Stanley Furniture Posts 3Q Loss

November 4, 2010  by in UnCategorized   

By Home Furnishings Business in Case Goods on November 5, 2010 Stanley Furniture Co. (NASDAQ: STLY)  reported a net loss of $4.9 million for the third quarter, compared to a net loss of $5.1 million in the same quarter of last year.

Net sales for the quarter were $34.9 million, a 9.3 percent drop from net sales in the third quarter.

The company reported an operating loss for the third quarter of 2010 of $6.4 million, compared to an operating loss of $7.5 million in the third quarter of 2009. The 2010 third quarter loss includes accelerated depreciation charges of $2.3 million related to Stanley's restructuring plan announced in May.

"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."

The company is still in transition with its plan to push its adult product line to an off-shore production model, and its Young America line to a completely domestic model. The Young America line is now being produced in the Stanley factory in Robbinsville, N.C.

The move of the adult line to a global model is still in the works, and the company expects to shutter its Stanleytown, Va., factory in December.

"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," Prillaman said. "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."

The entire earnings release is available online.