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Stanley Furniture Announces 2011 Operating Results

Stocks in this article: STLY

All earnings per share amounts are on a fully diluted basis.

Established in 1924, Stanley Furniture Company, Inc. is a leading designer, manufacturer and importer of wood furniture targeting the premium segment of the residential market. Its common stock is traded on the NASDAQ stock market under the symbol STLY.

Conference Call Details

The Company will host a conference call Wednesday morning, February 1, 2012 at 9:00 a.m. Eastern Time. The dial-in-number is (877) 407-8029. The call will also be web cast and archived on the Company’s web site at www.stanleyfurniture.com. The dial-in-number for the replay (available through March 1, 2012) is (877) 660-6853, the account reference number is 275 and the conference number is 386780.

Forward-Looking Statements

Certain statements made in this news release are not based on historical facts, but are forward-looking statements. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These statements reflect our reasonable judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include our success in profitably producing Young America products in our domestic manufacturing facility, disruptions in foreign sourcing including those arising from supply or distribution disruptions or those arising from changes in political, economic and social conditions, as well as laws and regulations, in countries from which we source products, international trade policies of the United States and countries from which we source products, lower sales due to worsening of current economic conditions, the cyclical nature of the furniture industry, business failures or loss of large customers, the inability to raise prices in response to inflation and increasing costs, failure to anticipate or respond to changes in consumer tastes and fashions in a timely manner, competition in the furniture industry including competition from lower-cost foreign manufacturers, the inability to obtain sufficient quantities of quality raw materials in a timely manner, environmental, health, and safety compliance costs, failure or interruption of our information technology infrastructure, limited use of operating loss carry forwards due to ownership change and extended business interruption at our manufacturing facility. Any forward looking statement speaks only as of the date of this news release and we undertake no obligation to update or revise any forward looking statements, whether as a result of new developments or otherwise.

       
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results

(in thousands, except per share data)

 
 
Three Months Ended
Dec. 31, Oct. 1, Jul. 2, Apr. 2,
2011 2011 2011 2011
 
Net sales $ 24,631 $ 26,051 $ 27,393 $ 26,571
 
Cost of sales   21,302     22,227     23,760     24,886  
 
Gross profit (loss) 3,329 3,824 3,633 1,685
 
Selling, general and administrative expenses   4,429     4,952     4,748     5,121  
Operating loss (1,100 ) (1,128 ) (1,115 ) (3,436 )
 

Income from Continued Dumping and Subsidy Offset Act

2,856 1,117

 

Other income, net 37 25 21 29
Interest income 13 9 3
Interest expense   608     623     586     538  
Income (loss) before income taxes 1,198 (1,717 ) (560 ) (3,945 )
 
Income tax (benefit) expense   8     (26 )   35     (16 )
Net income (loss) $ 1,190   $ (1,691 ) $ (595 ) $ (3,929 )
 
Diluted income (loss) per share $ .08   $ (.12 ) $ (.04 ) $ (.27 )
 
Weighted average number of shares   14,345     14,345     14,345     14,345  
 
       
STANLEY FURNITURE COMPANY, INC.

Supplemental Information

Reconciliation of GAAP to Non-GAAP Operating Results

 
 
Three Months Ended
Dec. 31, Oct. 1, Jul. 2, Apr. 2,

2011

2011 2011 2011
 

Reconciliation of operating loss as reported to operating loss adjusted:

Operating loss as reported $ (1,100 ) $ (1,128 ) $ (1,115 ) $ (3,436 )
Plus restructuring charge (credit)   (75 )     (277 )   768  
Operating loss as adjusted $ (1,175 ) $ (1,128 ) $ (1,392 ) $ (2,668 )
 

Reconciliation of net income (loss) as reported to net income (loss) adjusted:

Net income (loss) as reported $ 1,190 $ (1,691 ) $ (595 ) $ (3,929 )
Less income from CDSOA (2,856 ) (1,117 )
Plus restructuring charge (credit)   (75 )     (277 )   768  
Net income (loss) as adjusted $ (1,741 ) $ (1,691 ) $ (1,989 ) $ (3,161 )
 

Note:

We have included the above reconciliation of reported financial measures in accordance with GAAP to non-GAAP financial measures because we believe that this reconciliation provides useful information that allows investors to compare operating results to those of other periods by excluding income from CDSOA proceeds and restructuring related charges. These measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for or superior to GAAP results.

   
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
 
 
Twelve Months Ended

December 31,

December 31,

2011

2010
 
Net sales

$

104,646

$ 137,012
 
Cost of sales  

92,175

    153,115  
 
Gross profit (loss)

12,471

(16,103 )
 
Selling, general and administrative expenses

19,250

20,625
Goodwill impairment charge     9,072  
Operating loss

(6,779

)

(45,800 )
 

Income from Continued Dumping and Subsidy Offset Act

3,973

1,556

Other income, net

112

25
Interest income

25

3
Interest expense  

2,355

    3,537  
Loss before income taxes

(5,024

)

(47,753 )
 
Income tax (benefit) expense  

1

    (3,963 )
Net loss

$

(5,025

)

$ (43,790 )
 
Diluted loss per share

$

(.35

)

$ (4.11 )
 
Weighted average number of shares  

14,345

    10,650  
 
   
STANLEY FURNITURE COMPANY, INC.
Supplemental Information
Reconciliation of GAAP to Non-GAAP Operating Results
 
 
Twelve Months Ended
December 31, December 31,
2011 2010

Reconciliation of operating loss as reported to operating loss adjusted:

Operating loss as reported $ (6,779 ) $ (45,800 )
Plus goodwill impairment charge 9,072
Plus accelerated depreciation 6,177
Plus restructuring charge   416     4,272  
Operating loss as adjusted $ (6,363 ) $ (26,279 )
 

Reconciliation of net loss as reported to net loss adjusted:

Net loss as reported $ (5,025 ) $ (43,790 )
Plus goodwill impairment charge 9,072
Less income from CDSOA (3,973 ) (1,427 )
Plus accelerated depreciation 5,664
Plus restructuring charge   416     3,918  
Net loss as adjusted $ (8,582 ) $ (26,563 )
 

Note:

We have included the above reconciliation of reported financial measures in accordance with GAAP to non-GAAP financial measures because we believe that this reconciliation provides useful information that allows investors to compare operating results to those of other periods by excluding income from CDSOA proceeds, accelerated depreciation, restructuring related charges and goodwill impairment charge. These measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for or superior to GAAP results.

   

STANLEY FURNITURE COMPANY, INC.

Consolidated Condensed Balance Sheets
(in thousands)
 
 
December 31, December 31,
2011 2010
 
Assets
Current assets:
Cash $ 15,700 $ 25,532
Restricted cash 1,587
Accounts receivable, net 10,252 9,888
Inventories 31,084 25,695
Prepaid expenses and other current assets 3,380 5,883
Income tax receivable 3,952
Deferred income taxes   519   1,021
 
Total current assets 62,522 71,971
 
Property, plant and equipment, net 17,590 15,980
Other assets   496   445
 
Total assets $ 80,608 $ 88,396
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,963 $ 9,116
Accrued expenses   6,493   10,086
 
Total current liabilities 16,456 19,202
 
Deferred income taxes 519 1,021
Other long-term liabilities 6,593 6,378
 
Stockholders' equity   57,040   61,795
 
Total liabilities and stockholders' equity $ 80,608 $ 88,396
 
   

STANLEY FURNITURE COMPANY, INC.

Consolidated Condensed Statements of Cash Flows
(in thousands)
 
 
Twelve Months Ended
December 31, December 31,
2011 2010
Cash flows from operating activities:
Cash received from customers $ 103,295 $ 142,481
Cash paid to suppliers and employees (116,763 ) (158,560 )
Cash from Continued Dumping and Subsidy
Offset Act 4,615 2,232
Interest paid (2,094 ) (3,750 )
Income taxes received, net   3,640     8,195  
Net cash used by operating activities   (7,307 )   (9,402 )
 
Cash flows from investing activities:
Restricted cash increase (1,587 )
Capital expenditures (4,352 ) (857 )
Purchase of other assets (38 ) (28 )
Proceeds from sale of assets   1,570     5,731  
Net cash provided (used) by investing activities   (4,407 )   4,846  
 
Cash flows from financing activities:
Repayment of senior notes (27,857 )
Proceeds from lease related obligation 2,360
Proceeds from rights offering 11,797
Proceeds from exercise of stock options 116
Proceeds from insurance policy loans 2,003 1,845
Capital lease payments   (121 )  
Net cash provided (used) by financing activities   1,882     (11,739 )
 
Net decrease in cash (9,832 ) (16,295 )
Cash at beginning of period   25,532     41,827  
 
Cash at end of period $ 15,700   $ 25,532  
 

Reconciliation of net loss to net cash used by operating activities:

Net loss $ (5,025 ) $ (43,790 )
 
Goodwill impairment 9,072
Depreciation and amortization 1,643 9,405
Deferred income taxes 1,305
Stock-based compensation 505 703
Changes in working capital (4,524 ) 13,555
Other assets 130 87
Other long-term liabilities (504 ) (396 )
Other   468     657  
Net cash used by operating activities $ (7,307 ) $ (9,402 )
 




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