• Stanley Furniture (STLY) Announces Quarterly Earnings Results, Misses Estimates By $0.05 EPS

    Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY) today reported sales and operating results for 2011.

    The Company continued its trend of improved operating performance during the fourth quarter of 2011. Net loss for the fourth quarter was $1.7 million excluding $2.9 million in CDSOA income and a small restructuring credit. Both operating and net losses, excluding CDSOA income, were comparable to the third quarter despite a 5.5% sequential sales decline to $24.6 million.

    Net loss for the year improved to $8.6 million from $26.6 million in 2010, after making adjustments for CDSOA income and restructuring charges. Net sales for the year decreased by 23.6% to $104.6 million. “Last year was transformational for our company as we and our customers dealt with the challenges associated with product line and operational restructuring. We are very pleased with our improvements over the previous year as our financial results reflect the impact of our strategic decisions to align operations with customer demand for differentiated product. Sales results reflect both the lack of dependable service to our customers caused by each product line transitioning into new operating models, as well as the sluggish retail environment for case goods furniture in the premium segment,” said Glenn Prillaman, President and Chief Executive Officer.

    Cash on hand at December 31, 2011 was $17.3 million, including $1.6 million in restricted cash. Working capital, excluding cash and restricted cash, increased from $27.2 million on December 31, 2010 to $28.8 million at year-end due mostly to a build in finished goods inventory to support the Stanley Furniture product line which is now completely sourced overseas. “Protecting the strength of our balance sheet remains a top priority as we invest in our business to improve in three main areas: modernizing our Young America manufacturing facility in North Carolina; servicing customers and supporting the growth of the Stanley Furniture product line with sufficient investment in finished goods inventory; and initiating customer care efforts to communicate timely and accurate information," added Prillaman.
    The Company detailed further the capital investments associated with its initiatives to modernize its domestic manufacturing facility and to better care for its customers. “We are committed to completing our efforts to reinvent a manufacturing process in Robbinsville, NC to compete globally and occupy a meaningful space in the children’s furniture marketplace. Our capital investments last year and those we will make in 2012 show this commitment. In 2011, we invested $4.2 million in new machinery and equipment and in 2012 we are planning an additional investment of approximately $4 million to sufficiently automate this plant,” said Micah Goldstein, Chief Operating and Financial Officer. “In addition, our customers currently require better information supporting the sale and delivery of our products. We are excited about our plan to invest approximately $3 million over the next two years in new systems that will make doing business with our company more desirable as we enter 2013,” concluded Goldstein.

    “Our Stanley Furniture product line is now profitable, operating on an exclusively overseas manufacturing platform. The Stanley Furniture product line now represents a strong value alternative to the luxury segment of the wood residential home furnishings market and we are beginning to see an increase in order activity,” said Prillaman. “However, we have not completed the transition of our Young America product line and have not yet become a profitable domestic manufacturer. We believe we are roughly half of the way through this journey and, when completed, we will have an Internet-age brand ready for the younger consumer supported by a product offering difficult to duplicate from Asia. As a domestic operation, we are in control of our effort to create a flexible manufacturing footprint that enables a more favorable cost structure, shorter lead times and higher inventory turns. Significant improvements in our Robbinsville facility have been made to date and will continue throughout the coming year,” concluded Prillaman.

    All earnings per share amounts are on a fully diluted basis.
    Established in 1924, Stanley Furniture Company, Inc. is a leading designer, manufacturer and importer of wood furniture targeting the premium segment of the residential market. Its common stock is traded on the NASDAQ stock market under the symbol STLY.