Stanley Furniture trims loss in third quarter

Larry Thomas -- Furniture Today, October 20, 2011

STANLEYTOWN, Va. — Case goods manufacturer and importer Stanley Furniture significantly reduced its net loss in the third quarter as it continued to benefit from operational improvements implemented during the past year.

The company reported a net loss of $1.69 million, or 12 cents per share, in the quarter ended Oct. 1. In last year's third quarter, the loss totaled $4.93 million, or 48 cents per share.

Sales in the most recent quarter were $26.1 million, down 25.3% from $34.9 million in the same quarter last year.

"We are clearly operating in a difficult retail environment," said Glenn Prillaman, president and CEO, "but our efforts to continue improving operations independent of sales are encouraging. We enter the fourth quarter with our strongest product offering and in the best service position since our restructuring plan began at the end of 2010. This should result in continued backlog reduction during the remainder of 2011, bolstering confidence with our customers."

He said the most recent quarter's net loss also was an improvement over the second quarter, when the company lost $2 million, not including income from the Continued Dumping and Subsidy Offset Act and a restructuring credit.

The third quarter's gross margin of 14.7% was 2.4 percentage points above the second-quarter figure.

"The gross margin improvement in the third quarter came primarily from improvements related to the modernization efforts underway in our factory in Robbinsville, N.C.," said Micah Goldstein, chief operating officer and chief financial officer. "We made significant progress on our path to becoming a profitable and efficient domestic manufacturer during the quarter."

As part of its restructuring, Stanley shifted production of its Young America youth furniture line to the plant, and moved adult furniture production offshore.

For the nine months ended Oct. 1, the net loss totaled $6.2 million or 43 cents per share. That's down from a loss of $35.5 million or $3.43 per share in the first nine months of 2010. Last year's figure included a goodwill impairment charge of $9.07 million.

Nine-month sales totaled $80 million, down 26.8% from $109.3 million in the first nine months of 2010.