Record First Quarter Sales
STANLEYTOWN, Va., April 18 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported record sales for the first
quarter of 2006. Sales and earnings were within management's previous
guidance provided in late January 2006.
Net sales of $83.5 million increased 0.7% from record first quarter
sales in 2005. Earnings per share of $.43 equaled the record earnings in
the first quarter of last year.
Operating income declined to $8.6 million, or 10.3% of net sales, in
the first quarter of 2006 from $9.4 million, or 11.3% of net sales, in the
first quarter of 2005. Lower margins resulted from operational
inefficiencies, lower production levels, and higher raw material,
compensation and energy costs.
Working capital, excluding cash and current maturities of long-term
debt, decreased $4.0 million during the first quarter to $77.5 million from
$81.5 million at December 31, 2005. Total inventories of $65.1 million have
decreased $4.8 million and $6.6 million since December 31, 2005 and the
year- ago quarter, respectively. Strong cash flow in the first quarter was
used to purchase $1.3 million of the Company's common stock, pay cash
dividends of $982,000 and increase the Company's cash on hand $9.4 million.
Approximately $15.9 million remains authorized by the Company's Board of
Directors to repurchase shares of the Company's common stock. At April 1,
2006, total debt outstanding was $11.4 million and cash on hand amounted to
$21.9 million.
Business Outlook
"We are pleased to report record sales, solid earnings and
exceptionally strong cash flow for the first quarter of 2006," commented
Jeffrey R. Scheffer, chairman, president and chief executive officer. "The
softness in industry sales that began in the latter half of last year has
continued into 2006 with inconsistent demand patterns. Recent business
conditions have been softer than we anticipated and has caused us to
modestly lower our sales projections for 2006. Recently, we began
reinvigorating our continuous improvement efforts using lean manufacturing
principles, to improve processes and efficiencies. Near term, as these
efforts allow us to continue reducing inventories, we anticipate lower
production levels and operating margins. How quickly and to what extent we
are able to lower costs, improve quality and reduce inventories is
difficult to project, but we are confident this will position the Company
to better compete primarily as a domestic manufacturer, execute our
strategy and deliver value," concluded Scheffer.
Management offers the following guidance for total year 2006.
* Net sales are expected to be in the range of $335 million to $345
million, an increase of 0.4% to 3.4% over the prior year.
* Operating income is expected to be in the range of $35.8 million to
$36.8 million.
* The Company's effective tax rate is expected to be 35.1% in 2006.
* Earnings per share are expected to be in the range of $1.78 to $1.84
compared to $1.77 for 2005.
Management offers the following guidance for the quarter ending July 1,
2006.
* Net sales are expected to be in the range of $79.5 million to $82.0
million, a decrease of 2% to 5% over the second quarter of 2005.
* Operating income is expected to be in the range of $7.0 million to $7.6
million.
* Earnings per share are expected to be in the range of $.35 to $.38
compared to record earnings of $.44 per share in the year-ago quarter.
Other Information
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, 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 Wednesday morning, April 19, at
9:00 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 April 26, 2006) is (877) 660-6853, the account reference
number is 275 and the conference number is 197261.
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
April 1, April 2,
2006 2005
Net sales $83,524 $82,950
Cost of sales 63,766 62,485
Gross profit 19,758 20,465
Selling, general and administrative
expenses 11,128 11,051
Operating income 8,630 9,414
Other income, net 93 65
Interest income 110 51
Interest expense 524 569
Income before income taxes 8,309 8,961
Income taxes 2,917 3,201
Net income $5,392 $5,760
Diluted earnings per share $0.43 $0.43
Weighted average number of shares 12,567 13,400
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
April 1, April 2, Dec 31,
2006 2005 2005
Assets
Current assets:
Cash $21,918 $17,272 $12,556
Accounts receivable, net 40,234 40,599 36,957
Inventories 65,117 71,678 69,961
Prepaid expenses and
other current assets 957 955 1,435
Deferred income taxes 2,482 2,409 2,462
Total current assets 130,708 132,913 123,371
Property, plant and equipment,
net 49,511 51,155 50,744
Goodwill 9,072 9,072 9,072
Other assets 6,984 6,701 7,301
Total assets $196,275 $199,841 $190,488
Liabilities and Stockholders'
Equity
Current liabilities:
Current maturities of
long-term debt $2,857 $4,257 $2,857
Accounts payable 16,463 17,292 16,405
Accrued expenses 14,778 14,856 12,909
Total current
liabilities 34,098 36,405 32,171
Long-term debt 8,571 11,428 8,571
Deferred income taxes 9,974 10,488 10,164
Other long-term liabilities 6,793 6,667 6,833
Stockholders' equity 136,839 134,853 132,749
Total liabilities and
stockholders' equity $196,275 $199,841 $190,488
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
April 1, April 2,
2006 2005
Cash flows from operating activities:
Cash received from customers $80,251 $78,365
Cash paid to suppliers and employees (68,651) (67,967)
Interest received 110 45
Income taxes paid, net (495) (269)
Net cash provided by operating
activities 11,215 10,174
Cash flows from investing activities:
Capital expenditures (216) (1,196)
Other, net (17) (6)
Net cash used by investing activities (233) (1,202)
Cash flows from financing activities:
Purchase and retirement of common stock (1,252) (1,868)
Dividends paid (982) (778)
Tax benefit from exercise of
stock options 161
Proceeds from exercise of stock options 453 3,314
Net cash (used) provided by
financing activities (1,620) 668
Net increase in cash 9,362 9,640
Cash at beginning of period 12,556 7,632
Cash at end of period $21,918 $17,272
Reconciliation of net income to net cash
provided by operating activities:
Net income $5,392 $5,760
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,464 1,402
Deferred income taxes (210) (249)
Stock-based compensation 72
Tax benefit from exercise of stock
options (161)
Loss on disposal of assets 6
Changes in working capital 4,379 2,836
Other assets 312 453
Other long-term liabilities (39) (28)
Net cash provided by operating
activities $11,215 $10,174
SOURCE Stanley Furniture Company, Inc.
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Related links:
http://www.stanleyfurniture.com
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, Vice President -
Controller and Treasurer, +1-276-627-2446,
awimmer@stanleyfurniture.com, both of Stanley Furniture Company,
Inc.
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