Stanley sales dip 10.8% but profit jumps in 2Q

Larry Thomas -- Furniture Today, July 23, 2012

STANLEYTOWN, Va. - Stanley Furniture said second-quarter sales fell 10.8%, but the company reported a profit of $36.9 million due to an influx of cash received as a result of a long-running antidumping case against Chinese produced wood bedroom furniture.
     The company also said it cut its operating loss, not including restructuring charges, for the sixth consecutive quarter.
     Sales for the quarter ended June 30 totaled $24.4 million, down from $27.4 million in last year's second quarter.
     Net income was $36.9 million or $2.54 per share, a figure that included $39.4 million in antidumping duties.
    In last year's second quarter, Stanley had a net loss of $595,000 or 4 cents per share, which included $1.12 million in antidumping duties.
     "We are very pleased with the ability we have demonstrated to manage our cost structure and reduce our operating losses on lower sales volume," said Glenn Prillaman, president and CEO. He said sales of the Stanley brand are about even with the same quarter last year, while the Young America youth furniture line "remains in transition until later this year."
     "New product designs (from Young America) should be on retail floors before the end of the year. We believe that the completion of these efforts paired with continual operational improvements will result in a product of significantly greater value in the marketplace boosting sales," he said. "In the meantime, we recognize we are sacrificing immediate sales in order to position the Young America brand and its supporting retailers to compete with price-driven, imported product in the long term."
    He said the company continues to strengthen the in-stock position of the Stanley brand as it works with its offshore vendors.
     "According to our retailers, the value of our Stanley product offerings has noticeably increased since this time last year," Prillaman said. "Our plan for the Stanley line is working as profits continue to grow."
     For the six months ended June 30, sales totaled $51.2 million, down 5.1% from $54 million in the first six month of 2011.
     Six-month net income totaled $35.3 million, or $2.44 per share. That compares with a net loss of $4.52 million or 32 cents per share in the first half of last year.
     Prillaman said the company is projecting a slight increase in sales in the third quarter, and expects to further reduce its operating loss.
     The company also said its board of directors has authorized the purchase of up to $5 million of its common stock.