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8-K - FORM 8-K - HG Holdings, Inc. | c16072e8vk.htm |
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE:
|
Stanley Furniture Company, Inc. | |
April 26, 2011
|
Investor Contact: Micah S. Goldstein | |
(276) 627-2565 |
STANLEY FURNITURE ANNOUNCES
FIRST QUARTER 2011 OPERATING RESULTS
FIRST QUARTER 2011 OPERATING RESULTS
Losses Narrow As New Operations Model Shows Substantial Progress
STANLEYTOWN, VA, April 26, 2011/Businesswire/ Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY)
today reported sales and operating results for the first quarter of 2011.
Net sales for the quarter decreased 4% to $26.6 million compared to $27.7 million in the fourth
quarter of 2010. Order backlog grew $2.2 million as the company completed the first full quarter
with its new operational strategy announced in May of last year. Sales were consistent with our
expectations for the first quarter, said Glenn Prillaman, Chief Executive Officer. Over the
coming quarter we expect our backlog to narrow as the flow of goods from our Stanley product line
improves from our overseas partners and as our Young America manufacturing facility in North
Carolina continues to improve service to its customers, Mr. Prillaman continued. Net loss for the
quarter improved to $3.9 million, or $.27 per share compared to a net loss of $8.3 million, or $.73
per share, in the fourth quarter of 2010.
Operating loss narrowed substantially to $3.4 million compared to the $10.4 million operating loss
in the fourth quarter of 2010. The Company generated positive gross margins of $1.7 million or 6.3%
in the first quarter, ending four consecutive quarters of negative gross margins. While we are
still in the early stages of our new operating model, both customer reaction and financial
performance indicate that we are making significant progress, said Prillaman. We completed our
restructuring plan in the first quarter and recorded $768,000 in related expenses, most of which
consumed cash. Operating loss for the fourth quarter of 2010 included $2.5 million of
restructuring expenses and $2.4 million of accelerated depreciation.
Cash on hand at quarter-end was $22.3 million down from $25.5 million at December 31, 2010.
Working capital, excluding cash, decreased slightly to $26.5 million from $27.2 million at year-end
2010. The combination of our efforts to raise capital late in 2010 and our improved
performance in the first quarter has protected the strength of our balance sheet, said Prillaman.
Inventories declined from $25.7 million at year-end to $22.8 million at the end of the first
quarter. Subsequent to quarter-end, the company received a $3.1 million tax refund.
Our path towards profitability continues, said Prillaman. Our focus remains on reaching
profitability at the operating level at some point in the second half of this year. Our people
believe in our plan, and we have demonstrated that we have the necessary resources. While we know
we have substantial hurdles ahead, we are pleased with our results and our progress on several
fronts.
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 Wednesday morning, April 27, 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 May 3, 2011) is (877) 660-6853, the account reference number is 275 and the conference
number is 368350.
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, our success in transitioning our adult product line to offshore vendors,
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, 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 | ||||||||||||
April 02, | December 31, | April 03, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Net sales |
$ | 26,571 | $ | 27,689 | $ | 36,524 | ||||||
Cost of sales |
24,886 | 33,711 | 39,563 | |||||||||
Gross profit (loss) |
1,685 | (6,022 | ) | (3,039 | ) | |||||||
Selling, general and administrative expenses |
5,121 | 4,363 | 5,470 | |||||||||
Goodwill impairment charge |
9,072 | |||||||||||
Operating loss |
(3,436 | ) | (10,385 | ) | (17,581 | ) | ||||||
Income from Continued Dumping
and Subsidy Offset Act, net |
1,556 | |||||||||||
Other income, net |
29 | 6 | 15 | |||||||||
Interest income |
2 | |||||||||||
Interest expense |
538 | 707 | 1,058 | |||||||||
Loss before income taxes |
(3,945 | ) | (9,530 | ) | (18,622 | ) | ||||||
Income tax (benefit) expense |
(16 | ) | (1,206 | ) | 451 | |||||||
Net loss |
$ | (3,929 | ) | $ | (8,324 | ) | $ | (19,073 | ) | |||
Diluted loss per share |
$ | (.27 | ) | $ | (.73 | ) | $ | (1.85 | ) | |||
Weighted average number of shares |
14,345 | 11,345 | 10,335 | |||||||||
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 | ||||||||||||
April 2, | December 31, | April 3, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Reconciliation of operating
loss as
reported to operating loss
adjusted: |
||||||||||||
Operating loss as reported |
$ | (3,436 | ) | $ | (10,385 | ) | $ | (17,581 | ) | |||
Goodwill impairment charge |
9,072 | |||||||||||
Plus accelerated depreciation |
2,403 | |||||||||||
Plus restructuring charge |
768 | 2,511 | 24 | |||||||||
Operating loss as adjusted |
$ | (2,668 | ) | $ | (5,471 | ) | $ | (8,485 | ) | |||
Reconciliation of net loss
as reported
to net loss adjusted: |
||||||||||||
Net loss as reported |
$ | (3,929 | ) | $ | (8,324 | ) | $ | (19,073 | ) | |||
Goodwill impairment charge |
9,072 | |||||||||||
Less income from CDSOA, net |
1,427 | |||||||||||
Plus accelerated depreciation |
2,099 | |||||||||||
Plus restructuring charge |
768 | 2,193 | 24 | |||||||||
Net loss as adjusted |
$ | (3,161 | ) | $ | (5,459 | ) | $ | (9,977 | ) | |||
Reconciliation of loss per
share (EPS)
as reported to loss per
share adjusted: |
||||||||||||
EPS as reported |
$ | (.27 | ) | $ | (.73 | ) | $ | (1.85 | ) | |||
Goodwill impairment charge |
.88 | |||||||||||
Less income from CDSOA, net |
.13 | |||||||||||
Plus accelerated depreciation |
.19 | |||||||||||
Plus restructuring charge |
.05 | .19 | ||||||||||
EPS as adjusted |
$ | (.22 | ) | $ | (.48 | ) | $ | (.97 | ) | |||
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)
April 02, | December 31, | April 03, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash |
$ | 22,314 | $ | 25,532 | $ | 33,646 | ||||||
Accounts receivable, net |
12,280 | 9,888 | 16,123 | |||||||||
Inventories |
22,764 | 25,695 | 35,490 | |||||||||
Prepaid expenses and other current assets |
4,231 | 5,883 | 12,431 | |||||||||
Income tax receivable |
4,020 | 3,952 | ||||||||||
Deferred income taxes |
704 | 1,021 | 1,981 | |||||||||
Total current assets |
66,313 | 71,971 | 99,671 | |||||||||
Property, plant and equipment, net |
16,004 | 15,980 | 30,338 | |||||||||
Other assets |
445 | 132 | ||||||||||
Total assets |
$ | 82,317 | $ | 88,396 | $ | 130,141 | ||||||
Liabilities and Stockholders Equity |
||||||||||||
Current liabilities: |
||||||||||||
Current maturities of long-term debt |
$ | 12,857 | ||||||||||
Accounts payable |
$ | 7,412 | $ | 9,116 | 11,239 | |||||||
Accrued expenses |
10,077 | 10,086 | 8,287 | |||||||||
Total current liabilities |
17,489 | 19,202 | 32,383 | |||||||||
Long-term debt |
15,000 | |||||||||||
Deferred income taxes |
704 | 1,021 | 1,981 | |||||||||
Other long-term liabilities |
6,326 | 6,378 | 6,716 | |||||||||
Stockholders equity |
57,798 | 61,795 | 74,061 | |||||||||
Total liabilities and stockholders equity |
$ | 82,317 | $ | 88,396 | $ | 130,141 | ||||||
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
Consolidated Condensed Statements of Cash Flows
(in thousands)
Three Months Ended | ||||||||
April 02, | April 03, | |||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Cash received from customers |
$ | 24,139 | $ | 35,594 | ||||
Cash paid to suppliers and employees |
(28,330 | ) | (43,748 | ) | ||||
Interest paid |
(1 | ) | ||||||
Income taxes (paid) received, net |
(52 | ) | 3 | |||||
Net cash used by operating activities |
(4,243 | ) | (8,152 | ) | ||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(409 | ) | (2 | ) | ||||
Purchase of other assets |
(38 | ) | (146 | ) | ||||
Proceeds from sale of assets |
1,472 | |||||||
Net cash provided (used) by investing activities |
1,025 | (148 | ) | |||||
Cash flows from financing activities: |
||||||||
Proceeds from exercise of stock options |
119 | |||||||
Net cash provided by financing activities |
119 | |||||||
Net decrease in cash |
(3,218 | ) | (8,181 | ) | ||||
Cash at beginning of period |
25,532 | 41,827 | ||||||
Cash at end of period |
$ | 22,314 | $ | 33,646 | ||||
Reconciliation of net loss to net cash used by operating activities: |
||||||||
Net loss |
$ | (3,929 | ) | $ | (19,073 | ) | ||
Goodwill impairment |
9,072 | |||||||
Depreciation and amortization |
387 | 1,042 | ||||||
Deferred income taxes |
1,307 | |||||||
Stock-based compensation |
8 | 181 | ||||||
Changes in working capital |
(1,167 | ) | (1,103 | ) | ||||
Other assets |
510 | 482 | ||||||
Other long-term liabilities |
(52 | ) | (60 | ) | ||||
Net cash used by operating activities |
$ | (4,243 | ) | $ | (8,152 | ) | ||