Stanley Furniture Company, Inc. (Nasdaq-NGS:
) today reported sales and operating results for the third quarter of 2010.
Net sales of $34.9 million declined 9.3% from the third quarter of 2009. Net loss for the quarter was $4.9 million, or $.48 per share, compared to a net loss of $5.1 million, or $.49 per share, in the third quarter of 2009.
Operating loss for the third quarter of 2010 amounted to $6.4 million, compared to operating loss of $7.5 million in the third quarter of 2009. The 2010 third quarter loss includes accelerated depreciation and charges related to the Company’s restructuring plan announced in May 2010 totaling $2.3 million. The 2009 third quarter loss included restructuring expenses of $1.1 million.
Cash on hand was $16.9 million and total debt was $15.0 million on October 2, 2010. Working capital, excluding cash and current maturities of long-term debt, decreased $5.8 million (13%) from the third quarter of 2009 primarily due to lower inventories and accounts receivable in response to lower sales.
“In May of this year, we set our path towards profitability by announcing a comprehensive restructuring plan,” said Glenn Prillaman, President and Chief Executive Officer. “We are pleased with the progress we have made to date, as evidenced by a smaller operating loss and less use of cash in the third quarter compared to the first and second quarters of this year.”
“We continue to transition our two major product lines in opposite operational directions to better align them with the factors that drive demand for each product line,” said Prillaman. “As previously reported, the majority of our Young America product line transition has been completed and all of those products are now domestically made. The increased prices on this product line and improved operating efficiencies at our Robbinsville, NC plant drove the improvement in our operating results for the third quarter. In addition, we continue to move as planned through our transition related to the movement of our Stanley Furniture adult product line from a partially domestic to a completely globally sourced model. We are on schedule to cease manufacturing at our Stanleytown, VA factory in December 2010. We anticipate operating inefficiencies stemming from the wind-down of this plant and the disruption created by this move may reduce sales and increase our operating loss in the fourth quarter compared to the third quarter of 2010. However, our partner factories overseas are already making a significant portion of this product line, and we anticipate a smooth operational transition as we shift our remaining domestic production to these suppliers,” he added.