Stanley 4Q sales increase 12.3%
By Furniture Today Staff -- Furniture Today, February 3, 2003
Stanleytown, Va. — A 12.3% increase to $63.3 million in fourth-quarter sales helped drive improved 2002 performance at case goods maker Stanley Furniture, which will pay shareholders cash dividends for the first time.
For the year, sales were up 2.2% to $239.5 million compared to $234.3 million in 2001. Net income in the fourth quarter was up more than 20-fold to almost $4 million, and up 51.1% for the year to $12.6 million.
Although last year's fourth quarter offered weak comparisons, Stanley Chairman Albert Prillaman was pleased with both quarterly and year-end results. "It came in a little better than we thought it would," he said.
Cost savings from the closing in late 2001 of its West End, N.C., plant, increased offshore sourcing and lower raw materials costs helped 2002 performance, he said.
"Year-end orders were up 4%, so we entered the new year with some momentum," Prillaman said.
Stanley's board set an initial quarterly dividend of 5 cents per share, payable March 3 to shareholders of record Feb. 14. Prillaman said the move demonstrates the company's confidence in its strategy, growth opportunities and financial strength.
"We also thought it was time to put some money back into our shareholders' pockets," he said.
Jeff Scheffer, president and chief executive officer, reported progress on the blending of domestic production with imported components and some full pieces. "Quality actually improved over 2001, and service remained constant, with average shipping time at 12 days," he said.
Stanley anticipates imports will account for about 20% of 2003 sales, compared to less than 10% in 2002. "We're in the midst of a pretty aggressive ramping-up" of imports, Scheffer said.
Increased costs in terms of product development, marketing and travel related to offshore sourcing will be felt this year, but import values should improve Stanley's bottom line. "We're going to see our selling, general and administrative costs inch up as a percentage of sales, but we'll more than make up for that in gross margin," Prillaman said.
Stanley's 2002 capital expenditures were low, about $1 million, but domestic plants remain dominant contributors of product. "Our domestic factories remain as well-equipped or better than others," Prillaman said, adding that existing plants benefited from the transfer of modern equipment from the closed West End factory.
Looking ahead, Scheffer anticipates a generally flat first quarter, with sales between $58 million and $61 million. For all of 2003, sales should be in the $242 million to $252 million range, he said.
| Stanley Furniture | |||
|---|---|---|---|
| Earnings per share are fully diluted | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) Includes pretax restructuring and related charges of $3 million in both 2001 periods. The 2001 quarter also includes a $204,000 income tax benefit and the 2001 year also includes a $2.8 million pretax charge for the write-off of receivables due to the liquidation of a former customer. (b) Based on average shares outstanding of 6.7 million in the 2002 quarter, 6.8 million in the 2002 year and 6.9 million in the 2001 periods. (c) Includes a $3.5 million pretax charge for restructuring and related charges. | |||
| Sales | $63,305,000 | $56,350,000 | 12.3% |
| Operating income | 6,815,000 | 3,938,000 | 73.1% |
| Net income | 3,950,000 | (a)184,000 | 2046.7% |
| Earnings per share (b) | 0.59 | 0.03 | 1866.7% |
| Year ended 12/31 | 2002 | 2001 | Change |
| Sales | $239,485,000 | $234,322,000 | 2.2% |
| Operating income | 25,909,000 | 22,484,000 | 15.2% |
| Net income | (c)12,571,000 | (a)8,321,000 | 51.1% |
| Earnings per share | 1.85 | 1.21 | 52.9% |
