Stanley posts $19.1M loss
By Larry Thomas -- Furniture Today, May 17, 2010
STANLEYTOWN, Va. —
Case goods major Stanley Furniture reported a first-quarter loss of $19.1 million and said sales were 8.1% below last year's first quarter.
The most recent quarterly loss, which equals $1.85 per share, is well above the loss in last year's first quarter, when the company lost $2.4 million or 23 cents per share.
The company said the wider loss was due to a $9.1 million goodwill impairment charge, as well as manufacturing inefficiencies and the increased costs of transitioning about one-third of its Young America youth furniture line from Asian to domestic production.
“Obviously, we are disappointed with our recent operating results,” said Glenn Prillaman, president and CEO. “Due to the depth and length of the recession and the continued sluggishness of the housing market, many of our end consumers simply are not in the marketplace for premium residential wood furniture.”
In an effort to return the company to profitability, Prillaman said Stanley is shutting down its flagship Stanleytown factory and moving most of its adult furniture production to Asian factories “with whom it has existing working relationships.” (See story on page 1.)
The company said it expects to record restructuring expenses of $12 million to $15 million during the remainder of the year.
Prillaman said Stanley has renegotiated the terms of its long-term debt to allow it to pay down the notes with no prepayment penalty. Several financial covenants also were relaxed through the first quarter of 2011 to accommodate the restructuring plan and the anticipated losses while it is being implemented.
Stanley Furniture
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 4/3 | 2010 | 2009 | Change |
| (a) Includes goodwill impairment charge of $9.1 million in the 2010 quarter. Also includes income tax expense of $451,000 in the 2010 quarter and income tax benefit of $1.6 million in the 2009 quarter. |
|||
| Sales | $36,524,000 | $39,764,000 | (8.1%) |
| Operating income | (8,509,000) | (3,075,000) | — |
| Net income (a) | (19,073,000) | (2,376,000) | — |
| Earnings per share | (1.85) | (0.23) | — |
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Stanley Furniture reports $19.1 million loss in 1Q
May 13, 2010
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