Stanley Furniture Company, Inc. (Nasdaq-NGS: STLY) today reported sales and operating results for the third quarter of 2011.
The Company continued its trend of improved operating performance during the third quarter of 2011. Net loss for the third quarter improved to $1.7 million from $2.0 million in the second quarter of 2011 (adjusted for CDSOA income and restructuring credit) on $26.1 million in net sales. “We are clearly operating in a difficult retail environment,” said Glenn Prillaman, President and Chief Executive Officer, “but our efforts to continue improving operations independent of sales are encouraging. We enter the fourth quarter with our strongest product offering and in the best service position since our restructuring plan began at the end of 2010. This should result in continued backlog reduction during the remainder of 2011, bolstering confidence with our customers. Historically, when we have combined the best product with superior quality and service, we have gained market share and generated positive cash flow. Predicting future growth, however, in this economy is very difficult.”
Gross margin increased to $3.8 million (14.7% of net sales) in the third quarter from $3.4 million (12.3% of net sales) in the second quarter excluding restructuring credit. “We made significant progress on our path to become a profitable and efficient domestic manufacturer during the quarter,” said Micah Goldstein, Chief Operating and Financial Officer. “The gross margin improvement in the third quarter came primarily from improvements related to the modernization efforts underway in our factory in Robbinsville, NC.”
Cash at quarter-end was $19.5 million including restricted cash. Working capital, excluding cash and restricted cash, increased to $24.3 million from $22.6 million at the end of the second quarter, mostly driven by a $2.8 million increase in finished goods inventory. Capital expenditures during the third quarter were $1.7 million as we began to invest in our Robbinsville manufacturing facility. “We believe the consistent narrowing of our operating losses along with the short investment payback on the projects we are undertaking protects our balance sheet as we strategically invest in our business.” Goldstein commented.