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8-K - FORM 8-K - HG Holdings, Inc. | c20195e8vk.htm |
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE: | Stanley Furniture Company, Inc. | |||
July 20, 2011
|
Investor Contact: | Micah S. Goldstein (276) 627-2565 |
STANLEY FURNITURE ANNOUNCES
SECOND QUARTER 2011 OPERATING RESULTS
SECOND QUARTER 2011 OPERATING RESULTS
Operating Loss Narrows Substantially Again in the Second Quarter
STANLEYTOWN, VA, July 20, 2011/Businesswire/ Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY)
today reported sales and operating results for the second quarter of 2011.
Net sales for the quarter increased 3.1% to $27.4 million compared to $26.6 million in the first
quarter of 2011. Sales growth in the second quarter represented our first sequential quarter
increase in over a year. While we do not believe the slight increase represents any positive
macro-level signs, our reaching a meaningful top line milestone is important given the recent
changes in our operational model., said Glenn Prillaman, President and Chief Executive Officer.
We are still operating in a sluggish retail environment that continues to deal with a stagnant
housing market. However, as our efforts to build our product offering and improve our service
position continue to take hold, we believe we should recapture lost market share from our
restructuring period. Prillaman continued. Net loss for the quarter decreased to $595,000, or
$.04 per share compared to a net loss of $3.9 million, or $.27 per share, in the first quarter of
2011.
Operating loss narrowed by 67.5% to $1.1 million from $3.4 million in the first quarter of 2011.
Gross margins increased to $3.6 million, or 13.3% of net sales, in the second quarter from $1.7
million, or 6.3% of net sales, in the first quarter. We made significant operational progress
again in the second quarter, and believe more room for improvement exists even if sales remain flat
in the next quarter, said Micah Goldstein, Chief Operating and Financial Officer.
Cash on hand at quarter-end was $24.0 million, up from $22.3 million on March 31, 2011. Working
capital, excluding cash, decreased to $22.6 million from $26.5 million at the end of the first
quarter. The Company received $3.1 million in tax refunds and $1.1 million in Continued Dumping
and Subsidy Offset Act proceeds during the second quarter. Inventories increased from $22.8 million
on March 31, 2011 to $23.9 million at the end of the second quarter. We continue to be diligent in
our efforts to protect our balance sheet, said Prillaman. Now that we have established a track
record of improved operating results, we can use the strength of our balance sheet to invest in our
operations specifically targeting opportunities to improve service levels for our customers,
Prillaman added.
We are pleased with our continued progress towards reaching profitability. Our focus remains on
regaining the confidence of our customers, Prillaman concluded.
All earnings per share amounts are on a diluted basis.
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.
Conference Call Details
The Company will host a conference call Thursday morning, July 21, 2011 at 9:00 a.m. Eastern Time.
The dial-in-number is (877) 407-8029. The call will also be web cast and archived on the Companys
web site at www.stanleyfurniture.com. The dial-in-number for the replay (available through July
28, 2011) is (877) 660-6853, the account reference number is 275 and the conference number is
373696.
Forward-Looking Statements
Certain statements made in this news release are not based on historical facts, but are
forward-looking statements. These statements can be identified by the use of forward-looking
terminology such as believes, estimates, expects, may, will, should, or anticipates,
or the negative thereof or other variations thereon or comparable terminology, or by discussions of
strategy. These statements reflect our reasonable judgment with respect to future events and are
subject to risks and uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties include our success in profitably
producing Young America products in our domestic manufacturing facility, disruptions in offshore
sourcing including those arising from supply or distribution disruptions or those arising from
changes in political, economic and social conditions, as well as laws and regulations, in countries
from which we source products, international trade policies of the United States and countries from
which we source products, the inability to raise prices in response to inflation and increasing
costs, lower sales due to worsening of current economic conditions, the cyclical nature of the
furniture industry, failure to anticipate or respond to changes in consumer tastes and fashions in
a timely manner, business failures or loss of large customers, competition in the furniture
industry including competition from lower-cost foreign manufacturers, our success in transitioning
our adult product line to offshore vendors, the inability to obtain sufficient quantities of
quality raw materials in a timely manner, environmental, health, and safety compliance costs, and
extended business interruption at our manufacturing facility. Any forward-looking statement speaks
only as of the date of this news release and we undertake no obligation to update or revise any
forward-looking statements, whether as a result of new developments or otherwise.
TABLES FOLLOW
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
Consolidated Operating Results
(in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 2, | April 2, | July 3, | July 2, | July 3, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Net sales |
$ | 27,393 | $ | 26,571 | $ | 37,902 | $ | 53,964 | $ | 74,426 | ||||||||||
Cost of sales |
23,760 | 24,886 | 43,648 | 48,646 | 83,211 | |||||||||||||||
Gross profit (loss) |
3,633 | 1,685 | (5,746 | ) | 5,318 | (8,785 | ) | |||||||||||||
Selling, general and administrative expenses |
4,748 | 5,121 | 5,644 | 9,869 | 11,114 | |||||||||||||||
Goodwill impairment charge |
9,072 | |||||||||||||||||||
Operating loss |
(1,115 | ) | (3,436 | ) | (11,390 | ) | (4,551 | ) | (28,971 | ) | ||||||||||
Income from Continued Dumping
and Subsidy Offset Act |
1,117 | 1,117 | ||||||||||||||||||
Other income, net |
21 | 29 | 22 | 50 | 37 | |||||||||||||||
Interest income |
3 | 1 | 3 | 3 | ||||||||||||||||
Interest expense |
586 | 538 | 915 | 1,124 | 1,973 | |||||||||||||||
Loss before income taxes |
(560 | ) | (3,945 | ) | (12,282 | ) | (4,505 | ) | (30,904 | ) | ||||||||||
Income tax (benefit) expense |
35 | (16 | ) | (823 | ) | 19 | (372 | ) | ||||||||||||
Net loss |
$ | (595 | ) | $ | (3,929 | ) | $ | (11,459 | ) | $ | (4,524 | ) | $ | (30,532 | ) | |||||
Diluted loss per share |
$ | (.04 | ) | $ | (.27 | ) | $ | (1.11 | ) | $ | (.32 | ) | $ | (2.95 | ) | |||||
Weighted average number of shares |
14,345 | 14,345 | 10,345 | 14,345 | 10,339 | |||||||||||||||
STANLEY FURNITURE COMPANY, INC.
Supplemental Information
Reconciliation of GAAP to Non-GAAP Operating Results
Supplemental Information
Reconciliation of GAAP to Non-GAAP Operating Results
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 2, | April 2, | July 3, | July 2, | July 3, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Reconciliation of operating loss as
reported to operating loss adjusted: |
||||||||||||||||||||
Operating loss as reported |
$ | (1,115 | ) | $ | (3,436 | ) | $ | (11,390 | ) | $ | (4,551 | ) | $ | (28,971 | ) | |||||
Goodwill impairment charge |
9,072 | |||||||||||||||||||
Plus accelerated depreciation |
2,087 | 2,087 | ||||||||||||||||||
Plus restructuring charge (credit) |
(277 | ) | 768 | 1,159 | 491 | 1,183 | ||||||||||||||
Operating loss as adjusted |
$ | (1,392 | ) | $ | (2,668 | ) | $ | (8,144 | ) | $ | (4,060 | ) | $ | (16,629 | ) | |||||
Reconciliation of net loss as
reported
to net loss adjusted: |
||||||||||||||||||||
Net loss as reported |
$ | (595 | ) | $ | (3,929 | ) | $ | (11,459 | ) | $ | (4,524 | ) | $ | (30,532 | ) | |||||
Goodwill impairment charge |
9,072 | |||||||||||||||||||
Less income from CDSOA |
(1,117 | ) | (1,117 | ) | ||||||||||||||||
Plus accelerated depreciation |
2,062 | 2,062 | ||||||||||||||||||
Plus restructuring charge (credit) |
(277 | ) | 768 | 1,145 | 491 | 1,169 | ||||||||||||||
Net loss as adjusted |
$ | (1,989 | ) | $ | (3,161 | ) | $ | (8,252 | ) | $ | (5,150 | ) | $ | (18,229 | ) | |||||
Reconciliation of loss
per share (EPS) as reported
to loss per share adjusted: |
||||||||||||||||||||
EPS as reported |
$ | (.04 | ) | $ | (.27 | ) | $ | (1.11 | ) | $ | (.32 | ) | $ | (2.95 | ) | |||||
Goodwill impairment charge |
.88 | |||||||||||||||||||
Less income from CDSOA |
(.08 | ) | (.08 | ) | ||||||||||||||||
Plus accelerated depreciation |
.20 | .20 | ||||||||||||||||||
Plus restructuring charge (credit) |
(.02 | ) | .05 | .11 | .03 | .11 | ||||||||||||||
EPS as adjusted |
$ | (.14 | ) | $ | (.22 | ) | $ | (.80 | ) | $ | (.37 | ) | $ | (1.76 | ) | |||||
Note:
We have included the above reconciliation of reported financial measures according to GAAP to
non-GAAP financial measures because we believe that this reconciliation provides useful information
that allows investors to compare operating results to those of other periods by excluding goodwill
impairment charge, income from CDSOA proceeds, accelerated depreciation and restructuring related
charges. These measures should be considered in addition to results prepared in accordance with
GAAP and should not be considered a substitute for or superior to GAAP results.
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
Consolidated Condensed Balance Sheets
(in thousands)
July 2, | April 2, | December 31, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash |
$ | 23,999 | $ | 22,314 | $ | 25,532 | ||||||
Accounts receivable, net |
12,529 | 12,280 | 9,888 | |||||||||
Inventories |
23,927 | 22,764 | 25,695 | |||||||||
Prepaid expenses and other current assets |
4,027 | 4,231 | 5,883 | |||||||||
Income tax receivable |
916 | 4,020 | 3,952 | |||||||||
Deferred income taxes |
789 | 704 | 1,021 | |||||||||
Total current assets |
66,187 | 66,313 | 71,971 | |||||||||
Property, plant and equipment, net |
16,976 | 16,004 | 15,980 | |||||||||
Other assets |
1,689 | 445 | ||||||||||
Total assets |
$ | 84,852 | $ | 82,317 | $ | 88,396 | ||||||
Liabilities and Stockholders Equity |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 7,606 | $ | 7,412 | $ | 9,116 | ||||||
Accrued expenses |
12,028 | 10,077 | 10,086 | |||||||||
Total current liabilities |
19,634 | 17,489 | 19,202 | |||||||||
Deferred income taxes |
789 | 704 | 1,021 | |||||||||
Other long-term liabilities |
7,073 | 6,326 | 6,378 | |||||||||
Stockholders equity |
57,356 | 57,798 | 61,795 | |||||||||
Total liabilities and stockholders equity |
$ | 84,852 | $ | 82,317 | $ | 88,396 | ||||||
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
Consolidated Condensed Statements of Cash Flows
(in thousands)
Six Months Ended | ||||||||
July 2, | July 3, | |||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Cash received from customers |
$ | 51,226 | $ | 72,387 | ||||
Cash paid to suppliers and employees |
(57,335 | ) | (88,454 | ) | ||||
Cash from Continued Dumping and Subsidy
Offset Act |
1,117 | |||||||
Interest paid |
(2,111 | ) | (3,031 | ) | ||||
Income taxes received, net |
3,022 | 6,463 | ||||||
Net cash used by operating activities |
(4,081 | ) | (12,635 | ) | ||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(834 | ) | (452 | ) | ||||
Purchase of other assets |
(38 | ) | (28 | ) | ||||
Proceeds from sale of assets |
1,472 | 1,047 | ||||||
Net cash provided by investing activities |
600 | 567 | ||||||
Cash flows from financing activities: |
||||||||
Repayment of senior notes |
(12,857 | ) | ||||||
Proceeds from exercise of stock options |
119 | |||||||
Proceeds from insurance policy loans |
2,003 | 1,845 | ||||||
Capital lease payments |
(55 | ) | ||||||
Net cash provided (used) by financing activities |
1,948 | (10,893 | ) | |||||
Net decrease in cash |
(1,533 | ) | (22,961 | ) | ||||
Cash at beginning of period |
25,532 | 41,827 | ||||||
Cash at end of period |
$ | 23,999 | $ | 18,866 | ||||
Reconciliation of net loss to
net cash used by operating activities: |
||||||||
Net loss |
$ | (4,524 | ) | $ | (30,532 | ) | ||
Goodwill impairment |
9,072 | |||||||
Depreciation and amortization |
817 | 4,129 | ||||||
Deferred income taxes |
1,307 | |||||||
Stock-based compensation |
193 | 415 | ||||||
Changes in working capital |
562 | 4,026 | ||||||
Other assets |
(1,038 | ) | (953 | ) | ||||
Other long-term liabilities |
(91 | ) | (99 | ) | ||||
Net cash used by operating activities |
$ | (4,081 | ) | $ | (12,635 | ) | ||