Stanley Furniture Company, Inc. reported sales and operating results for the second quarter of 2015.
After exiting the first quarter with headwinds from inclement weather and the West Coast port strike, Stanley Furniture reported both operating and net profits for the second quarter of 2015.
“After only a few quarters of operating in our new business model focused on design, marketing and sourcing, our company is now operating profitably and generating earnings for our shareholders,” said Glenn Prillaman, President and Chief Executive Officer. “The demand for case goods in traditional channels of distribution remains difficult to predict, yet the initiatives we have underway give us confidence in our plan for this year’s growth and profitability.”
The expansion of the company’s case goods product line into the nursery and youth category is expected to help fuel future sales gains. Orders from large regional retailers and smaller independent stores alike continue to support the launch of this new product line, which began shipping from overseas in early July. Initial testing of the company’s new consumer marketing platform continues. This effort is focused on driving consumer traffic from the web to the company’s wholesale customer base. Several other initiatives specifically targeted for growth in one or more channels of distribution are also scheduled for launch this year.
“Management made a lot of progress in the period,” continued Prillaman. “We improved our margins considerably, kept our spending in check, completed the sale of the inventory associated with our discontinued product line and remained in a very healthy cash position.”
Second quarter 2015 financial results:
- Net sales were $15.1 million, down 5.6% from prior year.
- Gross profit improved to 25.4% compared to 17.0% in the prior year second quarter.
- Selling, general and administrative expenses were $3.5 million, or 22.8% of net sales, compared to $4.2 million, or 26.1% of net sales in the prior year comparable quarter.
- Operating income was $387,000, or 2.6% of net sales, compared to an operating loss of $1.5 million in the prior year second quarter.
Net income from continuing operations was $1.3 million, which included the receipt of $1.1 million in distributions to the company related to the Continued Dumping Subsidy Offset Act of 2000 (CDSOA).
As of June 27, 2015, the company’s financial position reflected $5.5 million in cash and restricted cash and $20.5 million in net cash surrender value on life insurance policies.
Year-to-date 2015 financial results:
- Net sales were $29.8 million, down 2.8% from prior year.
- Operating loss was $276,000 compared to operating loss of $2.8 million last year.
- Net Income from continuing operations was $4.0 million, including the receipt of $4.9 million in CDSOA proceeds, compared to a net loss of $3.9 million in the prior year six months.
- Proceeds received in the CDSOA distribution during the first half were used to pay down policy loans on life insurance policies used to fund the company’s legacy deferred compensation plan.
“This quarter represents a significant milestone for our company,” commented Prillaman. “We have turned the corner on what has been a tremendously challenging transition into what the Stanley brand represents in the home furnishings marketplace today. We enjoy the goodwill of over 90 years of serving our customers and we are focused on attracting and retaining customers to drive growth.”
About the Company:
Established in 1924, Stanley Furniture Company, Inc. is a leading design, marketing and sourcing resource in the upscale segment of the wood residential market. The company offers a diversified product line supported by an overseas sourcing model. The company distributes and markets its Stanley Furniture brand through a network of carefully chosen retailers and interior designers worldwide. The company’s common stock is traded on the NASDAQ stock market under the symbol STLY.
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