High Point, NC - Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY) today reported sales and operating results for the third quarter of 2013.
Third quarter 2013 highlights:
• Net sales were $24.0 million, essentially flat to the third quarter of 2012.
• Gross margin declined to 11.6% of net sales compared to 14.0% in the third quarter of 2012.
• Selling, general and administrative expenses were $4.7 million (19.6% of net sales) compared to $4.6 million (19.3%) in the third quarter of 2012.
• Operating loss was $1.9 million compared to a loss of $1.3 million in third quarter of 2012.
• As of September 28, 2013, the company’s financial position reflected $22.7 million in cash, restricted cash and short-term investments.
Year to date 2013 highlights:
• Net sales were $74.2 million compared to $75.2 million for the nine months of 2012.
• Gross margin declined to 11.3% of net sales compared to 13.3% for the nine months of 2012.
• Selling, general and administrative expenses were $14.7 million (19.8% of net sales) compared to $13.7 million (18.2% of net sales) in 2012 period.
• Operating loss was $6.3 million compared to a loss of $3.7 million in 2012.
• Capital expenditures, leasehold improvements and investment in new operating systems totaled $5.1 million during the first nine months of 2013.
“Our business showed important signs of improvement during the third quarter,” said Glenn Prillaman, President and Chief Executive Officer. “After three consecutive years of strategic change necessary to position both our Stanley and Young America brands for growth, sales have stabilized, both year-overyear and sequentially, and our cash used during the quarter declined compared to prior quarters, as guidance suggested. Our balance sheet remains strong and our plan to become profitable does not hinge upon further capital spending.”
The company’s overseas operations to support its Stanley brand continue to perform well as gross margins rebounded from the second quarter of 2013. The company expects margins to continue improving as pricing action taken to offset inflation are fully realized and the impact of floor sample discounts are now in the past.
Domestic operations supporting the Young America brand continued to improve even as the company’s Robbinsville factory operates on low unit volumes. The factory is operating on-schedule and orders delayed by the launch of its new operating system have been fulfilled.
“In the most recent quarter, our customers, as well as our associates and sales team, noticed the improvements in our sourcing, manufacturing and information systems efforts, all of which we believe position the company and its brands for growth opportunities. The ongoing refinement of our new operating systems continued throughout the quarter, and we believe these improvements are making it increasingly easier for our customers to do business with us. Our team remains focused on top-line growth and is ready for this week’s Fall Furniture Market in High Point where we believe the industry’s retailers and interior designers will again be excited to see our new product and programs," continued Prillaman. “We expect growth in the near term, which should address margin issues and move the company past the negative comps associated with the structural changes of prior years.”
The company’s office and showroom consolidation, the implementation of its new operating systems and capital spending in the Robbinsville plant consumed $5.1 million during the first nine months of 2013, with a majority of the spending occurring during the first half of the year. Working capital less cash on hand, restricted cash and short-term investments increased $2.3 million since December 31, 2012 to $36.9 million. The increase in working capital was driven by an increase in Accounts Receivable and a decrease in Accounts Payable, partially offset by a reduction in inventory. Cash, restricted cash and short-term investments at quarter-end were $22.7 million, down $1.9 million from the end of June 2013.
“We are optimistic about our ability to grow both sequentially and year-over-year in the coming quarter with each of our two brands now positioned for differentiation in the marketplace. While it is difficult to accurately predict incoming order rates in the current environment, we continue to receive encouraging feedback from customers as they see new product and experience much improved delivery of orders and information surrounding the sale of existing products. Business in our segment remains difficult, and there is a fair amount of uncertainty in the retail sector. Regardless, we believe superior product design and solid operational performance positions the company and its brands for success when and where the consumer decides to shop for better goods,” concluded Prillaman.
About the Company
Established in 1924, Stanley Furniture Company, Inc. is a leading designer and manufacturer of wood furniture targeted at the premium segment of the residential market. The company offers two major product lines. Its Stanley Furniture brand represents its fashion-oriented adult furniture and competes through an overseas sourcing model in the upscale market through superior finish, styling and piece assortment. Its Young America brand is positioned as the leader in the infant and youth segment and differentiates through a domestic manufacturing model catering to parent preferences such as child safety, color, choice and quick delivery of customized special orders. The company’s common stock is traded on the NASDAQ stock market under the symbol STLY.
Have something to say? Share your thoughts with us in the comments below.