Stanley Furniture Company, Inc. (Nasdaq-NGS: STLY) today reported sales and operating results for the first quarter of 2011.
Net sales for the quarter decreased 4% to $26.6 million compared to $27.7 million in the fourth quarter of 2010. Order backlog grew $2.2 million as the company completed the first full quarter with its new operational strategy announced in May of last year. “Sales were consistent with our expectations for the first quarter,” said Glenn Prillaman, Chief Executive Officer. “Over the coming quarter we expect our backlog to narrow as the flow of goods from our Stanley product line improves from our overseas partners and as our Young America manufacturing facility in North Carolina continues to improve service to its customers,” Mr. Prillaman continued. Net loss for the quarter improved to $3.9 million, or $.27 per share compared to a net loss of $8.3 million, or $.73 per share, in the fourth quarter of 2010.
Operating loss narrowed substantially to $3.4 million compared to the $10.4 million operating loss in the fourth quarter of 2010. The Company generated positive gross margins of $1.7 million or 6.3% in the first quarter, ending four consecutive quarters of negative gross margins. “While we are still in the early stages of our new operating model, both customer reaction and financial performance indicate that we are making significant progress,” said Prillaman. We completed our restructuring plan in the first quarter and recorded $768,000 in related expenses, most of which consumed cash. Operating loss for the fourth quarter of 2010 included $2.5 million of restructuring expenses and $2.4 million of accelerated depreciation.
Cash on hand at quarter-end was $22.3 million down from $25.5 million at December 31, 2010. Working capital, excluding cash, decreased slightly to $26.5 million from $27.2 million at year-end 2010. “The combination of our efforts to raise capital late in 2010 and our improved performance in the first quarter has protected the strength of our balance sheet,” said Prillaman. Inventories declined from $25.7 million at year-end to $22.8 million at the end of the first quarter. Subsequent to quarter-end, the company received a $3.1 million tax refund.“Our path towards profitability continues,” said Prillaman. “Our focus remains on reaching profitability at the operating level at some point in the second half of this year. Our people believe in our plan, and we have demonstrated that we have the necessary resources. While we know we have substantial hurdles ahead, we are pleased with our results and our progress on several fronts.”