Stanley Furniture Reports on 2011

January 31, 2012  by in UnCategorized   

By Home Furnishings Business in Case Goods on February 1, 2012

Case goods vendor Stanley Furniture Co. (NASDAQ-GS: STLY) reported a fourth-quarter 2011 loss of $1.7 million on sales of $24.6 million.

For the year, Stanley lost $8.6 million, and sales fell 23.6 percent from 2010 to $104.6 million.

"Last year was transformational for our company as we and our customers dealt with the challenges associated with product line and operational restructuring," said Glenn Prillaman, president and CEO of Stanley Furniture, Stanleytown, "Va. We are very pleased with our improvements over the previous year as our financial results reflect the impact of our strategic decisions to align operations with customer demand for differentiated product. Sales results reflect both the lack of dependable service to our customers caused by each product line transitioning into new operating models, as well as the sluggish retail environment for case goods furniture in the premium segment."

Cash on hand at Dec. 31 was $17.3 million, including $1.6 million in restricted cash. Working capital, excluding cash and restricted cash, increased from $27.2 million on Dec. 31, 2010 to $28.8 million at year-end due mostly to a build in finished goods inventory to support the Stanley Furniture product line which is now completely sourced overseas.

"Protecting the strength of our balance sheet remains a top priority as we invest in our business to improve in three main areas: modernizing our Young America manufacturing facility in North Carolina; servicing customers and supporting the growth of the Stanley Furniture product line with sufficient investment in finished goods inventory; and initiating customer care efforts to communicate timely and accurate information," Prillaman said.

The company detailed further the capital investments associated with its initiatives to modernize its domestic manufacturing facility and to better care for its customers.

"We are committed to completing our efforts to reinvent a manufacturing process in Robbinsville, N.C., to compete globally and occupy a meaningful space in the children's furniture marketplace," said Micah Goldsteen, chief operating and financial officer. "Our capital investments last year and those we will make in 2012 show this commitment. In 2011, we invested $4.2 million in new machinery and equipment and in 2012 we are planning an additional investment of approximately $4 million to sufficiently automate this plant. In addition, our customers currently require better information supporting the sale and delivery of our products. We are excited about our plan to invest approximately $3 million over the next two years in new systems that will make doing business with our company more desirable as we enter 2013."

Prillaman said the Stanley Furniture product line is now profitable, operating on an exclusively overseas manufacturing platform.

"However, we have not completed the transition of our Young America product line and have not yet become a profitable domestic manufacturer," he said. "We believe we are roughly half of the way through this journey and, when completed, we will have an Internet-age brand ready for the younger consumer supported by a product offering difficult to duplicate from Asia. As a domestic operation, we are in control of our effort to create a flexible manufacturing footprint that enables a more favorable cost structure, shorter lead times and higher inventory turns. Significant improvements in our Robbinsville facility have been made to date and will continue throughout the coming year."