STANLEYTOWN, Va.–(BUSINESS WIRE)–Stanley Furniture Company, Inc. (NASDAQ-NGS:STLY) today
\n
\n\t\t
\n reported sales and earnings for the first quarter of 2014. Earnings were within management’s guidance range provided in January 2014.<\/p>\n
Net sales of $75.1 million decreased 10.1% from the first quarter of 2013. Earnings per share of $.15 compares to $.43 in the year-ago quarter. Both sales and earnings were at record levels in the first quarter of last year.<\/p>\n
Operating income declined to $3.1 million, or 4.1% of net sales, in the first quarter of 2014 from $8.6 million, or 10.3% of net sales, in the first quarter of 2013. Lower margins resulted from lower sales and production levels, operating inefficiencies and higher raw material and compensation costs. These factors were partially offset by lower performance based compensation expense due to lower earnings.<\/p>\n
Cash flow from operations together with cash on hand was used to repurchase 335,731 shares of the Company’s common stock for $7.3 million and pay cash dividends of $1.1 million in the first quarter of 2014. Working capital, excluding cash and current maturities of long-term debt, decreased $1.8 million during the first quarter of 2014 primarily due to a reduction in inventories. Approximately $25.3 million is currently authorized by the Company’s Board of Directors to repurchase shares of the Company’s common stock.<\/p>\n
Business Outlook<\/p>\n
“Our business has stabilized over the past few months and we experienced little change in overall sales trends since late last year”, commented Jeffrey R. Scheffer, President and Chief Executive Officer. “While we are disappointed with lower sales and earnings, we believe this is consistent with current industry-wide conditions.”<\/p>\n
“Near term, we will continue to focus on controlling costs and inventories, and improving our product offerings. Longer term, we remain focused on reducing costs, eliminating waste, and improving productivity, quality, and service through our continuous improvement efforts applying lean business principles,” concluded Scheffer.<\/p>\n
Management offers the following guidance. This guidance excludes any potential receipt of funds under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”) involving tariffs collected by the U.S. government on wooden bedroom furniture imported from China. As previously announced, the Company anticipates recording a charge to earnings ($6.0 million to $6.5 million, pre-tax) upon final termination of the Company’s defined benefit pension plan in the second quarter of 2014.<\/p>\n
Total year 2014 guidance:
\n\t\u00e2\u20ac\u00a2 \tNet sales are expected to be in the range of $300 million to $315 million, compared to $307.6 million in 2013.
\n\t\u00e2\u20ac\u00a2 \tOperating income is expected to be in the range of $18.5 million to $21.0 million (excluding a pre-tax charge to earnings of $6.0 million to $6.5 million for the pension plan termination).
\n\t\u00e2\u20ac\u00a2 \tEarnings per share are expected to be in the range of $1.00 to $1.15 (excluding a charge to earnings of $.37 to $.40 for the pension plan termination) compared to $1.17 for 2013, excluding income from CDSOA.<\/p>\n
Second quarter ending June 30, 2014 guidance:
\n\t\u00e2\u20ac\u00a2 \tNet sales are expected to be in the range of $69 million to $73 million, compared to sales of $77.5 million in the second quarter of 2013.
\n\t\u00e2\u20ac\u00a2 \tOperating income is expected to be in the range of $3.8 million to $4.4 million (excluding a pre-tax charge to earnings of $6.0 million to $6.5 million for the pension plan termination).
\n\t\u00e2\u20ac\u00a2 \tEarnings per share are expected to be in the range of $.19 to $.23 (excluding a charge to earnings of $.37 to $.40 for the pension plan termination) compared to $.32 in the year-ago quarter.<\/p>\n
Other Information<\/p>\n
All earnings per share amounts are on a diluted basis.<\/p>\n
Established in 1924, Stanley Furniture Company, Inc. is a leading manufacturer of wood furniture targeted at the upper-medium price range of the residential market. Manufacturing facilities are located in Stanleytown and Martinsville, Va. and Robbinsville and Lexington, N.C. Its common stock is traded on the Nasdaq stock market under the symbol STLY.<\/p>\n
Conference Call Details<\/p>\n
The Company will host a conference call Wednesday morning, April 18, 2014 at 9:00 a.m. Eastern Time. The dial-in-number is (877) 407-8029. The call will also be web cast and archived on the Company’s web site at www.stanleyfurniture.com. The dial-in-number for the replay (available through April 26, 2014) is (877) 660-6853, the account reference number is 275 and the conference number is 234375.<\/p>\n
Forward-Looking Statements<\/p>\n
Certain statements made in this report are not based on historical facts, but are forward-looking statements. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These statements reflect our reasonable judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include the cyclical nature of the furniture industry, competition in the furniture industry including competition from lower-cost foreign manufacturers, disruptions in offshore sourcing including those arising from supply or distribution disruptions or those arising from changes in political, economic and social conditions, as well as laws and regulations, in China or other countries from which we source products, international trade policies of the United States and countries from which we source products, manufacturing realignment, the inability to obtain sufficient quantities of quality raw materials in a timely manner, business failures or loss of large customers, the inability to raise prices in response to inflation and increasing costs, failure to anticipate or respond to changes to consumer tastes and fashions in a timely manner, environmental compliance costs and extended business interruption at manufacturing facilities.<\/p>\n
Any forward-looking statement speaks only as of the date of this press release, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
\n STANLEY FURNITURE COMPANY, INC.
\n Consolidated Operating Results
\n (in thousands, except per share data)
\n (unaudited)<\/p>\n
Three Months Ended
\n March 31, April 1,
\n 2014 2013
\n ———- ———-<\/p>\n
Net sales $ 75,108 $ 83,524<\/p>\n
Cost of sales 61,614 63,766<\/p>\n
———- ———-
\n Gross profit 13,494 19,758<\/p>\n
Selling, general and administrative
\n expenses 10,415 11,128
\n ———- ———-<\/p>\n
Operating income 3,079 8,630<\/p>\n
Other income (expense), net (68) 93
\nInterest income 27 110
\nInterest expense 517 524
\n ———- ———-
\n Income before income taxes 2,521 8,309<\/p>\n
Income taxes 845 2,917
\n ———- ———-
\n Net income $ 1,676 $ 5,392
\n ========== ==========<\/p>\n
Diluted earnings per share $ 0.15 $ 0.43
\n ========== ==========<\/p>\n
Weighted average number of shares 10,994 12,567
\n ========== ==========<\/p>\n
STANLEY FURNITURE COMPANY, INC.
\n Consolidated Condensed Balance Sheets
\n (in thousands)
\n (unaudited)<\/p>\n
March 31, April 1, Dec 31,
\n 2014 2013 2013
\n ———– ———- ———<\/p>\n
Assets
\nCurrent assets:
\n Cash $ 2,332 $ 21,918 $ 6,269
\n Accounts receivable, net 35,314 40,234 32,260
\n Inventories 56,267 65,117 59,364
\n Prepaid expenses and other
\n current assets 925 957 2,085
\n Deferred income taxes 3,817 2,482 3,928
\n ———– ———- ———<\/p>\n
Total current assets 98,655 130,708 103,906<\/p>\n
Property, plant and equipment, net 48,571 49,511 49,159
\nGoodwill 9,072 9,072 9,072
\nOther assets 223 6,984 541
\n ———– ———- ———<\/p>\n
Total assets $156,521 $196,275 $162,678
\n =========== ========== =========<\/p>\n
Liabilities and Stockholders’
\n Equity
\nCurrent liabilities:
\n Current maturities of long-
\n term debt $ 2,857 $ 2,857 $ 2,857
\n Accounts payable 17,053 16,463 17,789
\n Accrued expenses 12,431 14,778 11,224
\n ———– ———- ———<\/p>\n
Total current liabilities 32,341 34,098 31,870<\/p>\n
Long-term debt 5,714 8,571 5,714
\nDeferred income taxes 7,257 9,974 7,422
\nOther long-term liabilities 7,976 6,793 8,025<\/p>\n
Stockholders’ equity 103,233 136,839 109,647
\n ———– ———- ———<\/p>\n
Total liabilities and
\n stockholders’ equity $156,521 $196,275 $162,678
\n =========== ========== =========<\/p>\n
STANLEY FURNITURE COMPANY, INC.
\n Consolidated Condensed Statements of Cash Flows
\n (in thousands)
\n (unaudited)<\/p>\n
Three Months Ended
\n March 31, April 1,
\n 2014 2013
\n ————- ————–
\nCash flows from operating activities:
\n Cash received from customers $ 72,016 $ 80,251
\n Cash paid to suppliers and employees (66,003) (68,651)
\n Interest received 16 110
\n Income taxes paid, net (511) (495)
\n ————- ————–
\n Net cash provided by operating
\n activities 5,518 11,215
\n ————- ————–<\/p>\n
Cash flows from investing activities:
\n Capital expenditures (1,126) (216)
\n Other, net (17)
\n ————- ————–
\n Net cash used by investing activities (1,126) (233)
\n ————- ————–<\/p>\n
Cash flows from financing activities:
\n Purchase and retirement of common stock (7,252) (1,252)
\n Dividends paid (1,077) (982)
\n Tax benefit from exercise of stock
\n options 161
\n Proceeds from exercise of stock options 453
\n ————- ————–
\n Net cash used by financing activities (8,329) (1,620)
\n ————- ————–<\/p>\n
Net increase (decrease) in cash (3,937) 9,362
\nCash at beginning of period 6,269 12,556
\n ————- ————–<\/p>\n
Cash at end of period $ 2,332 $ 21,918
\n ============= ==============<\/p>\n
Reconciliation of net income to
\n net cash provided by operating
\n activities:
\n Net income $ 1,676 $ 5,392<\/p>\n
Adjustments to reconcile net income
\n to net cash used by operating
\n activities:
\n Depreciation and amortization 1,532 1,464
\n Deferred income taxes (55) (210)
\n Stock-based compensation 114 72
\n Tax benefit from exercise of stock
\n options (161)
\n Other 194 6
\n Changes in working capital 1,755 4,379
\n Other assets 351 312
\n Other long-term liabilities (49) (39)
\n ————- ————–
\n Net cash provided by operating
\n activities $ 5,518 $ 11,215
\n ============= ==============<\/p>\n
Contact:
\nStanley Furniture Company, Inc.
\nDouglas I. Payne, Executive Vice President –
\nFinance and Administration, 276-627-2157;
\ndpayne@stanleyfurniture.com or
\nAnita W. Wimmer, Vice President –
\nController and Treasurer, 276-627-2446;
\nawimmer@stanleyfurniture.com<\/p>\n","protected":false},"excerpt":{"rendered":"
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