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Stanley sales spike 15.3%, EPS surges 35.5% in 2004

By Jay McIntosh -- Furniture Today, February 13, 2005

Stanleytown, Va. — A busy fourth quarter contributed to a strong 2004 for case goods maker Stanley Furniture, with sales and earnings per share for the year up 15.3% and 35.5%, respectively.

The company beat Wall Street estimates in the fourth quarter with a 28.3% earnings gain to $5.7 million or 86 cents per share. Reuters Estimates said analysts were expecting 82 cents.

Sales for the year topped $300 million for the first time, reaching $305.8 million. Earnings came to $20.8 million.

President and CEO Jeff Scheffer said Stanley is doing well in its upper-medium price niche with a strategy focused on good quality and quick shipment. Imports accounted for 28% of sales last year, up from 20% in 2003, although he doubts the percentage will increase much further.

"While industry sales trends improved in 2004, we believe market share gains are driving most of our sales growth," Scheffer said. "Blending efficient domestic manufacturing in our highly focused facilities with intelligent outsourcing of certain component parts and finished goods has allowed us to improve the styling and value of our products."

Stanley Chairman Albert Prillaman said of 2004: "I think it's the best year we've ever had given the competitive environment, the economic environment, and particularly considering what's going on with the globalization of the furniture industry." He added that global sourcing is difficult to manage but it's "something we just have to stay on top of."

For 2005, the company is projecting sales in the $321 million to $331 million range and earnings per share of $3.45 to $3.55. In the first quarter, it looks for sales of $79 million to $81.5 million and EPS of 78 to 83 cents.

Stanley said its strong cash flow in 2004 enabled it to pay down debt by $7 million, pay stockholders dividends of $2.5 million, and add $5.1 million to cash on hand.

The company's board voted last week to increase the quarterly dividend by 20%, from 10 cents to 12 cents.

Scheffer said last year's business slowed after Labor Day but picked up again after the November elections, allowing the company to enter 2005 with some momentum.

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