Stanley Furniture Company, Inc. reported sales and operating results for the third quarter of 2009. Net sales of $38.5 million decreased 29.4% from the third quarter of 2008. This quarter’s loss per share of $.49 compares to a loss of $.34 per share in the prior year quarter.
The current year quarter includes accelerated depreciation of $.06 per share due to a previously announced warehouse consolidation. The prior year quarter includes a charge of $.27 per share for costs primarily related to the consolidation of two manufacturing facilities into one.
For the first nine months of 2009, net sales of $120.5 million decreased 31.6% from the comparable prior year period. Loss per share for the first nine months of 2009 was $1.01 compared to a loss of $.24 per share for the same period of 2008 including restructuring charges of $.07 per share and $.29 Year-to-date operating loss was $14.6 million. This compares to an operating loss of $2.6 million for the first nine months of 2008. These operating losses include pre-tax restructuring charges of $1.2 million in the 2009 period and $5.5 million in the 2008 period. The increased operating loss is primarily due to the significant reduction in sales and production levels. The much lower production levels have led to significant unfavorable factory overhead variances and plant inefficiencies.
Costs associated with the transition of approximately one-third of the Company’s Young America product line from off-shore sourcing to its own domestic manufacturing facilities and higher selling discounts also contributed to the increased operating loss in 2009. Cash on hand amounted to $42.4 million and total debt equaled $27.9 million at September 26, 2009.
Working capital, excluding cash and current maturities of long-term debt, decreased to $46.1 million at September 26, 2009 compared to $53.8 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 inventories and accounts receivable in response to lower sales.
“We believe our sales performance is indicative of consumer demand for residential wood furniture in our price segment,” said Albert Prillaman, Chairman and Chief Executive Officer. “Demand for better goods continues to bump along at very depressed levels and we see no signs of any near-term improvement. We are disappointed with our operating results, as our sales have declined at a faster rate than we have been able to adjust our cost structure.”
“We are currently evaluating additional initiatives to further reduce costs, and lower our break even point. We believe the actions we have already taken along with these additional initiatives will improve our operating results in the current recessionary environment and better position the Company for profitable growth,” said Glenn Prillaman, President and Chief Operating Officer. “Our recent sales and marketing efforts to reposition our Young America product line as the trusted brand in our industry has been initially well received. Our green, safety, color and quality initiatives can best be understood by visiting our b2b website yamadeinusa.com.”
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.