Stanley Furniture Company, Inc. (Nasdaq-NGS:
) today reported sales and operating results for the second quarter of 2010.
Net sales of $37.9 million declined 10.5% from the second quarter of 2009 and increased 3.8% from the first quarter of 2010. Net loss for the quarter was $11.5 million, or $1.11 per share, compared to a net loss of $3.0 million, or $.29 per share, in the second quarter of 2009. The 2010 second quarter loss includes accelerated depreciation of $2.1 million and $1.2 million of charges related to the Company’s restructuring plan announced in May 2010.
Operating loss amounted to $11.4 million, compared to operating loss of $4.1 million in the second quarter of 2009. The higher operating loss is primarily due to accelerated depreciation and charges related to the restructuring plan, manufacturing inefficiencies and the increased cost of transitioning approximately one-third of the Young America product line revenues from overseas into domestic operations, and lower overall sales across the Company’s various product lines. These factors were partially mitigated by lower expenses from previous restructuring and on-going cost reduction efforts.
Cash on hand amounted to $18.9 million and total debt was $15.0 million at July 3, 2010. As previously announced, during the second quarter the Company repaid $12.9 million of debt, received tax refunds of $6.6 million, and received net proceeds of $1.0 million from sale of assets. Working capital, excluding cash and current maturities of long-term debt, decreased $14.1 million (27.5%) from the second quarter of 2009 primarily due to lower inventories and accounts receivable in response to lower sales.
“As expected, our second quarter operating results excluding special items were similar to the first quarter,” said Glenn Prillaman, President and Chief Executive Officer. “Business conditions in the second quarter remained sluggish with a downturn in sales for June showing that today’s consumer continues to take a cautious approach toward the purchase of wood furniture in our price segment.”