Stanley's Sales off 29.2% in 2009

February 3, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on February 4, 2010

Stanley Furniture Company Inc. (Nasdaq-NGS: STLY), Stanleytown, Va., on Wednesday reported 2009 net sales of $160.5 million, a 29.2 percent decrease from 2008; and a net loss of $11.8 million, compared with net income of $3.7 million in 2008.

In fourth-quarter of 2009, Stanley had net sales of $39.9 million, a 20.8 percent drop from the prior-year period; and a net loss of $1.28 million, compared with net income of $6.2 million in 2008's fourth quarter.

The increased operating loss in 2009 is primarily due to the significant reduction in sales and production levels. The much lower production levels led to unfavorable factory overhead variances and plant inefficiencies. Costs associated with the transition of certain items (primarily youth beds and cribs) from the company's infant and youth product line (marketed as Young America) from offshore sourcing to its own domestic manufacturing facilities and higher selling discounts also contributed to the increased operating loss in 2009.
 
"Our company has incurred significant losses this past year from the unprecedented decline in sales due to what many are describing as the 'Great Recession,'" said Glenn Prillaman, president and CEO. "In response, we have made many difficult business decisions to lower our costs, including reductions in management, supervisory, support and production staff. We believe our sales performance is indicative of consumer demand for residential wood furniture in our price segment. Demand for better goods has been relatively stable for the past several quarters; however, we see no signs of any near-term improvement.  We enter 2010 with a strong balance sheet, lower fixed costs and believe we have well-positioned product lines.".
 
Also on Wednesday Glenn Prillaman, who most recently served as president and chief operating officer since August 2009, was elected today by the company's Board of Directors to the position of president and chief executive officer and to serve as a director. Albert Prillaman will continue as chairman.

"In this challenging period facing our industry and our company, I will continue to focus my energies as chairman on strategic issues and board matters, while Glenn will be responsible for all operational aspects of the business," said Albert Prillaman.