Earnings Per Share Increase 37.3% on 18.3% Sales Gain
STANLEYTOWN, Va., Oct. 11 /PRNewswire-FirstCall/ -- Stanley Furniture
Company, Inc. (Nasdaq: STLY) today reported increased sales and earnings for
the third quarter of 2004. Both sales and earnings exceeded management's
guidance for the quarter issued in mid-July.
Net sales of $77.2 million increased 18.3% from the third quarter of 2003,
marking the tenth consecutive quarter of sales growth over the comparable
prior year quarter. Earnings per share grew 37.3% to $.81 compared to $.59 in
the third quarter of last year.
For the first nine months of 2004, net sales of $218.1 million increased
16.1% over the comparable prior year period. Year-to-date earnings per share
grew 40.6% to $2.32 compared to $1.65 in the comparable 2003 period.
Operating income for the third quarter rose to $8.8 million, or 11.4% of
net sales, compared to $6.5 million, or 9.9% of net sales, for the comparable
2003 third quarter. For the nine months ending September 25, 2004, operating
income increased to $25.3 million, or 11.6% of net sales, from $18.7 million,
or 10.0% of net sales for the comparable 2003 period. 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. These improvements were offset by
inflation in raw materials, wages, employee benefits and energy costs, and
tariffs imposed on wooden bedroom furniture imported from China.
Approximately 27% of sales came from sourced items during the first nine
months of 2004. Management expects sales from sourced items to level off
around 30% of sales in the fourth quarter.
Cash flow in the first nine months of 2004 and available cash was used to
reduce debt $5.6 million and pay cash dividends of $1.9 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 $17.1 million and cash on hand was $2.2 million at September
25, 2004.
Business Outlook
"We are pleased to report our tenth consecutive quarter of year-over-year
sales growth," commented Jeffrey R. Scheffer, president and chief executive
officer. "For the past twelve months our sales have increased almost $40
million, or 16%, compared to the prior twelve months.
While industry sales trends have improved this year, we believe market
share gains are driving most of our sales growth. The strong third quarter
performance has caused us to again raise our sales and earnings guidance for
2004 as outlined below," Scheffer concluded.
Management offers the following guidance:
* Net sales are expected to be in the range of $77.5 million to
$80.0 million for the fourth quarter of 2004, an increase of 7% to 10%
over the prior year quarter. For total year 2004, net sales are
expected to be in the range of $295.6 million to $298.1 million,
representing an increase of 13% to 14% over 2003.
* Operating income is expected to be in the range of $8.6 million to
$9.2 million for the fourth quarter of 2004, or $33.9 million to
$34.5 million for total year 2004.
* Earnings per share are expected to be in the range of $.78 to $.83 for
the fourth quarter of 2004 compared to $.70 in the year ago quarter.
For total year 2004, earnings per share are expected to be in the range
of $3.10 to $3.15 compared to $2.34 for 2003.
* The Company's effective tax rate is expected to be 36.1% for 2004
compared to 36.0% in 2003.
Management is currently in the process of planning and budgeting for 2005
and will provide guidance for 2005 at a later time.
Earnings per share are on a diluted basis.
Celebrating its 80th Anniversary in 2004, 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 Tuesday morning, October 12, at
10:00 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 October 19, 2004. 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 pursuing 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, changes
in the preliminary duties imposed on wooden bedroom furniture imported from
China, 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.
TABLES FOLLOW
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
Sept 25, Sept 27, Sept 25, Sept 27,
2004 2003 2004 2003
Net sales $77,176 $65,227 $218,119 $187,934
Cost of sales 57,762 49,586 163,238 143,106
Gross profit 19,414 15,641 54,881 44,828
Selling, general and
administrative
expenses 10,636 9,170 29,592 26,083
Operating income 8,778 6,471 25,289 18,745
Other income, net (50) (61) (145) (150)
Interest expense 584 698 1,787 2,069
Income before income
taxes 8,244 5,834 23,647 16,826
Income taxes 2,959 2,118 8,544 6,108
Net income $5,285 $3,716 $15,103 $10,718
Diluted earnings per
share $0.81 $0.59 $2.32 $1.65
Weighted average number
of shares 6,550 6,318 6,509 6,502
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Sept 25, Sept 27, Dec 31,
2004 2003 2003
Assets
Current assets:
Cash $2,171 $1,406 $2,509
Accounts receivable, net 40,178 33,714 30,120
Inventories 72,365 54,395 54,638
Prepaid expenses and other
current assets 2,109 774 2,855
Deferred income taxes 2,930 3,379 2,855
Total current assets 119,753 93,668 92,977
Property, plant, and equipment, net 51,394 55,945 55,154
Goodwill 9,072 9,072 9,072
Other assets 6,425 7,565 7,000
Total assets $186,644 $166,250 $164,203
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term
debt $4,257 $7,014 $7,014
Accounts payable 17,552 15,214 10,595
Accrued expenses 16,870 14,452 10,913
Total current liabilities 38,679 36,680 28,522
Long-term debt 12,857 17,818 15,686
Deferred income taxes 10,813 12,592 12,560
Other long-term liabilities 5,890 4,483 4,877
Stockholders' equity 118,405 94,677 102,558
Total liabilities and
stockholders' equity $186,644 $166,250 $164,203
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
Sept 25, Sept 27,
2004 2003
Cash flows from operating activities:
Cash received from customers $208,506 $181,942
Cash paid to suppliers and employees (194,259) (159,628)
Interest paid, net (1,791) (2,078)
Income taxes paid (7,748) (7,786)
Net cash provided by operating
activities 4,708 12,450
Cash flows from investing activities:
Capital expenditures (402) (630)
Other, net (119) (19)
Net cash used by investing activities (521) (649)
Cash flows from financing activities:
Proceeds from revolving credit facility,
net 704
Repayment of senior notes (5,586) (5,486)
Purchase and retirement of common stock - (14,787)
Dividends paid (1,876) (952)
Proceeds from insurance policy loans 993 888
Proceeds from exercise of stock options 1,944 11
Net cash used by financing activities (4,525) (19,622)
Net decrease in cash (338) (7,821)
Cash at beginning of period 2,509 9,227
Cash at end of period $2,171 $1,406
Reconciliation of net income to
net cash provided by operating
activities:
Net income $15,103 $10,718
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 4,230 4,345
Deferred income taxes (1,822) (995)
Loss on sale of assets - 4
Changes in working capital (13,611) (1,367)
Other assets (205) (184)
Other long-term liabilities 1,013 (71)
Net cash provided by operating activities $4,708 $12,450
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, e-mail:
dpayne@stanleyfurniture.com, or Anita W. Wimmer, Treasurer,
+1-276-627-2446, e-mail: awimmer@stanleyfurniture.com, both of
Stanley Furniture Company, Inc.
|
