2005 Earnings Per Share Increase 11.3% on 9.1% Sales Gain
STANLEYTOWN, Va., Jan. 30 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported record sales and earnings for
2005. Sales were at the low end and earnings exceeded management's previous
guidance range provided in mid October 2005.
Net sales of $333.6 million rose 9.1% over the prior year. Earnings per
share grew 11.3% to $1.77 in 2005 from $1.59 in 2004.
Fourth quarter sales of $81.4 million decreased 2.2% from record fourth
quarter sales in 2004. However, earnings per share grew 7.0% to $.46 compared
to $.43 in the fourth quarter of 2004.
Operating income for 2005 improved to $37.4 million, or 11.2% of net
sales, from $34.7 million, or 11.3% of net sales, for the prior year. The
favorable impact of higher sales in 2005 was mitigated by higher raw material
costs, compensation costs, energy costs, freight costs, increased warehouse
expense and tariffs imposed on wooden bedroom furniture imported from China.
Strong cash flow from operations for 2005 was used to purchase $23.0
million of the Company's common stock (including $13.0 million in the fourth
quarter), pay cash dividends of $3.1 million, repay $4.3 million of debt, and
increase cash on hand $4.9 million. Working capital, excluding cash and
current maturities of long-term debt, decreased $3.7 million in 2005 primarily
due to lower inventories. Approximately $17.2 million is currently authorized
by the Company's Board of Directors to repurchase shares of the Company's
common stock. At December 31, 2005, the Company was in a net cash position
with total debt outstanding of $11.4 million and cash on hand of $12.6
million.
Business Outlook
"We are pleased to report a record year of sales and earnings," commented
Jeffrey R. Scheffer, President and Chief Executive Officer. "While industry
sales trends were positive in 2005, we believe the consistent execution of our
strategy has resulted in market share gains that drove most of our sales
growth. Fourth quarter sales declined 2.2% ending a string of fourteen
consecutive quarters of year over year sales growth, punctuating an industry
slow down that began during the third quarter. As a result, we enter 2006
cautiously, mindful of an uncertain demand environment yet confident in our
ability to continue to gain market share and anticipate another good year."
Management offers the following guidance for total year 2006.
* Net sales are expected to be in the range of $340 million to $350
million, an increase of 2% to 5% over the prior year.
* Operating income is expected to be in the range of $37.3 million to
$38.3 million.
* The Company's effective tax rate is expected to be in the range of 35.0%
to 35.3% in 2006.
* Earnings per share are expected to be in the range of $1.84 to $1.90
compared to $1.77 for 2005.
Management offers the following guidance for the quarter ending April 1,
2006.
* Net sales are expected to be in the range of $81 million to $84 million,
ranging from a decrease of 2% to an increase of 1% over the first
quarter of 2005.
* Operating income is expected to be in the range of $8.7 million to $9.3
million.
* Earnings per share are expected to be in the range of $.43 to $.46
compared to $.43 in the year-ago quarter.
Other Information
All earnings per share amounts are on a diluted basis and adjusted for the
two-for-one stock split distributed on June 6, 2005.
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.
Conference Call Details
The Company will host a conference call Tuesday morning, January 31, 2006
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
http://www.stanleyfurniture.com. The dial-in-number for the replay (available
through February 7, 2006) is (877) 660-6853, the account reference number is
275 and the conference number is 187607.
Forward-Looking Statements
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 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 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 raise
prices in response to inflation and increasing costs, the cyclical nature of
the furniture industry, the inability to obtain sufficient quantities of
quality raw materials in a timely manner, failure to anticipate or respond to
changes to consumer tastes and fashions in a timely manner, business failures
or loss of large customers, environmental compliance costs, and extended
business interruption at manufacturing facilities.
Any forward-looking statement speaks only as of the date of this filing,
and we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new developments or otherwise.
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2005 2004
Net sales $81,446 $83,269 $333,646 $305,815
Cost of sales 61,318 62,509 251,937 230,174
Gross profit 20,128 20,760 81,709 75,641
Selling, general and
administrative expenses 10,871 11,361 44,267 40,953
Operating income 9,257 9,399 37,442 34,688
Other income, net 98 43 288 188
Interest Income 109 21 358 43
Interest expense 521 577 2,183 2,386
Income before income
taxes 8,943 8,886 35,905 32,533
Income taxes 3,101 3,200 12,674 11,744
Net income $5,842 $5,686 $23,231 $20,789
Diluted earnings per
share $0.46 $0.43 $1.77 $1.59
Weighted average number
of shares 12,806 13,284 13,154 13,099
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Dec 31, Dec 31,
2005 2004
Assets
Current assets:
Cash $12,556 $7,632
Accounts receivable, net 36,957 36,036
Inventories 69,961 73,658
Prepaid expenses and other current assets 1,435 1,585
Deferred income taxes 2,462 2,414
Total current assets 123,371 121,325
Property, plant, and equipment, net 50,744 51,342
Goodwill 9,072 9,072
Other assets 7,301 7,149
Total assets $190,488 $188,888
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $2,857 $4,257
Accounts payable 16,405 16,056
Accrued expenses 12,909 12,445
Total current liabilities 32,171 32,758
Long-term debt 8,571 11,428
Deferred income taxes 10,164 10,742
Other long-term liabilities 6,833 6,695
Stockholders' equity 132,749 127,265
Total liabilities and stockholders'
equity $190,488 $188,888
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Twelve Months Ended
Dec 31, Dec 31,
2005 2004
Cash flows from operating activities:
Cash received from customers $333,233 $300,429
Cash paid to suppliers and employees (287,559) (278,509)
Interest paid, net (1,792) (2,387)
Income taxes paid, net (11,080) (9,061)
Net cash provided by operating
activities 32,802 10,472
Cash flows from investing activities:
Capital expenditures (4,986) (1,718)
Other, net (33) (135)
Net cash used by investing activities (5,019) (1,853)
Cash flows from financing activities:
Repayment of senior notes (4,257) (7,015)
Purchase and retirement of common stock (22,993) -
Dividends paid (3,081) (2,517)
Proceeds from insurance policy loans 1,110 993
Proceeds from exercise of stock options 6,362 5,043
Net cash used by financing activities (22,859) (3,496)
Net increase in cash 4,924 5,123
Cash at beginning of period 7,632 2,509
Cash at end of period $12,556 $7,632
Reconciliation of net income to
net cash provided by operating
activities:
Net income $23,231 $20,789
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,670 5,622
Deferred income taxes (609) (1,327)
Changes in working capital 4,168 (16,357)
Other assets 248 66
Other long-term liabilities 94 1,679
Net cash provided by operating activities $32,802 $10,472
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 Vice President -
Finance and Administration, +1-276-627-2157, e-mail:
dpayne@stanleyfurniture.com or Anita W. Wimmer, Vice President -
Controller and Treasurer, +1-276-627-2446, e-mail:
awimmer@stanleyfurniture.com, both of Stanley Furniture Company,
Inc.
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