Stanley Furniture 2Q Sales Down 10.5%

August 11, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on August 12, 2010

Stanley Furniture Co. (NASDAQ:STLY) announced Wednesday that second-quarter 2009 sales fell 10.5 percent from the same period last year to $37.9 million.

Net loss for the quarter was $11.5 million, or $1.11 per share, compared with a net loss of $3 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 with an 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.

"As expected, our second-quarter operating results excluding special items were similar to the first quarter," said Glenn Prillaman, president and CEO of Stanley, Stanleytown, Va. "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.

"We are making good progress on the restructuring plan announced in May 2010 setting our path towards profitability. We continue to transition our two major product lines in opposite operational directions to better align operations with the factors which drive demand for each product line."

He added that the majority of the transition of Stanley's Young America product line is now complete.

"The increase in prices on this product line is now in effect and sales have stabilized after an anticipated initial drop," Prillaman said. "We expect to narrow our operating losses in the second half of this year due to this pricing action and improved operating efficiencies at our Robbinsville, N.C., plant. On the other hand, most of the transition related to the movement of our Stanley Furniture adult product line from a domestic to a global sourcing model lies ahead of us, and we expect to complete this transition over the remainder of 2010. The overseas factories to which we are moving product are already making a significant portion of this product line, and while there is heavy lifting yet to be done, we anticipate a smooth transition as we become increasingly important to these existing overseas suppliers."