STANLEYTOWN, VA -- Stanley Furniture Company, Inc.  reported sales and operating results for 2011. The Company continued its trend of improved operating performance during the fourth quarter of 2011. Net loss for the fourth quarter was $1.7 million excluding $2.9 million in CDSOA income and a small restructuring credit. Both operating and net losses, excluding CDSOA income, were comparable to the third quarter despite a 5.5% sequential sales decline to $24.6 million.

Net loss for the year improved to $8.6 million from $26.6 million in 2010, after making adjustments for CDSOA income and restructuring charges. Net sales for the year decreased by 23.6% to $104.6 million. “Last year was transformational for our company as we and our customers dealt with the challenges associated with product line and operational restructuring. We are very pleased with our improvements over the previous year as our financial results reflect the impact of our strategic decisions to align operations with customer demand for differentiated product. Sales results reflect both the lack of dependable service to our customers caused by each product line transitioning into new operating models, as well as the sluggish retail environment for case goods furniture in the premium segment," said Glenn Prillaman, President and Chief Executive Officer.

Cash on hand at Dec. 31, 2011 was $17.3 million, including $1.6 million in restricted cash. Working capital, excluding cash and restricted cash, increased from $27.2 million on December 31, 2010 to $28.8 million at year-end due mostly to a build in finished goods inventory to support the Stanley Furniture product line which is now completely sourced overseas. "Protecting the strength of our balance sheet remains a top priority as we invest in our business to improve in three main areas: modernizing our Young America manufacturing facility in North Carolina; servicing customers and supporting the growth of the Stanley Furniture product line with sufficient investment in finished goods inventory; and initiating customer care efforts to communicate timely and accurate information," added Prillaman.

The Company detailed further the capital investments associated with its initiatives to modernize its domestic manufacturing facility and to better care for its customers. “We are committed to completing our efforts to reinvent a manufacturing process in Robbinsville, NC to compete globally and occupy a meaningful space in the children’s furniture marketplace. Our capital investments last year and those we will make in 2012 show this commitment. In 2011, we invested $4.2 million in new machinery and equipment and in 2012 we are planning an additional investment of approximately $4 million to sufficiently automate this plant,” said Micah Goldstein, chief operating and financial officer. “In addition, our customers currently require better information supporting the sale and delivery of our products. We are excited about our plan to invest approximately $3 million over the next two years in new systems that will make doing business with our company more desirable as we enter 2013,” said Goldstein.

"Our Stanley Furniture product line is now profitable, operating on an exclusively overseas manufacturing platform. The Stanley Furniture product line now represents a strong value alternative to the luxury segment of the wood residential home furnishings market and we are beginning to see an increase in order activity," said Prillaman. "However, we have not completed the transition of our Young America product line and have not yet become a profitable domestic manufacturer. We believe we are roughly half of the way through this journey and, when completed, we will have an Internet-age brand ready for the younger consumer supported by a product offering difficult to duplicate from Asia. As a domestic operation, we are in control of our effort to create a flexible manufacturing footprint that enables a more favorable cost structure, shorter lead times and higher inventory turns. Significant improvements in our Robbinsville facility have been made to date and will continue throughout the coming year," concluded Prillaman.

 

 

 

 

 

Consolidated O

 

STANLEY FURNITURE COMPANY, INC.

Consolidated Operating Results

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Dec. 31,

 

Oct. 1,

 

Jul. 2,

 

Apr. 2,

 

 

2011

 

2011

 

2011

 

2011

 

 

 

 

 

 

 

 

 

Net sales

 

$

24,631

 

 

$

26,051

 

 

$

27,393

 

 

$

26,571

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

21,302

 

 

 

22,227

 

 

 

23,760

 

 

 

24,886

 

 

 

 

 

 

 

 

 

 

Gross profit (loss)

 

 

3,329

 

 

 

3,824

 

 

 

3,633

 

 

 

1,685

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

4,429

 

 

 

4,952

 

 

 

4,748

 

 

 

5,121

 

Operating loss

 

 

(1,100

)

 

 

(1,128

)

 

 

(1,115

)

 

 

(3,436

)

 

 

 

 

 

 

 

 

 

Income from Continued Dumping and Subsidy Offset Act

 

 

2,856

 

 

 

 

 

1,117

 

 

 

Other income, net

 

 

37

 

 

 

25

 

 

 

21

 

 

 

29

 

Interest income

 

 

13

 

 

 

9

 

 

 

3

 

 

 

Interest expense

 

 

608

 

 

 

623

 

 

 

586

 

 

 

538

 

Income (loss) before income taxes

 

 

1,198

 

 

 

(1,717

)

 

 

(560

)

 

 

(3,945

)

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

 

8

 

 

 

(26

)

 

 

35

 

 

 

(16

)

Net income (loss)

 

$

1,190

 

 

$

(1,691

)

 

$

(595

)

 

$

(3,929

)

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share

 

$

.08

 

 

$

(.12

)

 

$

(.04

)

 

$

(.27

)

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

14,345

 

 

 

14,345

 

 

 

14,345

 

 

 

14,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STANLEY FURNITURE COMPANY, INC.

Supplemental Information

Reconciliation of GAAP to Non-GAAP Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Dec. 31,

 

Oct. 1,

 

Jul. 2,

 

Apr. 2,

 

 

2011

 

2011

 

2011

 

2011

 

 

 

 

 

 

 

 

 

Reconciliation of operating loss as reported to operating loss adjusted:

 

 

 

 

 

 

 

 

Operating loss as reported

 

$

(1,100

)

 

$

(1,128

)

 

$

(1,115

)

 

$

(3,436

)

Plus restructuring charge (credit)

 

 

(75

)

 

 

 

 

(277

)

 

 

768

 

Operating loss as adjusted

 

$

(1,175

)

 

$

(1,128

)

 

$

(1,392

)

 

$

(2,668

)

 

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) as reported to net income (loss) adjusted:

 

 

 

 

 

 

 

 

Net income (loss) as reported

 

$

1,190

 

 

$

(1,691

)

 

$

(595

)

 

$

(3,929

)

Less income from CDSOA

 

 

(2,856

)

 

 

 

 

(1,117

)

 

 

Plus restructuring charge (credit)

 

 

(75

)

 

 

 

 

(277

)

 

 

768

 

Net income (loss) as adjusted

 

$

(1,741

)

 

$

(1,691

)

 

$

(1,989

)

 

$

(3,161

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STANLEY FURNITURE COMPANY, INC.

Consolidated Operating Results

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2011

 

2010

 

 

 

 

 

Net sales

 

$

104,646

 

 

$

137,012

 

 

 

 

 

 

Cost of sales

 

 

92,175

 

 

 

153,115

 

 

 

 

 

 

Gross profit (loss)

 

 

12,471

 

 

 

(16,103

)

 

 

 

 

 

Selling, general and administrative expenses

 

 

19,250

 

 

 

20,625

 

Goodwill impairment charge

 

 

 

 

9,072

 

Operating loss

 

 

(6,779

)

 

 

(45,800

)

 

 

 

 

 

Income from Continued Dumping and Subsidy Offset Act

 

 

3,973

 

 

 

1,556

 

Other income, net

 

 

112

 

 

 

25

 

Interest income

 

 

25

 

 

 

3

 

Interest expense

 

 

2,355

 

 

 

3,537

 

Loss before income taxes

 

 

(5,024

)

 

 

(47,753

)

 

 

 

 

 

Income tax (benefit) expense

 

 

1

 

 

 

(3,963

)

Net loss

 

$

(5,025

)

 

$

(43,790

)

 

 

 

 

 

Diluted loss per share

 

$

(.35

)

 

$

(4.11

)

 

 

 

 

 

Weighted average number of shares

 

 

14,345

 

 

 

10,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STANLEY FURNITURE COMPANY, INC.

Supplemental Information

Reconciliation of GAAP to Non-GAAP Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2011

 

2010

Reconciliation of operating loss as reported to operating loss adjusted:

 

 

 

 

Operating loss as reported

 

$

(6,779

)

 

$

(45,800

)

Plus goodwill impairment charge

 

 

 

 

9,072

 

Plus accelerated depreciation

 

 

 

 

6,177

 

Plus restructuring charge

 

 

416

 

 

 

4,272

 

Operating loss as adjusted

 

$

(6,363

)

 

$

(26,279

)

 

 

 

 

 

Reconciliation of net loss as reported to net loss adjusted:

 

 

 

 

Net loss as reported

 

$

(5,025

)

 

$

(43,790

)

Plus goodwill impairment charge

 

 

 

 

9,072

 

Less income from CDSOA

 

 

(3,973

)

 

 

(1,427

)

Plus accelerated depreciation

 

 

 

 

5,664

 

Plus restructuring charge

 

 

416

 

 

 

3,918

 

Net loss as adjusted

 

$

(8,582

)

 

$

(26,563

)

 

 

 

 

 

 

 

 

 

 

STANLEY FURNITURE COMPANY, INC.

Consolidated Condensed Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2011

 

2010

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

15,700

 

$

25,532

Restricted cash

 

 

1,587

 

 

Accounts receivable, net

 

 

10,252

 

 

9,888

Inventories

 

 

31,084

 

 

25,695

Prepaid expenses and other current assets

 

 

3,380

 

 

5,883

Income tax receivable

 

 

 

 

3,952

Deferred income taxes

 

 

519

 

 

1,021

 

 

 

 

 

Total current assets

 

 

62,522

 

 

71,971

 

 

 

 

 

Property, plant and equipment, net

 

 

17,590

 

 

15,980

Other assets

 

 

496

 

 

445

 

 

 

 

 

Total assets

 

$

80,608

 

$

88,396

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

9,963

 

$

9,116

Accrued expenses

 

 

6,493

 

 

10,086

 

 

 

 

 

Total current liabilities

 

 

16,456

 

 

19,202

 

 

 

 

 

Deferred income taxes

 

 

519

 

 

1,021

Other long-term liabilities

 

 

6,593

 

 

6,378

 

 

 

 

 

Stockholders' equity

 

 

57,040

 

 

61,795

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

80,608

 

$

88,396

 

 

 

 

 

 

 

 

 

 

 

STANLEY FURNITURE COMPANY, INC.

Consolidated Condensed Statements of Cash Flows

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2011

 

2010

Cash flows from operating activities:

 

 

 

 

Cash received from customers

 

$

103,295

 

 

$

142,481

 

Cash paid to suppliers and employees

 

 

(116,763

)

 

 

(158,560

)

Cash from Continued Dumping and Subsidy

 

 

 

 

Offset Act

 

 

4,615

 

 

 

2,232

 

Interest paid

 

 

(2,094

)

 

 

(3,750

)

Income taxes received, net

 

 

3,640

 

 

 

8,195

 

Net cash used by operating activities

 

 

(7,307

)

 

 

(9,402

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Restricted cash increase

 

 

(1,587

)

 

 

Capital expenditures

 

 

(4,352

)

 

 

(857

)

Purchase of other assets

 

 

(38

)

 

 

(28

)

Proceeds from sale of assets

 

 

1,570

 

 

 

5,731

 

Net cash provided (used) by investing activities

 

 

(4,407

)

 

 

4,846

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Repayment of senior notes

 

 

 

 

(27,857

)

Proceeds from lease related obligation

 

 

 

 

2,360

 

Proceeds from rights offering

 

 

 

 

11,797

 

Proceeds from exercise of stock options

 

 

 

 

116

 

Proceeds from insurance policy loans

 

 

2,003

 

 

 

1,845

 

Capital lease payments

 

 

(121

)

 

 

Net cash provided (used) by financing activities

 

 

1,882

 

 

 

(11,739

)

 

 

 

 

 

Net decrease in cash

 

 

(9,832

)

 

 

(16,295

)

Cash at beginning of period

 

 

25,532

 

 

 

41,827

 

 

 

 

 

 

Cash at end of period

 

$

15,700

 

 

$

25,532

 

 

 

 

 

 

Reconciliation of net loss to net cash used by operating activities:

 

 

 

 

Net loss

 

$

(5,025

)

 

$

(43,790

)

 

 

 

 

 

Goodwill impairment

 

 

 

 

9,072

 

Depreciation and amortization

 

 

1,643

 

 

 

9,405

 

Deferred income taxes

 

 

 

 

1,305

 

Stock-based compensation

 

 

505

 

 

 

703

 

Changes in working capital

 

 

(4,524

)

 

 

13,555

 

Other assets

 

 

130

 

 

 

87

 

Other long-term liabilities

 

 

(504

)

 

 

(396

)

Other

 

 

468

 

 

 

657

 

Net cash used by operating activities

 

$

(7,307

)

 

$

(9,402

)

 

 

 

 

 

Source: Stanley Furniture Co., Inc. 

 

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