  On March 31, 2004, there were $300.0
million in cash borrowings and $20.8    million in letters of credit outstanding.

The  facility  requires the Company
to meet  certain  financial  covenants  including a minimum  consolidated  net worth and
maximum    leverage ratio. As of March 31, 2004, the Company was in compliance with all
financial covenants.

Cash  borrowings  under the
 revolving  credit  facility  bear  interest  at a base rate or at an adjusted
 Eurodollar  rate plus an    applicable margin which varies,  depending upon the type of
loan the Company executes.  The applicable margin over the base rate and    Eurodollar
rate is subject to adjustment based upon achieving  certain credit ratings.  At March 31,
2004, loans  outstanding  under    the revolving  credit facility  consisted of $300.0
million based on the adjusted  Eurodollar  rate,  which in conjunction  with the
   interest rate swaps (used to hedge $300.0 million of the floating rate debt), have a
weighted average interest rate of 6.12%.

The Company  believes that cash
generated from operations,  together with its revolving  credit  facility,  will be
adequate to meet    liquidity requirements for the foreseeable future.

Recently Issued Statements of
Financial Accounting Standards

In December 2003, the Financial
 Accounting  Standards Board (FASB) issued  Statement of Financial  Accounting  Standards
(SFAS) No.    132,  Employers  Disclosure  about  Pension and Other  Postretirement
 Benefits (an  amendment  of SFAS Nos. 87, 88 and 106).  This    statement revises
employers  disclosures about pension plans and other postretirement benefit plans. The
statement is effective for    financial  statements  with fiscal years ending after
December 15, 2003;  therefore,  the required  disclosures  are included in the    Notes
to Consolidated Financial Statements.

Subsequent Events

On April 1, 2004,  in order to
reduce the  impact of changes in  interest  rates on its  floating  rate  long-term
 debt,  the    Company entered into three interest rate swap  agreements  each having a
notional amount of $100.0 million.  The interest rate swaps    have a start date of May
10, 2004 (to coincide with the maturity dates of existing  interest rate swaps of similar
notional amounts)    and a term of three years.  The Company pays the  counterparties  a
blended fixed rate of 2.55% per annum and receives payment based    upon the floating
three-month LIBOR rate.

OUTLOOK

Orders in the first quarter of 2004
were up 8% over orders in the first quarter of 2003,  and were  consistently  strong
through the    months of January,  February and March. However, it must be remembered
that first quarter orders in 2003 were off nearly 7% from the    prior year,  as adverse
 weather  conditions  negatively  affected  the retail  business,  and  conflicts  in
 Afghanistan  and Iraq    contributed  to an overall soft economic  climate.  For this
reason,  although the Company has good  momentum  going into the second    quarter, it
does not expect its sales growth to track first quarter growth rates.

---

The Company is currently  projecting
 sales growth in the 4-5% range in the second quarter and diluted  earnings per common
share in    the $0.44 to $0.48 range.  This includes the effect of approximately  $0.04
per diluted common share  attributable to the previously    announced  closing of two
facilities at Drexel Heritage.  The Company will provide earnings guidance on a
 quarter-by-quarter  basis    until better visibility is achieved with respect to the
full year 2004.

FORWARD-LOOKING STATEMENTS

The Company herein has made
forward-looking  statements within the meaning of the safe harbor provisions of the
Private Securities    Litigation Reform Act of 1995. These  forward-looking  statements
include the Companys expected sales,  earnings per share,  profit    margins,  and cash
flows, the effects of certain  manufacturing  realignments and other business
 strategies,  the prospects for the    overall business environment and other statements
containing the words expects, anticipates,  estimates, believes, and words    of
similar import. The Company cautions investors that any such forward-looking  statements
are not guarantees of future performance    and that certain factors may cause actual
results to differ materially from those in the  forward-looking  statements.  Such
factors    include, but are not limited to: changes in economic conditions;  loss of
market share due to competition;  failure to anticipate or    respond to changes in
consumer tastes and fashion trends;  failure to achieve projected sales; business
failures of large customers;    distribution and 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;  impairment of    goodwill and other  intangible
 assets.  Other risk factors may be listed from time to time in the Companys  future
public releases    and SEC reports.  Please refer to the Company's  Annual Report on Form
10-K for a more detailed  explanation  of the Company's  risk    factors.

Item 3.   Quantitative and Qualitative
Disclosures about Market Risk

The Company is exposed to market
risk from changes in interest rates.  The Companys  exposure to interest rate risk
consists of its    floating rate revolving credit facility.  This risk is managed using
interest rate swaps to fix a portion of the Companys  floating    rate long-term debt.
Currently,  interest rate swaps fix the entire outstanding balance on the revolving
credit facility; therefore,    an increase in interest rates would have no impact on the
Companys net earnings.

Item 4.   Controls and Procedures

|(a) |  | The
Companys chief executive  officer and chief financial officer have concluded that the
Companys  disclosure  controls and          procedures  are effective  based on their
 evaluation of these  controls and procedures as of the end of the period covered by
         this report.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | No
change in the Companys  internal  control over  financial  reporting has occurred
 during the Companys most recent fiscal          quarter that has materially  affected,
 or is reasonably  likely to materially  affect,  the Companys  internal  control over
         financial reporting.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

PART II OTHER INFORMATION

Item 2.   Changes in Securities, Use
of Proceeds and Issuer Purchases

ISSUER PURCHASES OF EQUITY SECURITIES

| |  |  |  |             |  |  |           |  |   |           |  |  | Total Number     |  |   | Approximate Dollar | 
| |  |  |  | ----------- |  |  | --------- |  | - | --------- |  |  | ---------------- |  | - | ------------------ | 
| |  |  |  |             |  |  |           |  |   |           |  |  | of Shares        |  |   | Value of Shares    | 
| |  |  |  |             |  |  | Total     |  |   | Average   |  |  | Purchased as     |  |   | that May Yet       | 
| |  |  |  |             |  |  | Number    |  |   | Price     |  |  | Part of Publicly |  |   | Be Purchased       | 
| |  |  |  |             |  |  | of Shares |  |   | Paid      |  |  | Announced Plans  |  |   | Under the Plans    | 
| |  |  |  | Period      |  |  | Purchased |  |   | per Share |  |  | or Programs      |  |   | or Programs        | 
|
| |  |  |  | January 1-  | 
| |  |  |  | January 31  |  |  | --        |  |   | --        |  |  | --               |  | $ | 100,000,000        | 
|
| |  |  |  | February 1- | 
| |  |  |  | February 29 |  |  | --        |  |   | --        |  |  | --               |  |   | 100,000,000        | 
|
| |  |  |  | March 1-    | 
| |  |  |  | March 31    |  |  | 420,200   |  |   | 31.63     |  |  | 420,200          |  |   | 86,710,781         | 
| |  |  |  | Total       |  |  | 420,200   |  | $ | 31.63     |  |  | 420,200          |  | $ | 86,710,781         | 

On October
24, 2002, the Company announced the authorization of a program to repurchase $100 million
of its common stock over a period of 24 months. The authorization will expire on October
24, 2004.

Item 6.   Exhibits and Reports on
Form 8 -K

| | (a) | 31. |  | Certifications of W. G. Holliman, Chief Executive Officer of the Company           
| | --- | --- |  | -----------------------------------------------------------------------------------
| |     |     |  | and David P. Howard, Chief Financial Officer of the Company, Pursuant to Rule      
| |     |     |  | 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley      
| |     |     |  | Act of 2002.                                                                       
| |     |     |  |                                                                                    
| |     | 32. |  | Certifications of W. G. Holliman, Chief Executive Officer of the Company and       
| |     |     |  | David P. Howard, Chief Financial Officer of the Company, Pursuant to 18 U.S.C.     
| |     |     |  | Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

| | (b) |  | A Form 8-K was filed on January 21, 2004 announcing the refinancing of the     
| | --- |  | -------------------------------------------------------------------------------
| |     |  | Companys Credit Agreement, dated December 18, 2003. A Form 8-K was filed      
| |     |  | on February 3, 2004 announcing fourth quarter and full year operating results  
| |     |  | and projections of first quarter earnings per share. A Form 8-K was filed on   
| |     |  | February 18, 2004 and amended on February 20, 2004, announcing the election of 
| |     |  | John T. (Tom) Foy as President and Chief Operating Officer of the Company and  
| |     |  | the nomination of John T. (Tom) Foy and Aubrey B. Patterson as directors of the
| |     |  | Company.    A Form 8-K was filed on March 1, 2004 revising projections for the 

---

| |  |  | first quarter of 2004.   A Form 8-K was filed on May 3, 2004 announcing first 
| |  |  | ------------------------------------------------------------------------------
| |  |  | quarter operating results and projections of second quarter sales and earnings
| |  |  | per share.                                                                    

SIGNATURE

Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

| |    | Furniture Brands International, Inc.
| | -- | ------------------------------------
| |    | (Registrant)                        
|
|
| | By | /s/ Steven W. Alstadt               
| |    | Steven W. Alstadt                   
| |    | Controller and                      
| |    | Chief Accounting Officer            

Date:  May 13, 2004