Stanley results down for year; earnings beat forecast
By Jay McIntosh -- Furniture Today, February 3, 2002
STANLEYTOWN, Va. — Last year's soft economy continued to hit Stanley Furniture in the fourth quarter, with sales off 17.8% from a year earlier and earnings before one-time charges down 49.5%.
But a reduced tax bill helped the company report earnings of 31 cents per share before charges in the quarter, beating the 29 cents forecast by Wall Street analysts surveyed by Thomson/First Call.
For the year, sales fell 17.2% to $234.3 million and earnings before the unusual charges were down 37.7% to $12.2 million.
Including all charges — mainly for costs related to the previously announced West End, N.C., plant closing, and for a writeoff of HomeLife debt — net income was $8.3 million for the year and $184,000 in the fourth quarter.
Albert Prillaman, chairman and chief executive officer, said the restructuring moves would improve profitability in 2002. "We'll enter this year with a 20% reduction in our work force since December 2000, so we've really got our costs down," he said.
He said last year's sales were "a disappointment," caused by the sudden recession and the failure of its biggest customer, HomeLife. This year, sales are expected to be flat in the first half and better in the second, averaging out to a 5% to 8% gain. Earnings are projected at $2.30 to $2.60 per share before restructuring and unusual charges, up from $1.76 before charges in 2001 and approaching the $2.63 posted in 2000.
In the first quarter, sales are projected at $56 million to $58 million with earnings of 47 cents to 52 cents per share before restructuring charges. Charges as the West End plant is phased out and production is consolidated are estimated at 38 cents to 56 cents per share, mainly in the first quarter.
"We still believe very strongly in our strategy," Prillaman said. "We're in the right market segment as an all-wood resource in the upper midpriced range."
He said Stanley will remain a domestic producer but will source about 10% of its product offshore this year, rising to perhaps 30% in two or three years. Imports will play a role at the April market, when the company will offer about a third more new product than normal to feed into the expected second-half sales improvement.
"China gives us some design flexibility we haven't had before at good values," said Prillaman. April introductions will be within Stanley's usual price points "but the value will go way up," he said.
| Quarter ended 12/31 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | $56,350,000 | $68,561,000 | (17.8%) |
| Operating income | 3,938,000 | 7,704,000 | (48.9%) |
| Net income | (a)184,000 | 4,313,000 | (95.7%) |
| Earnings per share | 0.03 | 0.61 | (95.1%) |
| Year ended 12/31 | 2001 | 2000 | Change |
| Sales | $234,322,000 | $283,092,000 | (17.2%) |
| Operating income | 22,484,000 | 34,937,000 | (35.6%) |
| Net income | (a)8,321,000 | 19,540,000 | (57.4%) |
| Earnings per share | 1.21 | 2.63 | (54.0%) |
| (a) Includes a $2 million net restructuring charge in both periods. The 2001 year also includes a $1.8 million net charge for the writeoff of receivables due from a major customer. | |||
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