STANLEYTOWN, Va., April 15 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported increased sales and earnings for
the first quarter of 2003. Both sales and earnings were at the high end of
management's previous guidance for the quarter.
Net sales of $61.3 million increased 2.9% from the first quarter of last
year. This marks the fourth consecutive quarter of sales growth over the
comparable prior year period. Earnings per share improved to $.52 for the
first quarter of 2003 from $.27 in the prior year quarter. The first quarter
of last year included restructuring and related charges of $.27 per share from
closing a factory to realign the Company's manufacturing facilities.
Operating income increased to $6.1 million, or 10.0% of net sales, in the
first quarter of 2003 from $3.6 million, or 6.1% of net sales, in the first
quarter of 2002. As anticipated, after excluding restructuring and related
charges of $2.9 million in the prior year quarter, operating income decreased
due to transition costs from ramping up sourcing initiatives and increases in
certain marketing and product development costs.
Strong cash flow of $6.6 million in the first quarter of 2003 was used to
reduce debt $4.3 million, increase cash $1.4 million, purchase $566,000 of the
Company's common stock and pay cash dividends of $328,000. Approximately $4.4
million remains authorized by the Company's Board of Directors to repurchase
shares of the Company's common stock. Total debt outstanding was $25.3
million and cash on hand was $10.6 million at March 29, 2003.
"We are pleased to report solid operating performance including the fourth
consecutive quarter of year-over-year sales growth despite a sluggish economy
and very difficult business conditions in the wood segment of the furniture
industry," said Albert L. Prillaman, chairman. "We continue to implement our
strategy of 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.
Customers are responding favorably to our strategy as evidenced by recent
results and the continued positive response to the products introduced at the
just completed semi-annual International Home Furnishings Market."
"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 continue to impact near-term
earnings. Accordingly, we have modestly lowered our earnings guidance for
2003. However, we remain confident in our blended strategy and view this as
an investment in the Company's future growth," Scheffer continued.
"We expect recent market share gains to continue and believe we are well
positioned to capture pent-up demand created by recent exceptionally strong
housing activity once consumer confidence levels improve. However, 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, an increase of 1% to 5% over 2002.
* Operating income is expected to be in the range of $25.6 million to
$26.7 million.
* Earnings per share is expected to be in the range of $2.20 to $2.30
compared to $2.19, excluding restructuring and related charges of $.34,
for 2002.
* 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 June 28,
2003:
* Net sales is expected to be in the range of $57 million to $60 million,
an increase of 3% to 9% over the prior year quarter.
* Operating income is expected to be in the range of $5.4 million to $5.9
million.
* Earnings per share is expected to be in the range of $.45 to $.50
compared to $.45, excluding restructuring and related charges of $.08,
in the year-ago quarter.
Conference Call Details
The Company will host a conference call Wednesday morning, April 16, 2003
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
(706) 679-8542. A replay will be available through April 23, 2003. The dial-
in-number for the replay is (706) 645-9291 with an access code of 9474054.
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. 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.
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 29, March 30,
2003 2002
Net sales $ 61,298 $ 59,574
Cost of sales 46,676 45,106
Restructuring and related charges(1) 2,905
Gross profit 14,622 11,563
Selling, general and administrative expenses 8,513 7,917
Operating income 6,109 3,646
Other income, net 42 82
Interest expense 711 834
Income before income taxes 5,440 2,894
Income taxes 1,974 1,027
Net income $ 3,466 $ 1,867
Operating income:
Before restructuring and related charges $ 6,109 $ 6,551
Restructuring and related charges(1) 2,905
Reported operating income $ 6,109 $ 3,646
Net income:
Before restructuring and related charges $ 3,466 $ 3,741
Restructuring and related charges (1) 1,874
Reported net income $ 3,466 $ 1,867
Diluted earnings per share:
Before restructuring and related charges $ 0.52 $ 0.54
Restructuring and related charges (1) 0.27
Diluted earnings per share $ 0.52 $ 0.27
Weighted average number of shares 6,679 6,902
(1) 2002 amount represents restructuring and related charges for
realignment of the Company's manufacturing facilities.
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Mar. 29, Mar. 30, Dec. 31,
2003 2002 2002
Assets
Current assets:
Cash $ 10,583 $ 2,308 $ 9,227
Accounts receivable, net 31,563 29,999 27,832
Inventories 52,629 48,343 54,158
Prepaid expenses and other current assets 1,060 1,213 1,311
Deferred income taxes 2,876 3,153 2,876
Total current assets 98,711 85,016 95,404
Property, plant, and equipment, net 58,171 63,284 59,539
Goodwill 9,072 9,072 9,072
Other assets 8,230 6,215 8,470
Total assets $174,184 $163,587 $172,485
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 6,914 $ 6,839 $ 6,914
Accounts payable 15,267 14,701 13,386
Accrued expenses 13,775 10,549 12,160
Total current liabilities 35,956 32,089 32,460
Long-term debt 18,414 25,329 22,700
Deferred income taxes 13,084 11,251 13,084
Other long-term liabilities 4,471 4,588 4,554
Stockholders' equity 102,259 90,330 99,687
Total liabilities and stockholders'
equity $174,184 $163,587 $172,485
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
March 29, March 30,
2003 2002
Cash flows from operating activities:
Cash received from customers $ 57,523 $ 53,233
Cash paid to suppliers and employees (49,357) (48,512)
Interest paid, net (300) (472)
Income taxes paid, net (1,293) 277
Net cash provided by
operating activities 6,573 4,526
Cash flows from investing activities:
Capital expenditures (37) (67)
Proceeds from sale of assets 14
Net cash used by investing activities (37) (53)
Cash flows from financing activities:
Repayment of senior notes (4,286) (4,286)
Purchase and retirement of common stock (566)
Dividends paid (328)
Repayment of revolving credit
facility, net (600)
Proceeds from exercise of stock options 766
Net cash used by financing activities (5,180) (4,120)
Net increase in cash 1,356 353
Cash at beginning of period 9,227 1,955
Cash at end of period $ 10,583 $ 2,308
Reconciliation of net income to net
cash provided by operating activities:
Net income $ 3,466 $ 1,867
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization 1,450 1,553
Restructuring Charge 1,967
Loss on disposal of assets 14
Changes in working capital 1,528 (982)
Other assets 212 187
Other long-term liabilities (83) (80)
Net cash provided by operating activities $ 6,573 $ 4,526
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, or 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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