Record Fourth Quarter Sales and Earnings;
20% Increase in Quarterly Cash Dividend
STANLEYTOWN, Va., Feb. 7 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported higher sales and earnings for the
fourth quarter and year ended December 31, 2004. Both sales and earnings
slightly exceeded the high end of management's previous guidance provided in
mid-October 2004. The Company also announced today that its Board of
Directors approved a 20% increase in its quarterly cash dividend to
stockholders.
Net sales of $83.3 million increased 12.4% and earnings per share grew
22.9% to $.86 from the fourth quarter of last year setting a new sales and
earnings record from any previous quarter in the Company's history. This
marks the eleventh consecutive quarter of sales growth over the comparable
prior year quarter and the fifth consecutive quarter of double digit sales
gains over the comparable prior year quarter.
Net sales of $305.8 million for total year 2004 increased 15.3% from the
prior year. Earnings per share improved 35.5% to $3.17 in 2004 compared to
$2.34 in 2003.
Operating income for 2004 improved to $34.7 million, or 11.3% of net
sales, from $26.2 million, or 9.9% of net sales, for the prior year. Higher
sales, increased production levels at the Company's domestic facilities,
although at a slower growth rate than sales due to the expansion of sourced
items, and savings from sourcing initiatives drove the improvement. These
improvements were partially offset by inflation in raw materials, compensation
costs, energy costs, higher selling expenses, tariffs imposed on wooden
bedroom furniture imported from China, and costs of complying with the
Sarbanes-Oxley Act.
Strong cash flow from operations for 2004 was used to reduce debt $7.0
million, pay cash dividends of $2.5 million, and increase cash on hand by $5.1
million. Approximately $10.2 million remains authorized by the Company's
Board of Directors to repurchase shares of the Company's common stock. Total
debt outstanding was $15.7 million and cash on hand was $7.6 million at
December 31, 2004.
Increase in Cash Dividend
The Company announced today that its Board of Directors approved a 20%
increase in its quarterly dividend to $.12 per share payable on March 7, 2005,
to shareholders of record on February 18, 2005. "Increasing the amount of the
cash dividend further demonstrates the Board's confidence in the Company's
strategy, growth opportunities and financial strength," noted Albert L.
Prillaman, chairman.
Business Outlook
"We are pleased to report another year of significant progress," commented
Jeffrey R. Scheffer, president and chief executive officer. "While industry
sales trends improved in 2004, we believe market share gains are driving most
of our sales growth. Blending efficient domestic manufacturing in our highly
focused facilities with intelligent outsourcing of certain component parts and
finished goods has allowed us to improve the styling and value of our
products. Combining this with our culture and reputation for high quality and
fast delivery differentiates us from our competition. We enter 2005 with
considerable momentum and anticipate another good year."
Management offers the following guidance for total year 2005.
* Net sales are expected to be in the range of $321 million to $331
million, an increase of 5% to 8% over the prior year.
* Operating income is expected to be in the range of $37.8 million to
$38.8 million.
* The Company's effective tax rate is expected to be in the range of 35.5%
to 36.0% in 2005.
* Earnings per share are expected to be in the range of $3.45 to $3.55
compared to $3.17 for 2004.
Management offers the following guidance for the quarter ending April 2,
2005.
* Net sales are expected to be in the range of $79.0 million to $81.5
million, an increase of 10% to 14% over the first quarter of 2004.
* Operating income is expected to be in the range of $8.6 million to $9.1
million.
* Earnings per share are expected to be in the range of $.78 to $.83
compared to $.71 in the year-ago quarter.
Management Succession Plans
The Company also announced today that Albert L. Prillaman plans to retire
from active management in April 2005, as the conclusion of the management
succession plan that began in 2001. At such time it is anticipated that
Jeffrey R. Scheffer will be elected Chairman of the Board in addition to his
current role as President and Chief Executive Officer. Mr. Prillaman plans to
continue as a director and to stay involved with the Company by serving as
lead director and liaison with the board on oversight matters and key
strategic initiatives.
Other Information
All earnings per share amounts are on a diluted basis.
Shipping revenues have historically been netted against related expenses
in cost of sales. The Company has reclassified these revenues to net sales
resulting in no impact on earnings.
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, February 8, at
9:00 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 (877) 407-8029. A replay will be available through February 14, 2005. The
dial-in-number for the replay is (877) 660-6853, the account reference number
is 6721 and the conference number is 117481.
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 executing its blended strategy of combining 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, international trade policies of the United
States and 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,
fluctuations in foreign freight cost, credit exposure to customers, 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.
TABLES FOLLOW
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,
2004 2003 2004 2003
Net sales $83,269 $74,052 $305,815 $265,263
Cost of sales 62,509 57,027 230,174 203,410
Gross profit 20,760 17,025 75,641 61,853
Selling, general and
administrative
expenses 11,361 9,554 40,953 35,637
Operating income 9,399 7,471 34,688 26,216
Other income, net (43) (53) (188) (203)
Interest expense 556 679 2,343 2,748
Income before
income taxes 8,886 6,845 32,533 23,671
Income taxes 3,200 2,413 11,744 8,521
Net income $5,686 $4,432 $20,789 $15,150
Diluted earnings per
share $0.86 $0.70 $3.17 $2.34
Weighted average number
of shares 6,642 6,322 6,549 6,462
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Dec 31, Dec 31,
2004 2003
Assets
Current assets:
Cash $7,632 $2,509
Accounts receivable, net 36,036 30,120
Inventories 73,658 54,638
Prepaid expenses and other
current assets 1,585 2,855
Deferred income taxes 2,414 2,855
Total current assets 121,325 92,977
Property, plant, and equipment, net 51,342 55,154
Goodwill 9,072 9,072
Other assets 7,149 7,000
Total assets $188,888 $164,203
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $4,257 $7,014
Accounts payable 16,056 10,595
Accrued expenses 12,445 10,913
Total current liabilities 32,758 28,522
Long-term debt 11,428 15,686
Deferred income taxes 10,742 12,560
Other long-term liabilities 6,695 4,877
Stockholders' equity 127,265 102,558
Total liabilities and
stockholders' equity $188,888 $164,203
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Twelve Months Ended
Dec 31, Dec 31,
2004 2003
Cash flows from operating activities:
Cash received from customers $300,429 $263,211
Cash paid to suppliers and employees (278,509) (236,334)
Interest paid (2,387) (2,793)
Income taxes paid, net (9,061) (9,740)
Net cash provided by operating
activities 10,472 14,344
Cash flows from investing activities:
Capital expenditures (1,718) (1,243)
Other, net (135) (104)
Net cash used by investing activities (1,853) (1,347)
Cash flows from financing activities:
Repayment of senior notes (7,015) (6,914)
Purchase and retirement of common stock - (14,788)
Dividends paid (2,517) (1,261)
Proceeds from insurance policy loans 993 888
Proceeds from exercise of stock options 5,043 2,360
Net cash used by financing activities (3,496) (19,715)
Net increase (decrease) in cash 5,123 (6,718)
Cash at beginning of period 2,509 9,227
Cash at end of period $7,632 $2,509
Reconciliation of net income to
net cash provided by operating
activities:
Net income $20,789 $15,150
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,622 5,783
Deferred income taxes (1,324) (463)
(Gain) Loss on sale of assets (3) 2
Changes in working capital (16,357) (6,403)
Other assets 66 57
Other long-term liabilities 1,679 218
Net cash provided by operating
activities $10,472 $14,344
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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