10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2013

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to.

Commission file number: 0-14938

STANLEY FURNITURE COMPANY, INC.

(Exact name of registrant as specified in its charter)

Delaware	54-1272589
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

200 North Hamilton Street, High Point, North Carolina, 27260
(Address of principal executive offices, Zip Code)

336-884-7701

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes (x) No ( )

            Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes (X) No ( )

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act, (check one):

Large accelerated filer ¨		Accelerated filer                       ¨
Non-accelerated filer   x		Smaller reporting company  ¨
	(Do not check if a smaller reporting company)

            Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ( ) No (x)

As of October 9, 2013, 14,509,119 shares of common stock of Stanley Furniture Company, Inc., par value $.02 per share, were outstanding.

PART I.  FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

STANLEY FURNITURE COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	September 28,		December 31,
	2013		2012
ASSETS
Current assets:
Cash and equivalents	$	10,916	$	10,930
Restricted cash		1,737		1,737
Short-term investments		10,000		25,000
Accounts receivable, less allowances of $783 and $654		13,699		10,028
Inventories:
Finished goods		28,224		30,980
Work-in-process		1,651		1,845
Raw materials		1,791		2,235
Total inventories		31,666		35,060
Prepaid and other current assets		4,307		3,438
Deferred taxes		622		962
Total current assets		72,947		87,155
Property, plant and equipment, net		21,184		19,870
Other assets		6,398		3,691
Total assets	$	100,529	$	110,716
LIABILITIES
Current liabilities:
Accounts payable	$	6,811	$	8,667
Accrued salaries, wages and benefits		4,295		3,826
Other accrued expenses		2,306		2,421
Total current liabilities		13,412		14,914
Deferred income taxes		622		962
Other long-term liabilities		7,108		7,601
Total liabilities		21,142		23,477
STOCKHOLDERS’ EQUITY
Common stock, $.02 par value, 25,000,000 shares authorized,14,509,119 and 14,566,099 shares issued and outstanding.		282		284
Capital in excess of par value		15,361		15,018
Retained earnings		64,328		72,421
Accumulated other comprehensive loss		(584)		(484)
Total stockholders’ equity		79,387		87,239
Total liabilities and stockholders’ equity	$	100,529	$	110,716
The accompanying notes are an integral part of the consolidated financial statements.

2

STANLEY FURNITURE COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 (in thousands, except per share data)

(unaudited)

	Three Months Ended				Nine Months Ended
	September 28, 2013		September 29,  2012		September 28, 2013		September 29, 2012
Net sales	$	23,982	$	23,977	$	74,200	$	75,186
Cost of sales		21,203		20,632		65,856		65,166
Gross profit		2,779		3,345		8,344		10,020
Selling, general, and administrative expenses		4,711		4,634		14,676		13,699
Operating loss		(1,932)		(1,289)		(6,332)		(3,679)
Income from Continued Dumping and Subsidy Offset Act,net		-		53		-		39,414
Other income, net		33		23		51		64
Interest income		17		26		60		51
Interest expense		715		640		2,015		1,761
(Loss) income before taxes		(2,597)		(1,827)		(8,236)		34,089
Income tax (benefit) expense		(127)		77		(143)		697
Net (loss) income	$	(2,470)	$	(1,904)	$	(8,093)	$	33,392
(Loss) income per share:
Basic	$	(.17)	$	(.13)	$	(.57)	$	2.33
Diluted	$	(.17)	$	(.13)	$	(.57)	$	2.30
Weighted average shares outstanding:
Basic		14,136		14,345		14,145		14,345
Diluted		14,136		14,345		14,145		14,487

The accompanying notes are an integral part of the consolidated financial statements.

3

STANLEY FURNITURE COMPANY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended				Nine Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
Net (loss) income	$	(2,470)	$	(1,904)	$	(8,093)	$	33,392
Other comprehensive loss:
Amortization of prior service benefit		(42)		(44)		(126)		(133)
Amortization of actuarial loss		8		10		25		24
Adjustments to net periodic benefit cost		(34)		(34)		(101)		(109)
Comprehensive (loss) income	$	(2,504)	$	(1,938)	$	(8,194)	$	33,283

The accompanying notes are an integral part of the consolidated financial statements.

4

STANLEY FURNITURE COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	September 28, 2013		September 29, 2012
Cash flows from operating activities:
Cash received from customers	$	70,545	$	73,503
Cash paid to suppliers and employees		(79,816)		(79,818)
Cash from Continued Dumping and Subsidy Offset Act		-		39,909
Interest paid, net		(2,514)		(2,246)
Income taxes paid, net		(156)		(748)
Net cash (used) provided by operating activities		(11,941)		30,600
Cash flows from investing activities:
Sale of short-term securities		15,000		-
Purchase of short-term securities		-		(20,000)
Restricted cash increase		-		(150)
Capital expenditures		(2,881)		(3,226)
Purchase of other assets		(2,189)		(2,007)
Proceeds from sale of assets		-		55
Net cash provided (used) by investing activities		9,930		(25,328)
Cash flows from financing activities:
Purchase and retirement of common stock		(358)		-
Proceeds from insurance policy loans		2,416		2,283
Proceeds from exercise of stock options		38		-
Capital lease payments		(99)		(99)
Net cash provided by financing activities		1,997		2,184
Net (decrease) increase in cash and equivalents		(14)		7,456
Cash and equivalents at beginning of period		10,930		15,700
Cash and equivalents at end of period	$	10,916	$	23,156
Reconciliation of net (loss) income to net cash (used) provided by operating activities:
Net (loss) income	$	(8,093)	$	33,392
Depreciation and amortization		1,587		1,320
Stock-based compensation		661		589
Gain on disposal of assets		-		(50)
Changes in assets and liabilities:
Accounts receivable		(3,671)		(1,619)
Inventories		3,394		(401)
Prepaid expenses and other current assets		(3,428)		(2,181)
Accounts payable		(1,692)		(1,502)
Accrued salaries, wages and benefits		596		475
Other accrued expenses		(342)		496
Other assets		(559)		(492)
Other long-term liabilities		(394)		573
Net cash (used) provided by operating activities	$	(11,941)	$	30,600

The accompanying notes are an integral part of the consolidated financial statements.

5

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data)
(unaudited)

1.         Preparation of Interim Unaudited Consolidated Financial Statements

The consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).  In our opinion, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein.  All such adjustments are of a normal recurring nature.  Certain information and footnote disclosures prepared in accordance with generally accepted accounting principles have been either condensed or omitted pursuant to SEC rules and regulations.  However, we believe that the disclosures made are adequate for a fair presentation of results of operations and financial position.  Operating results for the interim periods reported herein may not be indicative of the results expected for the year.  We suggest that these consolidated financial statements be read in conjunction with the consolidated financial statements and accompanying notes included in our latest Annual Report on Form 10-K.

A correction of an immaterial presentation error was made in the Consolidated Statements of Comprehensive Income for the prior year three and nine month periods. 

2.         Property, Plant and Equipment

	September 28, 2013		December 31, 2012
Land, buildings and leasehold improvements	$	16,276	$	14,049
Machinery and equipment		29,027		28,406
Office furniture and equipment		1,000		1,000
Construction in process		392		522
Property, plant and equipment, at cost		46,695		43,977
Less accumulated depreciation		25,511		24,107
Property, plant and equipment, net	$	21,184	$	19,870

3.         Income taxes

During the nine months of 2013, we recorded a non-cash charge to our valuation allowance of $3.6 million, increasing our valuation allowance against deferred tax assets to $7.2 million at September 28, 2013.  The primary assets covered by this valuation allowance are net operating losses. The valuation allowance was calculated in accordance with the provisions of ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence when measuring the need for a valuation allowance.  Our results over the most recent three-year period were heavily affected by our business restructuring activities. Our cumulative operating loss in the most recent three-year period, in our view, represented sufficient negative evidence to require a valuation allowance under the provisions of ASC 740, Income Taxes. We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal. Although realization is not assured, we have concluded that the remaining net deferred tax asset in the amount of $622 will be realized based on the reversal of existing deferred tax liabilities. The amount of the deferred tax assets actually realized, however, could vary if there are differences in the timing or amount of future reversals of existing deferred tax liabilities. Should we determine that we will not be able to realize all or part of our deferred tax asset in the future, an adjustment to the deferred tax asset will be charged to income in the period such determination is made.  The income tax benefit recognized during the three and nine month periods was primarily generated due to the releasing of reserves due to lapse of statute of limitations.

During the nine months of 2012, we utilized $39.4 million of our net operating loss carry forwards against the income recognized by proceeds from the Continued Dumping and Subsidy Offset Act distributed by U.S. Customs and Border Protection in April of 2012. The income tax expense recognized during the three and nine month periods was primarily generated from the federal alternative minimum tax.  The alternative minimum tax limited our ability to offset income generated during the period with net operating loss carry forwards.

The major reconciling items between our effective income tax rate and the federal statutory rate are the changes in our valuation allowance and the cash surrender value on life insurance policies.

6

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.         Employee Benefit Plans

Components of other postretirement benefit cost:

	ThreeMonths Ended				Nine Months Ended
	Sept. 28, 2013		Sept. 29, 2012		Sept. 28, 2013		Sept. 29, 2012
Interest cost	$	23	$	34	$	73	$	99
Amortization of prior service benefit		(42)		(44)		(126)		(133)
Amortization of actuarial loss		8		10		25		24
Net periodic postretirement benefit cost (benefit)	$	(11)	$	-	$	(28)	$	(10)

5.         Stockholders’ Equity

Basic earnings per common share are based upon the weighted average shares outstanding.  Outstanding stock options and restricted stock are treated as potential common stock for purposes of computing diluted earnings per share.  Basic and diluted earnings per share are calculated using the following share data:

	Three Months Ended		Nine Months Ended
	Sept. 28, 2013	Sept. 29, 2012	Sept. 28, 2013	Sept. 29, 2012
Weighted average shares outstanding for basic calculation	14,136	14,345	14,145	14,345
Add: Effect of dilutive stock options and restricted stock	-	-	-	142
Weighted average shares outstanding adjusted for diluted calculation	14,136	14,345	14,145	14,487

During the three and nine month periods ended September 28, 2013, the dilutive effect of outstanding stock options and restricted stock is not recognized since we have a net loss for those periods.  Approximately 2.0 million shares in 2013 were issuable upon the exercise of stock options.  Also, 373,000 shares of restricted stock in 2013 were not included because they were anti-dilutive.  During the three and nine month periods ended September 29, 2012, approximately 1.8 million and 729,000 stock options, respectively, were excluded from the diluted per share calculation as they would be anti-dilutive.  In addition, 205,000 shares of restricted stock were not included in the three month period of 2012 because they were anti-dilutive.

A reconciliation of the activity in Stockholders’ Equity accounts for the first nine months of 2013 is as follows:

							Accumulated Other Comprehensive Loss
			Capital in Excess of Par Value
	Common Stock				Retained Earnings
Balance, December 31, 2012	$	284	$	15,018	$	72,421	$	(484)
Net loss		-		-		(8,093)		-
Stock repurchased		(2)		(356)		-		-
Stock-based compensation		-		661		-		-
Exercise of stock options		-		38		-		-
Adjustment to net periodic benefit cost		-		-		-		(100)
Balance, September 28, 2013	$	282	$	15,361	$	64,328	$	(584)

7

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6.    Restructuring and Related Charges

In 2012, we made the strategic decision to consolidate our corporate office and High Point showroom into a single multi-purpose facility in High Point, North Carolina.  During the current nine month period, we recorded $532 in restructuring charges in selling, general and administrative expenses for severance and relocation costs associated with this move and consolidation.

Restructuring accrual activity for the nine months ending September 28, 2013 was as follows:

	Lease Obligations		Severance and other termination costs		Total
Accrual at January 1, 2013	$	732	$	-	$	732
Charges to expense		-		532		532
Cash payments		(183)		(449)		(632)
Accrual at September 28, 2013	$	549	$	83	$	632

Restructuring accrual activity for the nine months ending September 29, 2012 was as follows:

	Lease Obligations		Severance and other termination costs		Other Cost		Total
Accrual at January 1, 2012	$	499	$	57	$	50	$	606
Charges and adjustments to expense		418		17		(40)		395
Cash payments		(124)		(74)		(10)		(208)
Accrual at September 29, 2012	$	793	$	-	$	-	$	793

The restructuring accrual is classified as “Other accrued expenses”.

ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The following table sets forth the percentage relationship to net sales of certain items included in the Consolidated Statements of Income:

	Three Months Ended		Nine Months Ended
	Sept. 28, 2013	Sept. 29, 2012	Sept. 28, 2013	Sept. 29, 2012
Net sales	100.0%	100.0%	100.0%	100.0%
Cost of sales	88.4	86.0	88.7	86.7
Gross profit	11.6	14.0	11.3	13.3
Selling, general and administrative expenses	19.6	19.3	19.8	18.2
Operating loss	(8.0)	(5.3)	(8.5)	(4.9)
CDSOA income, net	-	.2	-	52.4
Other income, net	.1	.1	.1	.1
Interest expense, net	2.9	2.6	2.6	2.3
(Loss) income before income taxes	(10.8)	(7.6)	(11.1)	45.3
Income tax (benefit) expense	(.5)	.3	(.2)	.9
Net (loss) income	(10.3)%	(7.9)%	(10.9)%	44.4%

8

Net sales for the three month period ended September 28, 2013 were flat to the comparable 2012 period. For the nine month period ended September 28, 2013, net sales decreased $986,000, or 1.3% from the comparable 2012 period. During the three month period, a small decrease in unit volume was partially offset by higher average selling prices attributable to a price increase instituted in the second quarter of this year on the Stanley Furniture product line.  The decrease during the nine month period was primarily due to lower unit volume. 

Gross profit for the current three month period was $2.8 million, or 11.6% of net sales compared to  $3.3 million, or 14.0% of net sales, for the three month period of 2012.  Gross profit for the first nine months of 2013 decreased to $8.3 million, or 11.3% of net sales, from $10.0 million, or 13.3% of net sales, for the comparable nine months of2012.  The comparable prior year nine month period includes restructuring related charges associated with the consolidation of our Virginia warehousing operations of $474,000.  The reduction in gross profit for the current three and nine month periods was driven by inflation and discounting on the Stanley Furniture product line and higher raw material costs on the Young America product line.  Partially offsetting these increases were pricing actions taken on the Stanley Furniture product in the previous quarter, continued operating improvements at the Young America manufacturing facility in Robbinsville, NC and favorable medical claim trends in both periods.

Selling, general and administrative expenses for the three and nine month periods of 2013 as a percentage of net sales were 19.6% and 19.8%, respectively, compared to 19.3% and 18.2% for the comparable 2012periods.  The higher percentage in the current three month period is primarily the result of increased expenditures.  The higher percentage in the nine month period is primarily the result of increased expenditures and, to a lesser extent, lower sales.  Selling, general and administrative expenses for the current three and nine month periods increased $77,000 and $977,000, respectively, compared to the 2012 periods. The current year expenses include restructuring charges associated with consolidating the corporate offices of $10,000 and  $532,000 for the three and nine month periods, respectively. Excluding these one-time costs, higher current year expenditures were driven primarily by increased showroom, marketing and advertising costs on the Stanley Furniture product line.

As a result, operating loss as a percentage of net sales was 8.0% and 8.5% for the three and nine month periods of2013 compared to 5.3% and 4.9% for the comparable 2012 periods.

During the prior year nine month period we recorded income, net of expenses, of $39.4 million from the receipt of funds under the Continued Dumping and Subsidy Offset Act (CDSOA). 

Net interest expense for the three month period of 2013 increased $84,000 from the comparable 2012 period and $245,000 for the nine month period.  Interest expense is primarily composed of interest on insurance policy loans from a legacy deferred compensation plan, which increases annually based on growth in cash surrender value.

Our effective tax rate for the current three and nine month periods is essentially zero since we have established a valuation allowance for our deferred tax assets in excess of our deferred tax liabilities.  The benefit in the current year is primarily related to the release of reserves due to lapse of statute of limitations.  The expense in the prior year period is primarily the result of federal alternative minimum tax on the receipt of proceeds from the CDSOA distributed by U.S. Customs and Border Protection.  Federal alternative minimum tax regulations limit the ability to offset all of the income generated in the period with net operating loss carry forwards.

Financial Condition, Liquidity and Capital Resources

Sources of liquidity include cash on hand and cash generated from operations. We expect cash on hand to be adequate for ongoing operational and capital expenditures for the foreseeable future.  At September 28, 2013, we had $10.9 million in cash, $10.0 million of short-term investments and $1.7 million in restricted cash.

Working capital, excluding cash, restricted cash and short-term investments, increased to $36.9 million at September 28, 2013 from $34.6 million on December 31, 2012.  The increase was primarily the result of a $3.7 million increase in accounts receivable and a $1.9 million reduction in accounts payable. Partially offsetting this working capital increase was a $3.4 million reduction in inventories.

Cash used by operations was $11.9 million in the nine month period of 2013 compared to cash provided by operations of $30.6 million in the comparable prior year period.  The cash used by operations in 2013 was the result of operating losses and to fund the increase in working capital.  The cash provided by operations in the prior year was the result of the receipt of $39.9 million in CDSOA proceeds.

9

Net cash provided by investing activities was $9.9 million in the current nine month period compared to a use of $25.3 million in the comparable prior year period.  During the nine month period of 2013, we invested $2.0 million in capital expenditures for the consolidation of our corporate offices and High Point showroom and $830,000 in final equipment payments as part of the modernization of our Young America manufacturing operation in Robbinsville, North Carolina that started in early 2011. We spent $2.2 million as part of our continued investment in our Enterprise Resource Planning (ERP) system. Offsetting these uses of cash was the maturity of a short term investment of $15.0 million.  During the first nine months of 2012, we invested $20.0 million of our CDSOA proceeds in short-term investments. In addition, we invested $3.2 million in capital expenditures as part of the modernization of our Young America manufacturing operation in Robbinsville, North Carolina and $1.8 million as part of our investment in improved systems. We expect minimal capital expenditures during the remainder of 2013.

Net cash provided by financing activities was $2.0 million in the current nine months of 2013 compared to $2.2 million in the prior year period. Approximately $358,000 was used in the first nine months of 2013 to purchase and retire 80,077 shares of our common stock.  In both years, cash was provided from loans against the increase in cash surrender value of insurance policies.These proceeds were used to pay interest due on outstanding policy loans which is shown as a use of cash in operating activities.

Continued Dumping and Subsidy Offset Act (“CDSOA”)

The CDSOA provides for distribution of monies collected by U.S. Customs and Border Protection (“Customs”) for imports covered by antidumping duty orders entering the United States through September 30, 2007 to eligible domestic producers that supported a successful antidumping petition (“Supporting Producers”) for wooden bedroom furniture imported from China. Antidumping duties for merchandise entering the U.S. after September 30, 2007 have remained with the U.S. Treasury.

Certain manufacturers who did not support the antidumping petition (“Non-Supporting Producers”) filed actions in the United States Court of International Trade, challenging the CDSOA’s “support requirement” and seeking to share in the distributions.  As a result, Customs held back a portion of those distributions (the “Holdback”) pending resolution of the Non-Supporting Producers’ claims.  The Court of International Trade dismissed all of the actions of the Non-Supporting Producers, who appealed to the United States Court of Appeals for the Federal Circuit.  Customs advised that it expected to distribute the Holdback to the Supporting Producers after March 9, 2012.  The Non-Supporting Producers sought injunctions first from the Court of International Trade and, when those efforts were unsuccessful, from the Federal Circuit directing Customs to retain the Holdback until the Non-Supporting Producers’ appeals were resolved.

On March 5, 2012, the Federal Circuit denied the motions for injunction, “without prejudicing the ultimate disposition of these cases.”  As a result, we received a CDSOA distribution of $39.9 million in April 2012. If the Federal Circuit were to reverse the decisions of the Court of International Trade and determine that the Non-Supporting Producers were entitled to CDSOA distributions, it is possible that Customs may seek to have us return all or a portion of our company’s share of that distribution.  On August 19, 2013, a panel of the Federal Circuit affirmed the U.S. Court of International Trade and determined that two of the appealing Non-Supporting Producers did not qualify for distributions.  On October 3, 2013 those producers petitioned the Federal Circuit for a rehearing en banc. Based on what we know today, we believe that the chance Customs will seek and be entitled to obtain a return of our CDSOA distribution is remote.

In addition, according to Customs, as of October 1, 2012, approximately $8.9 million in duties had been secured by cash deposits and bonds on unliquidated entries of wooden bedroom furniture that are subject to the CDSOA, and this amount is potentially available for distribution under the CDSOA to eligible domestic producers in connection with the case involving wooden bedroom furniture imported from China. The amount ultimately distributed will be impacted by appeals concerning the results of the annual administrative review process, which can retroactively increase or decrease the actual duties owed on entries secured by cash deposits and bonds, by collection efforts concerning duties that may be owed, and by any applicable legislation and Custom’s interpretation of that legislation. Assuming that such funds are distributed and that our percentage allocation in future years is the same as it was for the 2011 distribution (approximately 30% of the funds distributed) and the $8.9 million secured by the government does not change as a result of appeals from the annual administrative review process or otherwise, we could receive approximately $2.7 million in CDSOA funds.

10

In November 2012, Customs disclosed that it withheld $3.0 million in funds related to the antidumping duty order on wooden bedroom furniture from China that was otherwise available for distribution until the amounts at issue in the pending litigation have been resolved.  It is expected that Customs will continue withholding such funds until a final decision is reached in the pending litigation. Therefore, no distributions were made in December 2012 for the case involving wooden bedroom furniture from China.

Recently, Customs also disclosed that as of April 30, 2013, an additional $1.1 million of total collected duties was potentially available for distribution in 2013 to eligible domestic manufacturers of wooden bedroom furniture.  Customs noted that the final amounts available for distribution in 2013 could be higher or lower than the preliminary amounts due to liquidations, re-liquidations, protests, or other events affecting entries. This amount, at least in part, may have come from the security held by Customs as of October 1, 2012, but Customs has not updated the amount of duties that remain secured by cash deposits and bonds on un-liquidated entries of wooden bedroom furniture. We expect Customs to withhold these funds from distribution if a final decision is not reached in the pending litigation before the end of the fourth quarter of 2013. 

Due to the uncertainty of the various legal and administrative processes, we cannot provide assurances as to the amount of additional CDSOA funds that ultimately will be received, if any, and we cannot predict when we may receive any additional CDSOA funds.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our 2012 Annual Report on Form 10-K.

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,” “could”, 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 our success in profitably producing Young America products in our domestic manufacturing facility, disruptions in foreign 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 countries from which we source products, international trade policies of the United States and countries from which we source products, lower sales due to worsening of current economic conditions, the cyclical nature of the furniture industry,  business failures or loss of large customers, the inability to raise prices in response to inflation and increasing costs, a failure or interruption of our information technology infrastructure, failure to anticipate or respond to changes in consumer tastes and fashions in a timely manner, competition in the furniture industry including competition from lower-cost foreign manufacturers, the inability to obtain sufficient quantities of quality raw materials in a timely manner, environmental, health, and safety  compliance costs,  limited use of operating loss carry forwards due to ownership change, extended business interruption at our manufacturing facility, and the possibility that U.S. Customs and Border Protection may seek to reclaim all or a portion of the $39.9 million of Continued Dumping and Subsidy Offset Act (CDSOA) proceeds received in the second quarter of 2012. In addition, we have made certain forward looking statements with respect to payments we expect to receive under the CDSOA, which are subject to the risks and uncertainties described in our discussion of those payments that may cause the actual payments to be subject to claims for recovery or to differ materially from those in the forward looking statements.  Any forward-looking statement speaks only as of the date of this filing, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

None of our foreign sales or purchases are denominated in foreign currency and we do not have any foreign currency hedging transactions.  While our foreign purchases are denominated in U.S. dollars, a relative decline in the value of the U.S. dollar could result in an increase in the cost of our products obtained from offshore sourcing and reduce our earnings or increase our losses, unless we are able to increase our prices for these items to reflect any such increased cost.

11

ITEM 4.  Controls and Procedures

(a)        Evaluation of disclosure controls and procedures.  Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).  Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

(b)        Changes in internal controls over financial reporting.  There were no changes in our internal control over financial reporting that occurred during the third quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 6. Exhibits 

3.1	Restated Certificate of Incorporation of the Registrant as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q (Commission File No. 0-14938) for the quarter ended July 2, 2005).
3.2	By-laws of the Registrant as amended (incorporated by reference to Exhibit 3 to the Registrant’s Form 8-K (Commission File No. 0-14938) filed February 3, 2010).
31.1	Certification by Glenn Prillaman, our Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)
31.2	Certification by Micah S. Goldstein, our Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
32.1	Certification of Glenn Prillaman, our Chief Executive Officer, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2	Certification of Micah S. Goldstein, our Chief Financial Officer, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. (1)
101	The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2013, formatted in Extensible Business Reporting Language (“XBRL”): (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) condensed consolidated statements of comprehensive income, (iv) condensed consolidated statements of cash flow, (v) the notes to the consolidated financial statements, and (vi) document and entity information.(1)

(1)Filed herewith

12

SIGNATURE

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

Date: October 15, 2013	STANLEY FURNITURE COMPANY, INC.
	By: /s/ Micah S. Goldstein
	Micah S. Goldstein
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

13

EX-31

Exhibit 31.1

I, Glenn Prillaman, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Stanley Furniture Company, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods in this report.

4.         The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 15, 2013	/s/ Glenn Prillaman
	Glenn Prillaman
	Chief Executive Officer

EX-31

 

Exhibit 31.2

I, Micah S. Goldstein, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Stanley Furniture Company, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods in this report.

4.         The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 15, 2013	/s/Micah S. Goldstein
	Micah S. Goldstein
	Chief Financial Officer

EX-32

 

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Stanley Furniture Company, Inc. (the “Company”) Quarterly Report on Form 10-Q for the period ended September 28, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Glenn Prillaman, Chief Executive Officer of the Company certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1).       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2).       The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 15, 2013	/s/ Glenn Prillaman
	Glenn Prillaman
	Chief Executive Officer

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Stanley Furniture Company, Inc. (the “Company”) Quarterly Report on Form 10-Q for the period ended September 28, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Micah S. Goldstein, Chief Financial Officer of the Company certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1).       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2).       The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 15, 2013	/s/Micah S. Goldstein
	Micah S. Goldstein
	Chief Financial Officer

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Property, Plant and Equipment (Details) - Property, Plant and Equipment (USD $) In Thousands, unless otherwise specified	Sep. 28, 2013	Dec. 31, 2012
Property, Plant and Equipment [Abstract]
Land, buildings and leasehold improvements	$ 16,276	$ 14,049
Machinery and equipment	29,027	28,406
Office furniture and equipment	1,000	1,000
Construction in process	392	522
Property, plant and equipment, at cost	46,695	43,977
Less accumulated depreciation	25,511	24,107
Property, plant and equipment, net	$ 21,184	$ 19,870

XML

Consolidated Statements of Operations (unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012	Sep. 28, 2013	Sep. 29, 2012
Net sales	$ 23,982	$ 23,977	$ 74,200	$ 75,186
Cost of sales	21,203	20,632	65,856	65,166
Gross profit	2,779	3,345	8,344	10,020
Selling, general, and administrative expenses	4,711	4,634	14,676	13,699
Operating loss	(1,932)	(1,289)	(6,332)	(3,679)
Income from Continued Dumping and Subsidy Offset Act,net		53		39,414
Other income, net	33	23	51	64
Interest income	17	26	60	51
Interest expense	715	640	2,015	1,761
(Loss) income before taxes	(2,597)	(1,827)	(8,236)	34,089
Income tax (benefit) expense	(127)	77	(143)	697
Net (loss) income	$ (2,470)	$ (1,904)	$ (8,093)	$ 33,392
(Loss) income per share:
Basic (in Dollars per share)	$ (0.17)	$ (0.13)	$ (0.57)	$ 2.33
Diluted (in Dollars per share)	$ (0.17)	$ (0.13)	$ (0.57)	$ 2.30
Weighted average shares outstanding:
Basic (in Shares)	14,136	14,345	14,145	14,345
Diluted (in Shares)	14,136	14,345	14,145	14,487

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Employee Benefit Plans

9 Months Ended

Sep. 28, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

4.         Employee Benefit Plans

Components of other postretirement benefit cost:

	Three Months				Nine Months
	Ended				Ended
		Sept. 28, 2013		Sept. 29, 2012		Sept. 28, 2013		Sept. 29, 2012
Interest cost	$	23	$	34	$	73	$	99
Amortization of prior service benefit		(42)		(44)		(126)		(133)
Amortization of actuarial loss		8		10		25		24
Net periodic postretirement benefit cost (benefit)	$	(11)	$	-	$	(28)	$	(10)

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Restructuring and Related Charges (Details) - Restructuring accrual activity (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual at January 1, 2013	$ 732	$ 606
Charges to expense	532	395
Cash payments	(632)	(208)
Accrual at September 28, 2013	632	793
Lease Obligations [Member]
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual at January 1, 2013	732	499
Charges to expense		418
Cash payments	(183)	(124)
Accrual at September 28, 2013	549	793
Severance And Other Termination Costs [Member]
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual at January 1, 2013		57
Charges to expense	532	17
Cash payments	(449)	(74)
Accrual at September 28, 2013	83
Other Cost [Member]
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual at January 1, 2013		50
Charges to expense		(40)
Cash payments		(10)
Accrual at September 28, 2013

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Income taxes (Details) (USD $)	9 Months Ended
	Sep. 28, 2013
Income Tax Disclosure [Abstract]
Valuation Allowance, Deferred Tax Asset, Change in Amount	$ 3,600,000
Deferred Tax Assets, Valuation Allowance	7,200,000
Deferred Tax Assets, Net, Noncurrent	(622,000)
Operating Loss Carryforwards	$ 39,400,000

XML

Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012
Cash flows from operating activities:
Cash received from customers	$ 70,545	$ 73,503
Cash paid to suppliers and employees	(79,816)	(79,818)
Cash from Continued Dumping and Subsidy Offset Act		39,909
Interest paid, net	(2,514)	(2,246)
Income taxes paid, net	(156)	(748)
Net cash (used) provided by operating activities	(11,941)	30,600
Cash flows from investing activities:
Sale of short-term securities	15,000
Purchase of short-term securities		(20,000)
Restricted cash increase		(150)
Capital expenditures	(2,881)	(3,226)
Purchase of other assets	(2,189)	(2,007)
Proceeds from sale of assets		55
Net cash provided (used) by investing activities	9,930	(25,328)
Cash flows from financing activities:
Purchase and retirement of common stock	(358)
Proceeds from insurance policy loans	2,416	2,283
Proceeds from exercise of stock options	38
Capital lease payments	(99)	(99)
Net cash provided by financing activities	1,997	2,184
Net (decrease) increase in cash and equivalents	(14)	7,456
Cash and equivalents at beginning of period	10,930	15,700
Cash and equivalents at end of period	10,916	23,156
Reconciliation of net (loss) income to net cash (used) provided by operating activities:
Net (loss) income	(8,093)	33,392
Depreciation and amortization	1,587	1,320
Stock-based compensation	661	589
Gain on disposal of assets		(50)
Changes in assets and liabilities:
Accounts receivable	(3,671)	(1,619)
Inventories	3,394	(401)
Prepaid expenses and other current assets	(3,428)	(2,181)
Accounts payable	(1,692)	(1,502)
Accrued salaries, wages and benefits	596	475
Other accrued expenses	(342)	496
Other assets	(559)	(492)
Other long-term liabilities	(394)	573
Net cash (used) provided by operating activities	$ (11,941)	$ 30,600

XML

Property, Plant and Equipment

9 Months Ended

Sep. 28, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

2.         Property, Plant and Equipment

		September 28, 2013		December 31, 2012
Land, buildings and leasehold improvements	$	16,276	$	14,049
Machinery and equipment		29,027		28,406
Office furniture and equipment		1,000		1,000
Construction in process		392		522
Property, plant and equipment, at cost		46,695		43,977
Less accumulated depreciation		25,511		24,107
Property, plant and equipment, net	$	21,184	$	19,870

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Stockholders' Equity

9 Months Ended

Sep. 28, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

5.         Stockholders’ Equity

Basic earnings per common share are based upon the weighted average shares outstanding.  Outstanding stock options and restricted stock are treated as potential common stock for purposes of computing diluted earnings per share.  Basic and diluted earnings per share are calculated using the following share data:

	Three Months		Nine Months
	Ended		Ended
	Sept. 28, 2013	Sept. 29, 2012	Sept. 28, 2013	Sept. 29, 2012
Weighted average shares outstanding for basic calculation	14,136	14,345	14,145	14,345
Add: Effect of dilutive stock options and restricted stock	-	-	-	142
Weighted average shares outstanding adjusted for diluted calculation	14,136	14,345	14,145	14,487

During the three and nine month periods ended September 28, 2013, the dilutive effect of outstanding stock options and restricted stock is not recognized since we have a net loss for those periods.  Approximately 2.0 million shares in 2013 were issuable upon the exercise of stock options.  Also, 373,000 shares of restricted stock in 2013 were not included because they were anti-dilutive.  During the three and nine month periods ended September 29, 2012, approximately 1.8 million and 729,000 stock options, respectively, were excluded from the diluted per share calculation as they would be anti-dilutive.  In addition, 205,000 shares of restricted stock were not included in the three month period of 2012 because they were anti-dilutive.

A reconciliation of the activity in Stockholders’ Equity accounts for the first nine months of 2013 is as follows:

		Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss
Balance, December 31, 2012	$	284	$	15,018	$	72,421	$	(484)
Net loss		-		-		(8,093)		-
Stock repurchased		(2)		(356)		-		-
Stock-based compensation		-		661		-		-
Exercise of stock options		-		38		-		-
Adjustment to net periodic benefit cost		-		-		-		(100)
Balance, September 28, 2013	$	282	$	15,361	$	64,328	$	(584)

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Income taxes

9 Months Ended

Sep. 28, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

3.         Income taxes

During the nine months of 2013, we recorded a non-cash charge to our valuation allowance of $3.6 million, increasing our valuation allowance against deferred tax assets to $7.2 million at September 28, 2013.  The primary assets covered by this valuation allowance are net operating losses. The valuation allowance was calculated in accordance with the provisions of ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence when measuring the need for a valuation allowance.  Our results over the most recent three-year period were heavily affected by our business restructuring activities. Our cumulative operating loss in the most recent three-year period, in our view, represented sufficient negative evidence to require a valuation allowance under the provisions of ASC 740, Income Taxes. We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal. Although realization is not assured, we have concluded that the remaining net deferred tax asset in the amount of $622 will be realized based on the reversal of existing deferred tax liabilities. The amount of the deferred tax assets actually realized, however, could vary if there are differences in the timing or amount of future reversals of existing deferred tax liabilities. Should we determine that we will not be able to realize all or part of our deferred tax asset in the future, an adjustment to the deferred tax asset will be charged to income in the period such determination is made.  The income tax benefit recognized during the three and nine month periods was primarily generated due to the releasing of reserves due to lapse of statute of limitations.

During the nine months of 2012, we utilized $39.4 million of our net operating loss carry forwards against the income recognized by proceeds from the Continued Dumping and Subsidy Offset Act distributed by U.S. Customs and Border Protection in April of 2012. The income tax expense recognized during the three and nine month periods was primarily generated from the federal alternative minimum tax. The alternative minimum tax limited our ability to offset income generated during the period with net operating loss carry forwards.

The major reconciling items between our effective income tax rate and the federal statutory rate are the changes in our valuation allowance and the cash surrender value on life insurance policies.

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 28, 2013	Dec. 31, 2012
Allowances (in Dollars)	$ 783	$ 654
Common stock par value (in Dollars per share)	$ 0.02	$ 0.02
Common stock, shares authorized (in Shares)	25,000,000	25,000,000
Common stock, shares issued (in Shares)	14,509,119	14,566,099
Common stock, shares outstanding (in Shares)	14,509,119	14,566,099

XML

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 28, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of Costs of Retirement Plans [Table Text Block]

	Three Months				Nine Months
	Ended				Ended
		Sept. 28, 2013		Sept. 29, 2012		Sept. 28, 2013		Sept. 29, 2012
Interest cost	$	23	$	34	$	73	$	99
Amortization of prior service benefit		(42)		(44)		(126)		(133)
Amortization of actuarial loss		8		10		25		24
Net periodic postretirement benefit cost (benefit)	$	(11)	$	-	$	(28)	$	(10)

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Consolidated Statements of Comprehensive Income (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012	Sep. 28, 2013	Sep. 29, 2012
Net (loss) income	$ (2,470)	$ (1,904)	$ (8,093)	$ 33,392
Other comprehensive loss:
Amortization of prior service benefit	(42)	(44)	(126)	(133)
Amortization of actuarial loss	8	10	25	24
Adjustments to net periodic benefit cost	(34)	(34)	(101)	(109)
Comprehensive (loss) income	$ (2,504)	$ (1,938)	$ (8,194)	$ 33,283

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 28, 2013	Dec. 31, 2012
Current assets:
Cash and equivalents	$ 10,916	$ 10,930
Restricted cash	1,737	1,737
Short-term investments	10,000	25,000
Accounts receivable, less allowances of $783 and $654	13,699	10,028
Inventories:
Finished goods	28,224	30,980
Work-in-process	1,651	1,845
Raw materials	1,791	2,235
Total inventories	31,666	35,060
Prepaid and other current assets	4,307	3,438
Deferred taxes	622	962
Total current assets	72,947	87,155
Property, plant and equipment, net	21,184	19,870
Other assets	6,398	3,691
Total assets	100,529	110,716
Current liabilities:
Accounts payable	6,811	8,667
Accrued salaries, wages and benefits	4,295	3,826
Other accrued expenses	2,306	2,421
Total current liabilities	13,412	14,914
Deferred income taxes	622	962
Other long-term liabilities	7,108	7,601
Total liabilities	21,142	23,477
STOCKHOLDERS’ EQUITY
Common stock, $.02 par value, 25,000,000 shares authorized, 14,509,119 and 14,566,099 shares issued and outstanding	282	284
Capital in excess of par value	15,361	15,018
Retained earnings	64,328	72,421
Accumulated other comprehensive loss	(584)	(484)
Total stockholders’ equity	79,387	87,239
Total liabilities and stockholders’ equity	$ 100,529	$ 110,716

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Restructuring and Related Charges (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012
Restructuring and Related Charges (Details) [Line Items]
Restructuring Charges	$ 532	$ 395
Severance And Relocation Cost [Member]
Restructuring and Related Charges (Details) [Line Items]
Restructuring Charges	$ 532

XML

Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 28, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

		September 28, 2013		December 31, 2012
Land, buildings and leasehold improvements	$	16,276	$	14,049
Machinery and equipment		29,027		28,406
Office furniture and equipment		1,000		1,000
Construction in process		392		522
Property, plant and equipment, at cost		46,695		43,977
Less accumulated depreciation		25,511		24,107
Property, plant and equipment, net	$	21,184	$	19,870

XML

Restructuring and Related Charges (Tables)

9 Months Ended

Sep. 28, 2013

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

		Lease Obligations		Severance and other termination costs		Total
Accrual at January 1, 2013	$	732	$	-	$	732
Charges to expense		-		532		532
Cash payments		(183)		(449)		(632)
Accrual at September 28, 2013	$	549	$	83	$	632

		Lease		Severance and other		Other
		Obligations		termination costs		Cost		Total
Accrual at January 1, 2012	$	499	$	57	$	50	$	606
Charges and adjustments to expense		418		17		(40)		395
Cash payments		(124)		(74)		(10)		(208)
Accrual at September 29, 2012	$	793	$	-	$	-	$	793

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Restructuring and Related Charges

9 Months Ended

Sep. 28, 2013

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

6.    Restructuring and Related Charges

In 2012, we made the strategic decision to consolidate our corporate office and High Point showroom into a single multi-purpose facility in High Point, North Carolina.  During the current nine month period, we recorded $532 in restructuring charges in selling, general and administrative expenses for severance and relocation costs associated with this move and consolidation.

Restructuring accrual activity for the nine months ending September 28, 2013 was as follows:

		Lease Obligations		Severance and other termination costs		Total
Accrual at January 1, 2013	$	732	$	-	$	732
Charges to expense		-		532		532
Cash payments		(183)		(449)		(632)
Accrual at September 28, 2013	$	549	$	83	$	632

Restructuring accrual activity for the nine months ending September 29, 2012 was as follows:

		Lease		Severance and other		Other
		Obligations		termination costs		Cost		Total
Accrual at January 1, 2012	$	499	$	57	$	50	$	606
Charges and adjustments to expense		418		17		(40)		395
Cash payments		(124)		(74)		(10)		(208)
Accrual at September 29, 2012	$	793	$	-	$	-	$	793

The restructuring accrual is classified as “Other accrued expenses”.

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Preparation of Interim Unaudited Consolidated Financial Statements

9 Months Ended

Sep. 28, 2013

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.         Preparation of Interim Unaudited Consolidated Financial Statements

The consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).  In our opinion, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein.  All such adjustments are of a normal recurring nature.  Certain information and footnote disclosures prepared in accordance with generally accepted accounting principles have been either condensed or omitted pursuant to SEC rules and regulations.  However, we believe that the disclosures made are adequate for a fair presentation of results of operations and financial position.  Operating results for the interim periods reported herein may not be indicative of the results expected for the year.  We suggest that these consolidated financial statements be read in conjunction with the consolidated financial statements and accompanying notes included in our latest Annual Report on Form 10-K.

A correction of an immaterial presentation error was made in the Consolidated Statements of Comprehensive Income for the prior year three and nine month periods. 

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Employee Benefit Plans (Details) - Schedule of Costs of Retirement Plans (Other Postretirement Benefit Plan, Defined Benefit [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012	Sep. 28, 2013	Sep. 29, 2012
Other Postretirement Benefit Plan, Defined Benefit [Member]
Employee Benefit Plans (Details) - Schedule of Costs of Retirement Plans [Line Items]
Interest cost	$ 23	$ 34	$ 73	$ 99
Amortization of prior service benefit	(42)	(44)	(126)	(133)
Amortization of actuarial loss	8	10	25	24
Net periodic postretirement benefit cost (benefit)	$ (11)		$ (28)	$ (10)

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 28, 2013

Stockholders' Equity Note [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months		Nine Months
	Ended		Ended
	Sept. 28, 2013	Sept. 29, 2012	Sept. 28, 2013	Sept. 29, 2012
Weighted average shares outstanding for basic calculation	14,136	14,345	14,145	14,345
Add: Effect of dilutive stock options and restricted stock	-	-	-	142
Weighted average shares outstanding adjusted for diluted calculation	14,136	14,345	14,145	14,487

Schedule of Stockholders Equity [Table Text Block]

		Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss
Balance, December 31, 2012	$	284	$	15,018	$	72,421	$	(484)
Net loss		-		-		(8,093)		-
Stock repurchased		(2)		(356)		-		-
Stock-based compensation		-		661		-		-
Exercise of stock options		-		38		-		-
Adjustment to net periodic benefit cost		-		-		-		(100)
Balance, September 28, 2013	$	282	$	15,361	$	64,328	$	(584)

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Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012	Sep. 28, 2013	Sep. 29, 2012
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance, December 31, 2012			$ 87,239
Net loss	(2,470)	(1,904)	(8,093)	33,392
Stock repurchased			(358)
Stock-based compensation			661	589
Exercise of stock options			38
Adjustment to net periodic benefit cost	34	34	101	109
Balance, September 28, 2013	79,387		79,387
Common Stock [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance, December 31, 2012			284
Net loss
Stock repurchased			(2)
Stock-based compensation
Exercise of stock options
Adjustment to net periodic benefit cost
Balance, September 28, 2013	282		282
Additional Paid-in Capital [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance, December 31, 2012			15,018
Net loss
Stock repurchased			(356)
Stock-based compensation			661
Exercise of stock options			38
Adjustment to net periodic benefit cost
Balance, September 28, 2013	15,361		15,361
Retained Earnings [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance, December 31, 2012			72,421
Net loss			(8,093)
Stock repurchased
Stock-based compensation
Exercise of stock options
Adjustment to net periodic benefit cost
Balance, September 28, 2013	64,328		64,328
Accumulated Other Comprehensive Income (Loss) [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance, December 31, 2012			(484)
Net loss
Stock repurchased
Stock-based compensation
Exercise of stock options
Adjustment to net periodic benefit cost			(100)
Balance, September 28, 2013	$ (584)		$ (584)

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Stockholders' Equity (Details)	3 Months Ended	9 Months Ended
	Sep. 28, 2012	Sep. 28, 2013	Sep. 28, 2012
Equity Option [Member]
Stockholders' Equity (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,800,000	2,000,000	729,000
Restricted Stock [Member]
Stockholders' Equity (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	205,000	373,000

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Document And Entity Information	9 Months Ended
	Sep. 28, 2013	Oct. 09, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	STANLEY FURNITURE CO INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		14,509,119
Amendment Flag	false
Entity Central Index Key	0000797465
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 28, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Stockholders' Equity (Details) - Basic and Diluted Earnings Per Share Calculation In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Sep. 29, 2012	Sep. 28, 2013	Sep. 29, 2012
Basic and Diluted Earnings Per Share Calculation [Abstract]
Weighted average shares outstanding for basic calculation	14,136	14,345	14,145	14,345
Add: Effect of dilutive stock options and restricted stock				142
Weighted average shares outstanding adjusted for diluted calculation	14,136	14,345	14,145	14,487