Stanley 3rd-Quarter Sales Off 25.6%

October 13, 2008  by in UnCategorized   

By Home Furnishings Business in Case Goods on October 2008 Case goods vendor Stanley Furniture Co., Stanleytown, Va., reported third-quarter 2008 net sales of $54.5 million, a 25.6 percent decrease from the third quarter of 2007. Year-to-date sales of $176.2 million were down 18.4 percent compared with last year’s first nine months.

A third-quarter loss of $3.5 million, or 34 cents per share, compares with earnings of $1.6 million, or 16 cents per share, in the prior year quarter. Third-quarter 2008 includes a charge of 25 cents per share for costs related to the consolidation of two manufacturing facilities into one and other restructuring actions announced during the period.

Stanley lost $2.5 million, or 24 cents per share, through the first nine months of 2008, compared with net income of $935,000, or 9 cents per share, at the same point last year. The 2008 period includes restructuring charges of 29 cents per share, and the 2007 period includes a pension termination charge of 42 cents per share.

“Excluding restructuring charges, operating income was near a break-even level due to the significant decline in sales,” said Stanley Chairman and CEO Albert L. Prillaman in an announcement of the results. “The manufacturing consolidation and other difficult moves we are making throughout our business are progressing on plan. This restructuring will lower our costs going forward and position the business for success when demand eventually improves. Meanwhile, we continued to generate positive cash flow and improve our already strong financial position in the third quarter.”

“Order rates over the last ten days have deteriorated significantly; however, we believe our mid-July guidance range for total year 2008 earnings before restructuring charges remains reasonable assuming there is some near term resolution of the credit crisis,” Prillaman said. However, management now expects total charges for the restructuring and related activities announced in the third quarter for 2008 to range from $7 million to $9 million, an increase of $1 million from last quarter’s estimate to account for a severance payment due to the resignation of Jeff Scheffer, former president. Approximately $5.2 million of these charges were recorded in the third quarter of 2008. A portion of the remaining estimated charges may be recorded into 2009 depending upon the timing of the final disposition of assets associated with a plant closure.

Stanley also announced Monday that its board of directors has declared a regular quarterly cash dividend of 10 cents per share payable on Dec. 1 to shareholders of record on Nov. 7.