Company Initiates Quarterly Cash Dividend
STANLEYTOWN, Va., Jan. 28 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported improved sales and earnings for
the fourth quarter and year ended December 31, 2002. The Company also
announced today that its Board of Directors initiated a quarterly cash
dividend policy.
Net sales of $63.3 million for the fourth quarter ended December 31, 2002
increased 12.3% over the same period in the prior year. Earnings for the
fourth quarter improved sharply from the comparable prior year quarter due to
higher sales, offshore sourcing initiatives, lower raw material cost and
improved capacity utilization. Fourth quarter 2002 earnings per share of $.59
compares to $.03 in the year ago quarter. Excluding restructuring and related
charges in the fourth quarter of 2001, earnings per share improved 84.4% to
$.59 for the fourth quarter of 2002 from $.32 in the prior year quarter.
Earnings per share exceeded the Company's guidance range of $.52 to $.57 as a
result of higher than expected sales.
Net sales of $239.5 million for total year 2002 increased 2.2% from the
prior year. Earnings per share improved to $1.85 in 2002 from $1.21 in 2001.
Operating income, excluding unusual and restructuring charges, improved 15.2%
to $25.9 million, or 10.8% of net sales, in 2002. Earnings per share,
excluding unusual and restructuring charges, grew 24.4% to $2.19 compared to
$1.76 last year. Cost savings resulting from closing the Company's former
West End, North Carolina facility, offshore sourcing initiatives and lower raw
material cost contributed to the improvement in operating margins.
Goodwill was not amortized in 2002 in accordance with new accounting
requirements. Goodwill amortization reduced earnings per share $.01 for the
fourth quarter and $.04 for total year 2001.
Strong cash flow of $17.8 million in 2002 was used to reduce debt $7.4
million, increase cash $7.3 million and purchase $3.1 million of the Company's
common stock. Approximately $4.9 million remains authorized by the Company's
Board of Directors to repurchase shares of the Company's common stock. Total
debt outstanding was $29.6 million and cash on hand was $9.2 million at
December 31, 2002.
"We are pleased to report solid operating performance despite a stagnant
economy and very difficult business conditions in the wood segment of the
furniture industry," said Albert L. Prillaman, chairman. "Customers are
responding favorably to our strategy and we expect recent market share gains
to continue."
Inaugural Cash Dividend
The Company announced today that its Board of Directors approved a cash
dividend policy and declared an initial quarterly dividend of 5 cents per
share payable on March 3, 2003, to shareholders of record on February 14,
2003. "Declaring a dividend demonstrates the Board's confidence in the
Company's strategy, growth opportunities and financial strength. We are
pleased to be able to return profits to our shareholders," noted Albert L.
Prillaman, chairman.
Business Outlook
"We are blending efficient domestic manufacturing capabilities in focused
facilities with intelligent outsourcing of certain component parts and
finished goods," commented Jeffrey R. Scheffer, president and chief executive
officer. "This combination allows us to offer higher value, well-styled
product without sacrificing our culture of high quality and quick delivery.
Approximately 20% of 2003 sales will come from sourced items. Transition
costs from ramping up sourcing activities along with increases in certain
marketing and product development costs will reduce near-term earnings.
However, we remain confident in our blended strategy and view this as an
investment in the Company's future growth."
"We anticipate sluggish economic conditions and the competitive pressures
of lower cost imported product to continue throughout 2003. Accordingly, any
sales increase achieved in 2003 will result from market share gains," Scheffer
concluded.
Management offers the following guidance for total year 2003:
* Net sales is expected to be in the range of $242 million to $252
million.
* Operating income is expected to be in the range of $27 million to $28
million.
* Earnings per share is expected to be in the range of $2.30 to $2.40.
* The Company's effective tax rate is expected to increase to 36.3% in
2003 from 35.5% in 2002 due to higher state taxes.
Management offers the following guidance for the quarter ending March 29,
2003:
* Net sales is expected to be in the range of $58 million to $61 million.
* Operating income is expected to be in the range of $5.7 million to $6.2
million.
* Earnings per share is expected to be in the range of $.47 to $.52.
Conference Call Details
The Company will host a conference call Wednesday morning, January 29, at
10:00 a.m. Eastern Time. The call will also be web cast live and archived on
the Company's web site at http://www.stanleyfurniture.com . The dial-in-
number is (706) 679-8542. A replay will be available through February 5,
2003. The dial-in-number for the replay is (706) 645-9291 with an access code
of 7547589.
Forward-Looking Statements
Certain statements made in this release 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 the Company's 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 competition in the furniture
industry including competition from lower-cost foreign manufacturers, the
Company's success in implementing its blended strategy of expanded offshore
sourcing and domestic manufacturing, disruptions in offshore sourcing
including those arising from supply or distribution disruptions or changes in
political or economic conditions affecting the countries from which the
Company obtains offshore sourcing, the cyclical nature of the furniture
industry, fluctuations in the price for lumber which is the most significant
raw material used by the Company, credit exposure to customers in the current
economic climate, capital costs and general economic conditions. Future
dividend payments will depend upon the financial condition, capital
requirements and earnings of the Company, as well as other factors that the
Board of Directors may deem relevant. Any forward-looking statement speaks
only as of the date of this press release, and the Company undertakes no
obligation to update or revise any forward-looking statements, whether as a
result of new developments or otherwise.
All earnings per share amounts are on a diluted basis.
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, NC. Its common stock is
traded on the Nasdaq stock market under the symbol STLY.
TABLES FOLLOW
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
Net sales $63,305 $56,350 $239,485 $234,322
Cost of sales 47,618 44,721 180,905 181,356
Restructuring and
related charges (1) 2,290 3,548 2,290
Gross profit 15,687 9,339 55,032 50,676
Selling, general and
administrative expenses 8,872 7,691 32,671 30,482
Restructuring and
related charges (1) 733 733
Unusual charge(2) 2,800
Operating income 6,815 915 22,361 16,661
Other expense (income), net (52) 23 (219) 47
Interest expense 743 912 3,090 4,007
Income before income taxes 6,124 (20) 19,490 12,607
Income taxes 2,174 (204) 6,919 4,286
Net income $3,950 $184 $12,571 $8,321
Net income:
Before restructuring and
unusual charges $3,950 $2,179 $14,859 $12,164
Restructuring and
related charges (1) 1,995 2,288 1,995
Unusual charge(2) 1,848
Reported net income $3,950 $184 $12,571 $8,321
Diluted earnings per share:
Before restructuring and
unusual charges $0.59 $0.32 $2.19 $1.76
Restructuring and
related charges (1) 0.29 0.34 0.29
Unusual charge(2) 0.26
Diluted earnings per share $0.59 $0.03 $1.85 $1.21
Weighted average number
of shares 6,661 6,852 6,782 6,900
(1) 2002 and 2001 amounts represent net restructuring and related charges
for realignment of the Company's manufacturing facilities.
(2) To write-off receivables due to the liquidation of a former customer.
STANLEY FURNITURE COMPANY, INC.
Condensed Consolidated Balance Sheets
(in thousands)
December 31,
2002 2001
Assets
Current assets:
Cash $9,227 $1,955
Accounts receivable, net 27,832 23,862
Inventories 54,158 49,522
Prepaid expenses and other current assets 1,311 2,354
Deferred income taxes 2,876 3,153
Total current assets 95,404 80,846
Property, plant, and equipment, net 59,539 66,708
Goodwill 9,072 9,072
Other assets 8,470 6,377
Total assets $172,485 $163,003
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $6,914 $6,839
Accounts payable 13,386 11,841
Accrued expenses 12,160 10,895
Total current liabilities 32,460 29,575
Long-term debt 22,700 30,214
Deferred income taxes 13,084 11,251
Other long-term liabilities 4,554 4,669
Stockholders' equity 99,687 87,294
Total liabilities and
stockholders' equity $172,485 $163,003
SOURCE Stanley Furniture Company, Inc.
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Related links:
http://www.stanleyfurniture.com
Company News On-Call:
http://www.prnewswire.com/comp/117677.html
CONTACT:
Douglas I. Payne, Executive V.P., Finance and
Administration, +1-276-627-2157, dpayne@stanleyfurniture.com, or
Anita W. Wimmer, Treasurer, +1-276-627-2446, or
awimmer@stanleyfurniture.com, both of Stanley Furniture Company,
Inc.
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