EX-99 2 ex9911q05.txt Exhibit 99.1 FOR IMMEDIATE RELEASE: CONTACT: DOUGLAS I. PAYNE April 25, 2005 Executive Vice President - Finance and Administration (276) 627-2157 e-mail:dpayne@stanleyfurniture.com ANITA W. WIMMER Vice President - Controller and Treasurer (276) 627-2446 e-mail:awimmer@stanleyfurniture.com STANLEY FURNITURE ANNOUNCES RECORD SALES AND EARNINGS FOR THE FIRST QUARTER OF 2005 Earnings per share increase 21% on sales gain of 16% STANLEYTOWN, VA, April 25, 2005/PRNewswire/ -- Stanley Furniture Company, Inc. (Nasdaq-NNM:STLY) today reported record sales and earnings for the first quarter of 2005. Both sales and earnings modestly exceeded the high end of management's previous guidance provided in early February 2005. Net sales of $83.0 million increased 16.0% and earnings per share grew 21.1% to $.86 from the first quarter of last year. This marks the twelfth consecutive quarter of sales growth and the sixth consecutive quarter of double digit sales gains over the comparable prior year quarter. Operating income rose to $9.4 million, or 11.3% of net sales, in the first quarter of 2005 from $7.8 million, or 10.9% of net sales, in the first quarter of 2004. Higher sales, increased production levels at the Company's domestic facilities, although at a slower growth rate than sales due to the expansion of sourced items, and operating efficiencies drove the improvement. These improvements were partially offset by inflation in raw materials, compensation costs, energy and freight costs, increased warehouse expense and tariffs imposed on wooden bedroom furniture imported from China. Strong cash flow in the first quarter was used to purchase $1.9 million of the Company's common stock, pay cash dividends of $778,000 and increase the Company's cash on hand $9.6 million. Approximately $8.3 million remains authorized by the Company's Board of Directors to repurchase shares of the Company's common stock. At April 2, 2005, the Company was in a net cash position with total debt outstanding of $15.7 million and cash on hand of $17.3 million. Business Outlook "We are pleased to report another quarter of significant progress," commented Jeffrey R. Scheffer, president and chief executive officer. For the most recent four quarters our sales have increased 15.6% from the previous four quarter period. "We believe market share gains are driving our sales growth. 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. Combining this with our culture and reputation for high quality and fast delivery differentiates us from our competition. We enter the second quarter with considerable momentum and anticipate 2005 to be another good year." Management offers the following guidance for total year 2005. o Net sales are expected to be in the range of $330 million to $340 million, an increase of 8% to 11% over the prior year. o Operating income is expected to be in the range of $37.8 million to $38.8 million. o The Company's effective tax rate is expected to be in the range of 35.5% to 36.0% in 2005. o Earnings per share are expected to be in the range of $3.45 to $3.55 compared to $3.17 for 2004. Management offers the following guidance for the quarter ending July 2, 2005. o Net sales are expected to be in the range of $79.0 million to $81.5 million, an increase of 9% to 13% over the second quarter of 2004. o Operating income is expected to be in the range of $8.4 million to $9.0 million. o Earnings per share are expected to be in the range of $.76 to $.81 compared to record earnings of $.80 per share in the year-ago quarter. Other Information All earnings per share amounts are on a diluted basis. Established in 1924, Stanley Furniture Company, Inc. is a leading manufacturer of wood furniture targeted at the upper-medium price range of the residential market. Manufacturing facilities are located in Stanleytown and Martinsville, Va. and Robbinsville and Lexington, N.C. Its common stock is traded on the Nasdaq stock market under the symbol STLY. Conference Call Details The Company will host a conference call Tuesday morning, April 26, at 9:00 Eastern Time. The dial-in-number is (877) 407-8029. The call will also be web cast and archived on the Company's web site at www.stanleyfurniture.com. The dial-in-number for the replay (available through May 2, 2005) is (877) 660-6853, the account reference number is 275 and the conference number is 146014. Forward-Looking Statements Certain statements made in this release are not based on historical facts, but are forward-looking statements. These statements can be identified by the use of forward-looking terminology such as "believes," "estimates," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These statements reflect the Company's reasonable judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include competition in the furniture industry including competition from lower-cost foreign manufacturers, the Company's success in executing its blended strategy of combining offshore sourcing and domestic manufacturing, disruptions in offshore sourcing including those arising from supply or distribution disruptions or changes in political or economic conditions affecting the countries from which the Company obtains offshore sourcing, international trade policies of the United States and countries from which the Company obtains offshore sourcing, the cyclical nature of the furniture industry, fluctuations in the price for lumber which is the most significant raw material used by the Company, fluctuations in foreign freight cost, credit exposure to customers, capital costs and general economic conditions. Any forward-looking statement speaks only as of the date of this press release, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise. TABLES FOLLOW
STANLEY FURNITURE COMPANY, INC. Consolidated Operating Results (in thousands, except per share data) (unaudited) Three Months Ended April 2, Mar 27, 2005 2004 ------- ------- Net sales ............................................ $82,950 $71,520 Cost of sales ........................................ 62,485 54,299 ------- ------- Gross profit ..................................... 20,465 17,221 Selling, general and administrative expenses ......... 11,051 9,417 ------- ------- Operating income ................................... 9,414 7,804 Other income, net .................................... 65 53 Interest income ...................................... 51 6 Interest expense ..................................... 569 632 ------- ------- Income before income taxes.......................... 8,961 7,231 Income taxes ......................................... 3,201 2,624 ------- ------- Net income........................................... $ 5,760 $ 4,607 ======= ======= Diluted earnings per share ........................... $ 0.86 $ 0.71 ======= ======= Weighted average number of shares .................... 6,700 6,449 ======= =======
STANLEY FURNITURE COMPANY, INC. Consolidated Condensed Balance Sheets (in thousands) (unaudited) April 2, Mar 27, Dec 31, 2005 2004 2004 -------- -------- -------- Assets Current assets: Cash ......................................... $ 17,272 $ 5,351 $ 7,632 Accounts receivable, net ..................... 40,599 36,141 36,036 Inventories .................................. 71,678 56,341 73,658 Prepaid expenses and other current assets .... 955 1,105 1,585 Deferred income taxes ........................ 2,409 2,855 2,414 -------- -------- -------- Total current assets ..................... 132,913 101,793 121,325 Property, plant and equipment, net ................ 51,155 53,804 51,342 Goodwill .......................................... 9,072 9,072 9,072 Other assets ...................................... 6,701 6,836 7,149 -------- -------- -------- Total assets ............................. $199,841 $171,505 $188,888 ======== ======== ======== Liabilities and Stockholders' Equity Current liabilities: Current maturities of long-term debt ......... $ 4,257 $ 2,728 4,257 Accounts payable ............................. 17,292 15,069 16,056 Accrued expenses ............................. 14,856 13,470 12,445 -------- -------- -------- Total current liabilities ................ 36,405 31,267 32,758 Long-term debt .................................... 11,428 15,686 11,428 Deferred income taxes ............................. 10,488 11,386 10,742 Other long-term liabilities ....................... 6,667 6,029 6,695 Stockholders' equity .............................. 134,853 107,137 127,265 -------- -------- -------- Total liabilities and stockholders' equity $199,841 $171,505 $188,888 ======== ======== ========
STANLEY FURNITURE COMPANY, INC. Consolidated Condensed Statements of Cash Flows (in thousands) (unaudited) Three Months Ended April 2, Mar 27, 2005 2004 -------- -------- Cash flows from operating activities: Cash received from customers ....................... $ 78,365 $ 65,556 Cash paid to suppliers and employees ............... (67,967) (57,613) Interest received (paid), net ...................... 45 (160) Income taxes paid, net ............................. (269) (250) -------- -------- Net cash provided by operating activities ........ 10,174 7,533 -------- -------- Cash flows from investing activities: Capital expenditures ............................... (1,196) (44) Other, net ......................................... (6) (88) -------- -------- Net cash used by investing activities ............ (1,202) (132) -------- -------- Cash flows from financing activities: Repayment of senior notes .......................... (4,286) Purchase and retirement of common stock ............ (1,868) Dividends paid ..................................... (778) (622) Proceeds from exercise of stock options ............ 3,314 349 -------- -------- Net cash provided (used) by financing activities . 668 (4,559) -------- -------- Net increase in cash ................................ 9,640 2,842 Cash at beginning of period .......................... 7,632 2,509 -------- -------- Cash at end of period .............................. $ 17,272 $ 5,351 ======== ======== Reconciliation of net income to net cash provided by operating activities: Net income ....................................... $ 5,760 $ 4,607 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................. 1,402 1,421 Deferred income taxes .......................... (249) (1,174) Changes in working capital ..................... 2,836 1,284 Other assets ................................... 453 243 Other long-term liabilities .................... (28) 1,152 -------- -------- Net cash provided by operating activities .......... $ 10,174 $ 7,533 ======== ========