Stanley Furniture Company, Inc. reported sales and earnings for the second quarter of 2009.
Net sales of $42.3 million declined 28.4% from the second quarter of 2008. Loss per share of $.29 compares to a loss per share of $.01 in the prior year quarter.
For the first half of 2009, net sales of $82.1 million decreased 32.5% from the comparable prior year period. Loss per share of $.52 for the first half of 2009 compares to earnings of $.09 per share in the first half of 2008. The first half of 2009 and 2008 include restructuring charges of $.01 and $.02 per share, respectively.
Year-to-date operating loss was $7.2 million, compared to operating income of $3.0 million for the first half of 2008. The decrease in operating income is primarily due to lower sales and production levels. The operating loss increased in the second quarter compared to the first quarter primarily due to plant inefficiencies, higher selling discounts and increased factory overhead variances due to lower production levels.
The Company also announced today plans to consolidate its Lexington, NC warehouse operation into other Company owned warehouse space, primarily at the Robbinsville, NC facility. The transition is expected to be completed by the end of 2009 and is expected to improve annual operating income by approximately $1.3 million starting in 2010. The Company anticipates recording accelerated depreciation of approximately $1.7 million over the next two quarters. The 28 associates at the Lexington, NC warehouse will be eligible for positions in Robbinsville, NC or Stanleytown, VA.
Cash on hand amounted to $40.7 million and total debt equaled $27.9 million at June 27, 2009. Working capital, excluding cash and current maturities of long-term debt, decreased to $51.3 million at June 27, 2009 compared to $57.3 million at the end of the year-ago quarter and $54.5 million at December 31, 2008. The lower working capital is primarily due to reductions in accounts receivable and inventories in response to lower sales.
The Company expects to receive approximately $6 million to $7 million in the fourth quarter of 2009 from Continued Dumping and Subsidy Offset Act payments from the antidumping order covering Wooden Bedroom Furniture imported from China into the U.S. market. This estimate is based upon recent disclosures made by U.S. Customs and Border Protection as to the amount of funds available for distribution and assumes the Company’s percentage allocation remains the same as last year.
“Given the sequential improvement in sales in the second quarter compared to the first quarter of this year and a stable order rate for the past few months, we are seeing signs that sales levels may have reached a bottom,” explained Stanley Furniture’s Chairman and CEO Albert L. Prillaman. “However, we see no indication of any sustained upturn.”
Other Information
All earnings per share amounts are on a diluted basis.
Established in 1924, Stanley Furniture Company, Inc. is a leading manufacturer of wood furniture targeted at the upper-medium price range of the residential market. Its common stock is traded on the Nasdaq stock market under the symbol STLY.