STANLEYTOWN, Va., Oct. 15 /PRNewswire/ -- Stanley Furniture Company, Inc.
(Nasdaq: STLY) today reported sales and earnings for the third quarter of
2001. Net sales of $60.0 million declined 16% compared to a record third
quarter last year. Net income of $3.2 million or $.47 per share was within
the anticipated range previously announced by the company and compares to
record earnings of $5.1 million or $.68 per share in 2000.
For the first nine months of 2001, net sales of $178.0 million decreased
17% from $214.5 million in the comparable 2000 period. Net income, excluding
an unusual charge, was $9.9 million or $1.44 per share for the nine months of
2001 compared to record earnings of $15.2 million or $2.02 per share in the
comparable 2000 period. An unusual charge of $1.8 million ($2.8 million pre-
tax) or $.26 per share was recorded in the second quarter to write-off the
receivable due from the company's former largest customer which declared
bankruptcy and a complete liquidation of its assets.
In response to continued weakness in order trends in the third quarter,
the company continued to reduce production primarily through selective
downtime at its facilities. As a result, total inventories decreased $3.6
million from second quarter 2001 levels and approximated year end levels.
Operating income as a percent of net sales for the third quarter was 9.9% and
10.4% (excluding the unusual charge) for the nine month period of 2001,
compared to 12.7% in each of the comparable prior year periods. The decrease
resulted from lower sales and production levels partially offset by efficiency
improvements at the home office factory, which began production in March 2000,
and lower selling, general and administrative expenses during the 2001 period.
Debt to total capitalization (debt plus equity) was reduced from 39.6% at
December 31, 2000, to 35.2% at the end of the third quarter, well within the
company's target range. Cash generated during the first nine months of 2001
was used to reduce debt by $5.3 million and $2.0 million was used to purchase
86,000 shares of the company's common stock at an average price of $22.94.
Approximately $8.0 million remains authorized by the company's Board of
Directors to repurchase the company's shares.
"Considering the sales decline resulting from an industry-wide downturn
this year, we are extremely pleased with our operating margins and our ability
to closely manage our cost and inventory levels," commented Albert L.
Prillaman, chairman and chief executive officer. "We believe we are well
positioned to realize considerable operating leverage when business conditions
improve."
"We believe the trough in our shipments occurred in the second quarter of
this year. While the tragic events of September 11 have produced an erratic
sales pattern and make near-term visibility difficult, we have experienced an
overall improving trend that should continue into the fourth quarter.
Accordingly, we expect a sales decline in the fourth quarter of 2001 in the
mid to upper single digits on a percentage basis compared to last year, and
earnings per share of $.59 to $.64 for the fourth quarter or $2.03 to $2.08,
excluding the unusual charge, for total year 2001," continued Mr. Prillaman.
"Although the recent political and economic events which continue to
unfold worldwide create uncertainty, we expect the fiscal and monetary stimuli
provided by the government, combined with strong housing activity aided by low
residential mortgage rates, will likely lead to a recovery in the home
furnishings market. Therefore, we are projecting a sales increase of 5% to 8%
and earnings per share of $2.30 to $2.60 for 2002," concluded Mr. Prillaman.
All earnings per share amounts are on a fully diluted basis.
The company will host a conference call Tuesday morning, October 16, at
10:00 a.m. Eastern Standard Time. The dial-in-number is 913-981-5538. A
replay will be available through October 23, 2001. The dial-in-number for the
replay is 719-457-0820 with an access code of 679410.
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, Lexington, and West End, NC. Its common
stock is traded on the Nasdaq stock market under the symbol STLY.
For more information, visit the web site at
http://www.stanleyfurniture.com .
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," "expects," "estimates,"
"may," "will," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology. 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 the cyclical nature of the furniture industry, fluctuations in the
price of lumber which is the most significant raw material used by the
Company, credit exposure to customers in the current economic climate,
competition in the furniture industry, capital costs and general economic
condition. 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.
Operating Results
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
2001 2000 2001 2000
Net sales $60,007 $71,440 $177,972 $214,531
Cost of sales 46,195 53,948 136,635 161,881
Gross profit 13,812 17,492 41,337 52,650
Selling, general
and administrative
expenses 7,856 8,429 22,791 25,417
Unusual charge (1) 2,800
Operating income 5,956 9,063 15,746 27,233
Other expense (income),
net 6 (38) 24 (55)
Interest expense 1,010 999 3,095 2,925
Income before
income taxes 4,940 8,102 12,627 24,363
Income taxes 1,704 3,037 4,490 9,137
Net income $3,236 $5,065 $8,137 $15,226
Earnings per share:
Basic $0.49 $0.71 $1.23 $2.12
Diluted $0.47 $0.68 $1.18 $2.02
Weighted average number
of shares:
Basic 6,615 7,130 6,611 7,178
Diluted 6,884 7,434 6,914 7,549
(1)To record an unusual charge of $2.8 million pre-tax ($1.8 million net
of taxes or $.26 per diluted share) to write-off amounts due from a major
customer.
STANLEY FURNITURE COMPANY, INC.
Condensed Balance Sheets
(In thousands)
(unaudited)
Sept. 29, Sept. 30, Dec. 31,
2001 2000 2000
Assets
Current assets:
Cash $1,948 $2,265 $1,825
Accounts receivable, net 31,174 38,213 33,224
Inventories 55,250 53,006 54,423
Prepaid expenses and
other current assets 1,285 1,638 568
Deferred income taxes 2,514 2,463 2,514
Total current assets 92,171 97,585 92,554
Property, plant, and
equipment, net 69,919 71,357 70,455
Goodwill 9,156 9,492 9,408
Other assets 6,377 5,341 6,789
Total assets $177,623 $183,775 $179,206
Liabilities and
Stockholders' Equity
Current liabilities:
Current maturities
of long-term debt $6,839 $5,286 $6,714
Accounts payable 16,586 22,580 19,507
Accrued expenses 12,494 15,524 12,574
Total current liabilities 35,919 43,390 38,795
Long-term debt 40,043 44,882 45,455
Deferred income taxes 10,651 11,072 10,860
Other long-term liabilities 4,584 2,456 4,619
Stockholders' equity 86,426 81,975 79,477
Total liabilities and
stockholders' equity $177,623 $183,775 $179,206
SOURCE Stanley Furniture Company, Inc.
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Related links:
http://www.stanleyfurniture.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/117677.html
CONTACT:
Douglas I. Payne, Exec. 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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