Stanley Furniture Company, Inc.reported sales and operating results for 2010.
Net sales of $137.0 million decreased 14.6% compared to 2009. A net loss of $43.8 million ($4.11 per share) was incurred in 2010 compared to a net loss of $11.8 million ($1.14 per share) in 2009. The increased loss in 2010 resulted primarily from the near-term impact of actions taken in conjunction with the Company’s restructuring plans and lower sales.
Income of $1.6 million was recorded in 2010 from the receipt of funds under the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) involving wooden bedroom furniture imported from China and other related payments, net of legal expenses compared to $9.3 million in 2009.
Cash on hand was $25.5 million at December 31, 2010. Working capital, excluding cash and current maturities of long-term debt, decreased to $27.2 million at year-end 2010 compared to $46.9 million at December 31, 2009. The lower working capital is primarily due to reductions in inventories and accounts receivable in response to lower sales.
Several special items in the fourth quarter of 2010 impacted the Company’s cash flows. These items included:
receipt of $2.2 million from CDSOA payments in connection with the case involving wooden bedroom furniture imported from China, raising $12.0 million from the issuance of 4 million shares of its common stock in a rights offering, prepayment in full of the Company’s outstanding debt with Prudential Insurance Company of America and other lenders in the amount of $15 million, receipt of $2.3 million from the sale of machinery and equipment no longer needed as a result of ceasing production at the Stanleytown, Virginia facility, and receipt of $4.9 million from the sale of the Stanleytown, Virginia facility and Martinsville, Virginia facility.
“Our near-term outlook on consumer demand in the premium segment of the wood residential market remains unfavorable,” commented Glenn Prillaman, President and Chief Executive Officer. “However, after a year of restructuring our business, recruiting new members to our management team, and strengthening our balance sheet in the fourth quarter, we believe we are well positioned to execute our strategy and have established a pathway to generate profits from operations.
“The Company's two branded product lines now utilize distinct operational models. Each model is specifically tailored to address the demand drivers for that product line in the wood residential market’s premium segment.
“Our adult furniture product line, marketed as Stanley Furniture, is now made completely offshore since we ceased manufacturing in our Stanleytown facility late last year. We are the most important customer to a minimal number of smaller, specialty manufacturers in Southeast Asia. Style and finish are the key points of product differentiation in the luxury case goods market. Our overseas associates are experts in these areas and deliver these product features at a tremendous value to our customer.
“Our infant/youth furniture product line, marketed as Young America, is now manufactured domestically in one facility of our own because proximity to market and production control positions us to differentiate our products from competition through customization, selection, quick delivery and the ability to provide parents assurance of safe, healthy products for their child,” concluded Prillaman.
About Stanley Furniture Company, Inc.: Established in 1924, Stanley Furniture Company, Inc. is a leading designer and manufacturer of wood furniture targeted at the premium price range of the residential market. Its common stock is traded on the Nasdaq stock market under the symbol STLY.