Stanley Furniture Earnings Per Share Increase 36.5 Percent on Sales Gain of 14.6 Percent
Furniture World Magazine
Stanley Furniture Company, Inc. (Nasdaq: STLY) today reported higher sales and earnings for the first quarter of 2004. Both sales and earnings exceeded management's upwardly revised guidance for the quarter issued in mid-March. Customer orders exceeded management's expectations for the second half of March and, due to the Company's ability to respond quickly, resulted in higher than expected sales.
Net sales of $70.2 million increased 14.6% from the first quarter of last year. This marks the eighth consecutive quarter of sales growth over the comparable prior year quarter. Earnings per share grew 36.5% to $.71 compared to $.52 in the first quarter of 2003.
Operating income rose to $7.8 million, or 11.1% of net sales, in the first quarter of 2004 from $6.1 million, or 10.0% of net sales, in the first quarter of 2003. Higher sales, increased production levels at the Company's domestic facilities, although at a slower growth rate than sales due to the growth of sourced items, and savings from sourcing initiatives drove the improvement. Approximately 26% of sales came from sourced items in the first quarter of 2004.
Management expects sales from sourced items to level off around 30% of sales for total year 2004.
Strong cash flow from operations was used to reduce debt $4.3 million, pay cash dividends of $622,000 and increase the Company's cash on hand $2.8 million. Approximately $10.2 million remains authorized by the Company's Board of Directors to repurchase shares of the Company's common stock. Total debt outstanding was $18.4 million and cash on hand was $5.4 million at March 27, 2004.
Business Outlook: "We are pleased to report our eighth consecutive quarter of year-over-year sales growth," commented Jeffrey R. Scheffer, president and chief executive officer. "As we have previously reported, the significant sales momentum which began last summer continued through the first quarter and into early April. It appears that improved economic conditions are finally producing positive industry growth. However, we believe a large portion of our sales growth continued to come from market share gains. While it is difficult to forecast market share gains in advance, this has caused us to raise our sales and earnings guidance for 2004 as outlined below.
Our focus is to create exciting designs, produce high-quality product and provide excellent service," Scheffer continued. "Best product is determined by both design and price. Blending efficient domestic manufacturing in highly focused facilities with intelligent outsourcing of certain component parts and finished goods allows us to offer a compelling value proposition. This combination gives Stanley a competitive advantage by offering higher value and well-styled product, without sacrificing our culture of high quality and fast delivery. Our market share gains provide encouraging evidence that our customers are responding favorably and that we are executing the strategy well," Scheffer concluded.
All earnings per share 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. Manufacturing facilities are located in Stanleytown and Martinsville, VA and Robbinsville and Lexington, NC. Its common stock is traded on the Nasdaq stock market under the symbol STLY.