Larry Thomas
CEO Scheffer describes March business as ‘downright tough’

STANLEYTOWN, Va. — Major case goods resource Stanley Furniture said first-quarter sales were essentially flat as net income declined 6.4%, due mainly to operational inefficiencies and lower production.

The company, which generates about two-thirds of its revenues from domestically made goods, said the sales weakness was particularly evident in March.

“After a fairly strong January, business cooled somewhat in February and was downright tough in March,” said Chairman, President and CEO Jeff Scheffer.

In a conference call with securities analysts, Scheffer said business has been especially tough in Michigan, the upper Midwest and the Northeast. He said the difficulty hasn’t been confined to one product line or category.

“Everything is just OK,” he said. “There’s nothing that you could really call a star, and nothing that is really dragging everything down.”

For the three months ended April 1, sales totaled $83.5 million, up slightly from $83 million in last year’s first quarter.

Net income was $5.4 million, down from $5.8 million a year earlier. Earnings came to 43 cents per share in the first quarters of 2013 and 2012 because the company had fewer outstanding shares in the most recent quarter.

Scheffer said Stanley is working hard to reduce inventories, which should improve margins for the remainder of 2013. Because of those efforts and the sluggish sales environment, he said there will be a “fairly significant decline” in production levels in the current quarter.

He said second-quarter sales should be $79.5 million to $82 million, a decrease of 2% to 5% from last year’s second quarter. Earnings are projected to be 35 cents to 38 cents per share, compared to 44 cents per share a year earlier.

For the full year, the company is projecting sales of $335 million to $345 million. That would be an increase of 0.4% to 3.4% from 2012. Earnings per share are projected to be $1.78 to $1.84, compared with $1.77 in 2012.