From Home Furnishing Business
Stanley Reports Q4 Loss as Production Woes Continue
Stanley Furniture (NASDAQ: STLY) reported a fourth-quarter net loss of $301,000 or 2 cents per share as the company continued to experience delays receiving product from a key factory in Vietnam.
Sales tumbled 29% to $9.8 million, as the company acknowledged that most of the products it has introduced during the past 18 months have yet to reach retail floors.
Stanley officials said demand for newer products continues to outstrip capacity at a Vietnam plant built specifically for the company by Starwood Manufacturing Corp. As a result, the company is ramping up orders with other offshore factories, and said it hopes to begin alleviating the backlog by the second quarter.
"Our sales declines do not provide a clear picture of the demand for and marketability of product offerings developed and sold to our wholesale customer base over the past eighteen months, nor do they speak to the strength of our diverse retail distribution network waiting for sufficient stock availability of these more marketable goods," said Glenn Prillaman, president and CEO. "The past year’s financials reflect our struggle to capitalize on a strategic manufacturing alliance with an overseas vendor and we have initiated plans to fulfill order backlog through other existing sources with whom we already do business.”
The most recent quarter included income of $1.1 million from anti-dumping duties.
In the previous year’s fourth quarter, Stanley had net income of $919,000 or 6 cents per share, including income from anti-dumping duties of $412,000.
For the 2016 calendar year, sales fell 22.3% to $44.6 million. The net loss for the year totaled $5.26 million or 37 cents per share.
In 2015, the company recorded net income of $5.34 million or 37 cents per share, but that figure included income from anti-dump $5.31 million.
Prillaman said he expects the company to return to profitability in the second quarter as shipments from other offshore vendors begin filling its order backlog.
“Management has focused on controlling spending and managing cash balances over recent quarters, despite the difficulties presented by operating with revenues below the company's break-even level," he said. "The opportunity to leverage growth as overseas capacity is better aligned with customer demand for newer products is a very important factor in our outlook for the coming year.”