Earnings Per Share Increase 21% on Sales Gain of 16 Percent
STANLEYTOWN, Va., April 25 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported record sales and earnings for the
first quarter of 2005. Both sales and earnings modestly exceeded the high end
of management's previous guidance provided in early February 2005.
Net sales of $83.0 million increased 16.0% and earnings per share grew
21.1% to $.86 from the first quarter of last year. This marks the twelfth
consecutive quarter of sales growth and the sixth consecutive quarter of
double digit sales gains over the comparable prior year quarter.
Operating income rose to $9.4 million, or 11.3% of net sales, in the first
quarter of 2005 from $7.8 million, or 10.9% of net sales, in the first quarter
of 2004. 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 operating efficiencies drove the improvement. These
improvements were partially offset by inflation in raw materials, compensation
costs, energy and freight costs, increased warehouse expense and tariffs
imposed on wooden bedroom furniture imported from China.
Strong cash flow in the first quarter was used to purchase $1.9 million of
the Company's common stock, pay cash dividends of $778,000 and increase the
Company's cash on hand $9.6 million. Approximately $8.3 million remains
authorized by the Company's Board of Directors to repurchase shares of the
Company's common stock. At April 2, 2005, the Company was in a net cash
position with total debt outstanding of $15.7 million and cash on hand of
$17.3 million.
Business Outlook
"We are pleased to report another quarter of significant progress,"
commented Jeffrey R. Scheffer, president and chief executive officer. For the
most recent four quarters our sales have increased 15.6% from the previous
four quarter period. "We believe market share gains are driving 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 the second
quarter with considerable momentum and anticipate 2005 to be another good
year."
Management offers the following guidance for total year 2005.
* Net sales are expected to be in the range of $330 million to $340
million, an increase of 8% to 11% 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 July 2,
2005.
* Net sales are expected to be in the range of $79.0 million to $81.5
million, an increase of 9% to 13% over the second quarter of 2004.
* Operating income is expected to be in the range of $8.4 million to $9.0
million.
* Earnings per share are expected to be in the range of $.76 to $.81
compared to record earnings of $.80 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 Tuesday morning, April 26, 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 May 2, 2005) is (877) 660-6853, the account reference number is 275
and the conference number is 146014.
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. 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
April 2, Mar 27,
2005 2004
Net sales $82,950 $71,520
Cost of sales 62,485 54,299
Gross profit 20,465 17,221
Selling, general and administrative expenses 11,051 9,417
Operating income 9,414 7,804
Other income, net 65 53
Interest income 51 6
Interest expense 569 632
Income before income taxes 8,961 7,231
Income taxes 3,201 2,624
Net income $5,760 $4,607
Diluted earnings per share $0.86 $0.71
Weighted average number of shares 6,700 6,449
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
April 2, Mar 27, Dec 31,
2005 2004 2004
Assets
Current assets:
Cash $17,272 $5,351 $7,632
Accounts receivable, net 40,599 36,141 36,036
Inventories 71,678 56,341 73,658
Prepaid expenses and other
current assets 955 1,105 1,585
Deferred income taxes 2,409 2,855 2,414
Total current assets 132,913 101,793 121,325
Property, plant and equipment, net 51,155 53,804 51,342
Goodwill 9,072 9,072 9,072
Other assets 6,701 6,836 7,149
Total assets $199,841 $171,505 $188,888
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term
debt $4,257 $2,728 $4,257
Accounts payable 17,292 15,069 16,056
Accrued expenses 14,856 13,470 12,445
Total current liabilities 36,405 31,267 32,758
Long-term debt 11,428 15,686 11,428
Deferred income taxes 10,488 11,386 10,742
Other long-term liabilities 6,667 6,029 6,695
Stockholders' equity 134,853 107,137 127,265
Total liabilities and
stockholders' equity $199,841 $171,505 $188,888
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
April 2, Mar 27,
2005 2004
Cash flows from operating activities:
Cash received from customers $78,365 $65,556
Cash paid to suppliers and employees (67,967) (57,613)
Interest received (paid), net 45 (160)
Income taxes paid, net (269) (250)
Net cash provided by operating activities 10,174 7,533
Cash flows from investing activities:
Capital expenditures (1,196) (44)
Other, net (6) (88)
Net cash used by investing activities (1,202) (132)
Cash flows from financing activities:
Repayment of senior notes (4,286)
Purchase and retirement of common stock (1,868)
Dividends paid (778) (622)
Proceeds from exercise of stock options 3,314 349
Net cash provided (used) by financing
activities 668 (4,559)
Net increase in cash 9,640 2,842
Cash at beginning of period 7,632 2,509
Cash at end of period $17,272 $5,351
Reconciliation of net income to
net cash provided by operating activities:
Net income $5,760 $4,607
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,402 1,421
Deferred income taxes (249) (1,174)
Changes in working capital 2,836 1,284
Other assets 453 243
Other long-term liabilities (28) 1,152
Net cash provided by operating activities $10,174 $7,533
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,
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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