Earnings Per Share Increase 36.5 Percent on Sales Gain of 14.6 Percent
STANLEYTOWN, Va., April 13 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported higher sales and earnings for the
first quarter of 2004. Both sales and earnings exceeded management's upwardly
revised guidance for the quarter issued in mid-March. Customer orders
exceeded management's expectations for the second half of March and, due to
the Company's ability to respond quickly, resulted in higher than expected
sales.
Net sales of $70.2 million increased 14.6% from the first quarter of last
year. This marks the eighth consecutive quarter of sales growth over the
comparable prior year quarter. Earnings per share grew 36.5% to $.71 compared
to $.52 in the first quarter of 2003.
Operating income rose to $7.8 million, or 11.1% of net sales, in the first
quarter of 2004 from $6.1 million, or 10.0% of net sales, in the first quarter
of 2003. Higher sales, increased production levels at the Company's domestic
facilities, although at a slower growth rate than sales due to the growth of
sourced items, and savings from sourcing initiatives drove the improvement.
Approximately 26% of sales came from sourced items in the first quarter of
2004. Management expects sales from sourced items to level off around 30% of
sales for total year 2004.
Strong cash flow from operations was used to reduce debt $4.3 million, pay
cash dividends of $622,000 and increase the Company's cash on hand $2.8
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 $18.4 million and cash on hand was $5.4 million at March
27, 2004.
Business Outlook
"We are pleased to report our eighth consecutive quarter of year-over-year
sales growth," commented Jeffrey R. Scheffer, president and chief executive
officer. "As we have previously reported, the significant sales momentum
which began last summer continued through the first quarter and into early
April. It appears that improved economic conditions are finally producing
positive industry growth. However, we believe a large portion of our sales
growth continued to come from market share gains. While it is difficult to
forecast market share gains in advance, this has caused us to raise our sales
and earnings guidance for 2004 as outlined below.
Our focus is to create exciting designs, produce high-quality product and
provide excellent service," Scheffer continued. "Best product is determined
by both design and price. Blending efficient domestic manufacturing in highly
focused facilities with intelligent outsourcing of certain component parts and
finished goods allows us to offer a compelling value proposition. This
combination gives Stanley a competitive advantage by offering higher value and
well-styled product, without sacrificing our culture of high quality and fast
delivery. Our market share gains provide encouraging evidence that our
customers are responding favorably and that we are executing the strategy
well," Scheffer concluded.
Management offers the following guidance for total year 2004:
* Net sales are expected to be in the range of $280 million to $290
million, an increase of 7% to 11% over the prior year.
* Operating income is expected to be in the range of $30.3 million to
$31.9 million.
* The Company's effective tax rate is expected to be in the range of 36.0%
to 36.5% for 2004 compared to 36.0% in 2003.
* Earnings per share are expected to be in the range of $2.75 to $2.90
compared to $2.34 for 2003.
Management offers the following guidance for the quarter ending June 26,
2004:
* Net sales are expected to be in the range of $67.5 million to $70.0
million, an increase of 10% to 14% over the second quarter of 2003.
* Operating income is expected to be in the range of $7.2 million to $7.7
million.
* Earnings per share are expected to be in the range of $.65 to $.70
compared to $.53 in the year-ago quarter.
All earnings per share 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.
Conference Call Details
The Company will host a conference call Wednesday morning, April 14, at
9:30 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 April 20, 2004. The dial-
in-number for the replay is (877) 660-6853, the account reference number is
6721 and the conference number is 99161.
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, 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. 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.
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended
Mar 27, Mar 29,
2004 2003
Net sales $70,222 $61,298
Cost of sales 53,001 46,676
Gross profit 17,221 14,622
Selling, general and administrative expenses 9,417 8,513
Operating income 7,804 6,109
Other income, net (53) (42)
Interest expense 626 711
Income before income taxes 7,231 5,440
Income taxes 2,624 1,974
Net income $4,607 $3,466
Diluted earnings per share $0.71 $0.52
Weighted average number of shares 6,449 6,679
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Mar 27, Mar 29, Dec 31,
2004 2003 2003
Assets
Current assets:
Cash $5,351 $10,583 $2,509
Accounts receivable, net 36,141 31,563 30,120
Inventories 56,341 52,629 54,638
Prepaid expenses and other
current assets 1,105 1,060 2,855
Deferred income taxes 2,855 2,876 2,855
Total current assets 101,793 98,711 92,977
Property, plant, and equipment, net 53,804 58,171 55,154
Goodwill 9,072 9,072 9,072
Other assets 6,836 8,230 7,000
Total assets $171,505 $174,184 $164,203
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term
debt $2,728 $6,914 $7,014
Accounts payable 15,069 15,267 10,595
Accrued expenses 13,470 13,775 10,913
Total current liabilities 31,267 35,956 28,522
Long-term debt 15,686 18,414 15,686
Deferred income taxes 11,386 13,084 12,560
Other long-term liabilities 6,029 4,471 4,877
Stockholders' equity 107,137 102,259 102,558
Total liabilities and
stockholders' equity $171,505 $174,184 $164,203
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
Mar 27, Mar 29,
2004 2003
Cash flows from operating activities:
Cash received from customers $64,258 $57,523
Cash paid to suppliers and employees (56,315) (49,357)
Interest paid (160) (300)
Income taxes paid, net (250) (1,293)
Net cash provided by operating activities 7,533 6,573
Cash flows from investing activities:
Capital expenditures (44) (37)
Other, net (88)
Net cash used by investing activities (132) (37)
Cash flows from financing activities:
Repayment of senior notes (4,286) (4,286)
Purchase and retirement of common stock (566)
Dividends paid (622) (328)
Proceeds from exercise of stock options 349
Net cash used by financing activities (4,559) (5,180)
Net increase in cash 2,842 1,356
Cash at beginning of period 2,509 9,227
Cash at end of period $5,351 $10,583
Reconciliation of net income to net cash
provided by operating activities:
Net income $4,607 $3,466
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization 1,421 1,450
Deferred income taxes (1,174)
Changes in working capital 1,284 1,528
Other assets 243 212
Other long-term liabilities 1,152 (83)
Net cash provided by operating activities $7,533 $6,573
SOURCE Stanley Furniture Company, Inc.
 back to top
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,
dpayne@stanleyfurniture.com, or Anita W. Wimmer, Treasurer,
+1-276-627-2446, awimmer@stanleyfurniture.com, both of Stanley
Furniture Company, Inc.
|
