8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) April 17, 2007

STANLEY FURNITURE COMPANY, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-14938	54-1272589
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1641 Fairystone Park Highway, Stanleytown, Virginia  24168

              (Address of principal executive offices)     (Zip Code)

Registrant’s telephone number, including area code: (276) 627-2000

 N/A

 (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition

On April17, 2007, the Registrant issued a press release announcing first quarter 2007 operating results. The press release is furnished as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

ITEM 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On January 26, 2007, the registrant entered into an Amended and Restated Note Purchase and Private Shelf Agreement (the “Amended Note Agreement”) with The Prudential Insurance Company of America (“Prudential”), Hartford Life Insurance Company, Medica Health Plans, Pruco Life Insurance Company of New Jersey, Prudential Retirement Insurance and Annuity Company, Mutual of Omaha Insurance Company and each Prudential affiliate which becomes a purchaser as provided therein. Pursuant to the Amended Note Agreement, the registrant borrowed $25 million in a private note placement on April 17, 2007. The note bears interest at 6.73% per annum and is payable in seven equal annual principal payments starting in May 2011 with a final payment due in May 2017. Proceeds from the loan will be used for general corporate purposes including the registrant’s stock repurchase program. The Amended Note Agreement also provides for a $25 million uncommitted shelf facility and amends and restates the registrant’s note purchase and private shelf agreement with Prudential which was entered into in 1999. The Amended Note Agreement provides that the notes issued thereunder may be accelerated if there is an event of default (as defined in the Amended Note Agreement).

The foregoing summary is qualified in its entirety by reference to the Amended Note Agreement, a copy of which is incorporated by reference as Exhibit 4.01 to this report.

ITEM 9.01 Financial Statements and Exhibits.

(d)  Exhibits.

4.01Amended and Restated Note Purchase and Private Shelf Agreement dated as of January 26, 2007, among the Registrant, the Prudential Insurance Company of America, the other purchasers named therein and each Prudential affiliate which became a purchaser as provided therein (incorporated by reference to Exhibit 4.01 to the Registrant’s Form 8-K filed on February 1, 2007).

99.1    Press release by Stanley Furniture Company, Inc. on April 17, 2007

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	STANLEY FURNITURE COMPANY, INC.
April 17, 2007	By: /s/Jeffrey R. Scheffer
Date	Jeffrey R. Scheffer
	Chairman, President and Chief Executive Officer

EX-99.1

                   EXHIBIT 99.1

FOR IMMEDIATE RELEASE:	CONTACT:	DOUGLAS I. PAYNE
April 17, 2007		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

FIRST QUARTER 2007 OPERATING RESULTS

STANLEYTOWN, VA, April 17, 2007/Businesswire/ -- Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY) today reported sales and earnings for the first quarter of 2007. Earnings were within management’s guidance range provided in January 2007.

Net sales of $75.1 million decreased 10.1% from the first quarter of 2006. Earnings per share of $.15 compares to $.43 in the year-ago quarter. Both sales and earnings were at record levels in the first quarter of last year.

Operating income declined to $3.1 million, or 4.1% of net sales, in the first quarter of 2007 from $8.6 million, or 10.3% of net sales, in the first quarter of 2006. Lower margins resulted from lower sales and production levels, operating inefficiencies and higher raw material and compensation costs. These factors were partially offset by lower performance based compensation expense due to lower earnings.

Cash flow from operations together with cash on hand was used to repurchase 335,731 shares of the Company’s common stock for $7.3 million and pay cash dividends of $1.1 million in the first quarter of 2007. Working capital, excluding cash and current maturities of long-term debt, decreased $1.8 million during the first quarter of 2007 primarily due to a reduction in inventories. Approximately $25.3 million is currently authorized by the Company’s Board of Directors to repurchase shares of the Company’s common stock.

Business Outlook

“Our business has stabilized over the past few months and we experienced little change in overall sales trends since late last year”, commented Jeffrey R. Scheffer, President and Chief Executive Officer. “While we are disappointed with lower sales and earnings, we believe this is consistent with current industry-wide conditions.”

“Near term, we will continue to focus on controlling costs and inventories, and improving our product offerings. Longer term, we remain focused on reducing costs, eliminating waste, and improving productivity, quality, and service through our continuous improvement efforts applying lean business principles,” concluded Scheffer.

Management offers the following guidance. This guidance excludes any potential receipt of funds under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”) involving tariffs collected by the U.S. government on wooden bedroom furniture imported from China. As previously announced, the Company anticipates recording a charge to earnings ($6.0 million to $6.5 million, pre-tax) upon final termination of the Company’s defined benefit pension plan in the second quarter of 2007.

Total year 2007 guidance:

·   Net sales are expected to be in the range of $300 million to $315 million, compared to $307.6 million in 2006.

·   Operating income is expected to be in the range of $18.5 million to $21.0 million (excluding a pre-tax charge to earnings of $6.0 million to $6.5 million for the pension plan termination).

·   Earnings per share are expected to be in the range of $1.00 to $1.15 (excluding a charge to earnings of $.37 to $.40 for the pension plan termination) compared to $1.17 for 2006, excluding income from CDSOA.

Second quarter ending June 30, 2007 guidance:

·   Net sales are expected to be in the range of $69 million to $73 million, compared to sales of $77.5 million in the second quarter of 2006.

·   Operating income is expected to be in the range of $3.8 million to $4.4 million (excluding a pre-tax charge to earnings of $6.0 million to $6.5 million for the pension plan termination).

·   Earnings per share are expected to be in the range of $.19 to $.23 (excluding a charge to earnings of $.37 to $.40 for the pension plan termination) compared to $.32 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 Wednesday morning, April 18, 2007 at 9:00 a.m. 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 April 26, 2007) is (877) 660-6853, the account reference number is 275 and the conference number is 234375.

Forward-Looking Statements

Certain statements made in this report 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 our 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 the cyclical nature of the furniture industry, competition in the furniture industry including competition from lower-cost foreign manufacturers, disruptions in offshore sourcing including those arising from supply or distribution disruptions or those arising from changes in political, economic and social conditions, as well as laws and regulations, in China or other countries from which we source products, international trade policies of the United States and countries from which we source products, manufacturing realignment, the inability to obtain sufficient quantities of quality raw materials in a timely manner, business failures or loss of large customers, the inability to raise prices in response to inflation and increasing costs, failure to anticipate or respond to changes to consumer tastes and fashions in a timely manner, environmental compliance costs and extended business interruption at manufacturing facilities.

Any forward-looking statement speaks only as of the date of this press release, and we undertake 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
	March 31,			April 1,
	2007			2006
Net sales	$	75,108		$	83,524
Cost of sales		61,614			63,766
Gross profit		13,494			19,758
Selling, general and administrative expenses		10,415			11,128
Operating income		3,079			8,630
Other income (expense), net		(68	)		93
Interest income		27			110
Interest expense		517			524
Income before income taxes		2,521			8,309
Income taxes		845			2,917
Net income	$	1,676		$	5,392
Diluted earnings per share	$	0.15		$	0.43
Weighted average number of shares		10,994			12,567

STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
	March 31,		April 1,		Dec 31,
	2007		2006		2006
Assets
Current assets:
Cash	$	2,332	$	21,918	$	6,269
Accounts receivable, net		35,314		40,234		32,260
Inventories		56,267		65,117		59,364
Prepaid expenses and other current assets		925		957		2,085
Deferred income taxes		3,817		2,482		3,928
Total current assets		98,655		130,708		103,906
Property, plant and equipment, net		48,571		49,511		49,159
Goodwill		9,072		9,072		9,072
Other assets		223		6,984		541
Total assets	$	156,521	$	196,275	$	162,678
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt	$	2,857	$	2,857	$	2,857
Accounts payable		17,053		16,463		17,789
Accrued expenses		12,431		14,778		11,224
Total current liabilities		32,341		34,098		31,870
Long-term debt		5,714		8,571		5,714
Deferred income taxes		7,257		9,974		7,422
Other long-term liabilities		7,976		6,793		8,025
Stockholders' equity		103,233		136,839		109,647
Total liabilities and stockholders' equity	$	156,521	$	196,275	$	162,678

STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
	Three Months Ended
	March 31,			April 1,
	2007			2006
Cash flows from operating activities:
Cash received from customers	$	72,016		$	80,251
Cash paid to suppliers and employees		(66,003	)		(68,651	)
Interest received		16			110
Income taxes paid, net		(511	)		(495	)
Net cash provided by operating activities		5,518			11,215
Cash flows from investing activities:
Capital expenditures		(1,126	)		(216	)
Other, net					(17)
Net cash used by investing activities		(1,126	)		(233	)
Cash flows from financing activities:
Purchase and retirement of common stock		(7,252	)		(1,252	)
Dividends paid		(1,077	)		(982	)
Tax benefit from exercise of stock options					161
Proceeds from exercise of stock options					453
Net cash used by financing activities		(8,329	)		(1,620	)
Net increase (decrease) in cash		(3,937	)		9,362
Cash at beginning of period		6,269			12,556
Cash at end of period	$	2,332		$	21,918
Reconciliation of net income to
net cash provided by operating activities:
Net income	$	1,676		$	5,392
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization		1,532			1,464
Deferred income taxes		(55	)		(210	)
Stock-based compensation		114			72
Tax benefit from exercise of stock options					(161	)
Other		194			6
Changes in working capital		1,755			4,379
Other assets		351			312
Other long-term liabilities		(49	)		(39	)
Net cash provided by operating activities	$	5,518		$	11,215