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 26, 2015

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, No. 200, High Point, North Carolina, 27260(Address of principal executive offices, Zip Code)

(336-884-7700)

(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   ()	Smaller reporting company (X)
(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 23, 2015, 14,911,453 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 26, 2015		December 31, 2014
ASSETS
Current assets:
Cash	$	5,577	$	5,584
Restricted cash		663		1,190
Accounts receivable, less allowances of $464 and $375		6,741		5,853
Inventories:
Finished goods		20,989		23,935
Work-in-process		19		268
Raw materials		-		13
Total inventories		21,008		24,216
Assets of discontinued operations		-		1,373
Prepaid expenses and other current assets		827		890
Deferred income taxes		38		66
Total current assets		34,854		39,172
Property, plant and equipment, net		1,851		1,990
Cash surrender value of life insurance policies, net		20,725		15,129
Other assets		3,218		3,416
Total assets	$	60,648	$	59,707
LIABILITIES
Current liabilities:
Accounts payable	$	3,904	$	6,425
Liabilities of discontinued operations		16		93
Accrued salaries, wages and benefits		1,569		1,738
Other accrued expenses		413		1,437
Total current liabilities		5,902		9,693
Deferred income taxes		38		66
Pension plans		6,504		6,936
Other long-term liabilities		2,245		2,033
Total liabilities		14,689		18,728
STOCKHOLDERS’ EQUITY
Common stock, $.02 par value, 25,000,000 shares authorized, 14,911,453 and 14,780,326 shares issued and outstanding		283		283
Capital in excess of par value		17,249		16,710
Retained earnings		31,106		26,683
Accumulated other comprehensive loss		(2,679)		(2,697)
Total stockholders’ equity		45,959		40,979
Total liabilities and stockholders’ equity	$	60,648	$	59,707

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
	Sept. 26, 2015		Sept. 27, 2014		Sept. 26, 2015		Sept. 27, 2014
Net sales	$	13,760	$	13,928	$	43,565	$	44,603
Cost of sales		10,350		11,304		33,333		36,316
Gross profit		3,410		2,624		10,232		8,287
Selling, general, and administrative expenses		2,823		3,294		9,921		11,755
Operating income (loss)		587		(670)		311		(3,468)
Income from Continued Dumping and Subsidy Offset Act, net		-		-		4,896		-
Other income, net		12		24		52		336
Interest expense, net		216		802		756		2,259
Income (loss) from continuing operations before taxes		383		(1,448)		4,503		(5,391)
Income tax (benefit) expense		(8)		(10)		71		(31)
Net income (loss) from continuing operations		391		(1,438)		4,432		(5,360)
Net income (loss) from discontinued operations		74		(1,118)		(9)		(21,322)
Net income (loss)	$	465	$	(2,556)	$	4,423	$	(26,682)
Basic income (loss) per share:
Income (loss) from continuing operations	$	.03	$	(.10)	$	.31	$	(.38)
Income (loss) from discontinued operations		-		(.08)		-		(1.50)
Net income (loss)	$	.03	$	(.18)	$	.31	$	(1.88)
Diluted income (loss) per share:
Income (loss) from continuing operations	$	.03	$	(.10)	$	.30	$	(.38)
Income (loss) from discontinued operations		-		(.08)		-		(1.50)
Net income (loss)	$	.03	$	(.18)	$	.30	$	(1.88)
Weighted average shares outstanding:
Basic		14,285		14,209		14,260		14,185
Diluted		14,548		14,209		14,531		14,185

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
	Sept. 26, 2015		Sept. 27, 2014		Sept. 26, 2015		Sept. 27, 2014
Net income (loss)	$	465	$	(2,556)	$	4,423	$	(26,682)
Other comprehensive income (loss):
Amortization of prior service cost		23		38		69		115
Amortization of actuarial loss		(29)		(18)		(87)		(56)
Adjustments to net periodic benefit cost		(6)		20		(18)		59
Comprehensive income (loss)	$	471	$	(2,576)	$	4,441	$	(26,741)

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 26, 2015		September 27, 2014
Cash flows from operating activities:
Cash received from customers	$	42,426	$	43,868
Cash paid to suppliers and employees		(44,091)		(50,576)
Cash from Continued Dumping and Subsidy Offset Act		4,896		-
Interest paid, net		(670)		(2,884)
Income taxes paid		(103)		-
Net cash provided (used) by operating activities		2,458		(9,592)
Cash flows from investing activities:
Decrease in restricted cash		527		547
Sale of short-term securities		-		10,000
Purchase of other assets		-		(44)
Net cash provided by investing activities		527		10,503
Cash flows from financing activities:
Payments on insurance policy loans		(4,279)		-
Proceeds from insurance policy loans		-		2,701
Net cash (used) provided by financing activities		(4,279)		2,701
Cash flows from discontinued operations:
Cash provided by operating activities		1,287		4,271
Cash provided by investing activities		-		3,479
Net cash provided by discontinued operations		1,287		7,750
Net (decrease) increase in cash		(7)		11,362
Cash at beginning of period		5,584		7,218
Cash at end of period	$	5,577	$	18,580
Reconciliation of net income (loss) to net cash provided (used) by operating activities:
Net income (loss)	$	4,423	$	(26,682)
Loss from discontinued operations		9		21,322
Depreciation and amortization		352		408
Stock-based compensation		539		634
Changes in assets and liabilities:
Accounts receivable		(888)		(580)
Inventories		3,208		922
Prepaid expenses and other assets		(1,253)		(3,076)
Accounts payable		(2,521)		(2,413)
Accrued salaries, wages and benefits		(161)		455
Other accrued expenses		(1,030)		284
Other long-term liabilities		(220)		(866)
Net cash provided (used) by operating activities	$	2,458	$	(9,592)

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.

Results of the discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all periods presented, unless otherwise noted.

2.

Property, Plant and Equipment

	September 26, 2015		December 31, 2014
Machinery and equipment	$	3,847	$	3,883
Leasehold improvements		1,833		1,833
Property, plant and equipment, at cost		5,680		5,716
Less accumulated depreciation		3,829		3,726
Property, plant and equipment, net	$	1,851	$	1,990

3.

Income taxes

During the first nine months of 2015, we utilized $2,979 of our net operating loss carry-forwards against income from the Continued Dumping and Subsidy Offset Act distributed by U.S. Customs and Border Protection in March and April of this year (see Note 7).  The income tax expense recognized during the current nine month period was primarily generated from the federal alternative minimum tax.  The alternative minimum tax limits our ability to offset income generated during the period with net operating loss carry-forwards.  During the first nine months of 2015, we reduced our valuation allowance against deferred tax assets from $21,724 to $20,579 at September 26, 2015.

We maintain a valuation allowance against deferred tax assets that currently exceed our deferred tax liabilities.  The primary assets covered by this valuation allowance are net operating loss carry-forwards. 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 loss in the most recent three-year period, in our view, represented sufficient negative evidence to support 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 $38 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 assets in the future, an adjustment to the deferred tax asset will be charged to income in the period such determination is made.  

6

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

3.

Income taxes (continued)

Our effective tax rates for the current three and nine month periods were a benefit of 1.8% and an expense of 1.6%, respectively, driven by the impact of the alternative minimum tax outlined above.  The effective tax rate in the prior year three and nine month periods was essentially zero since we had established a valuation allowance for our deferred tax assets in excess of our deferred tax liabilities.  The major reconciling items between our effective income tax rate and the federal statutory rate are the change in our valuation allowance and the cash surrender value on life insurance policies.

4.

Employee Benefit Plans

Components of other postretirement benefit cost:

	Three Months Ended				Nine Months Ended
	Sept. 26, 2015		Sept. 27, 2014		Sept. 26, 2015		Sept. 27, 2014
Interest cost	$	70	$	75	$	210	$	224
Amortization of prior service benefit		(23)		(38)		(69)		(115)
Amortization of actuarial loss		29		18		87		56
Net periodic postretirement benefit cost	$	76	$	55	$	228	$	165

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. 26, 2015	Sept. 27, 2014	Sept. 26, 2015	Sept. 27, 2014
Weighted average shares outstanding for basic calculation	14,285	14,209	14,260	14,185
Add: Effect of dilutive stock awards	263	-	271	-
Weighted average shares outstanding, adjusted for diluted calculation	14,548	14,209	14,531	14,185

In the three and nine month periods ended September 26, 2015, approximately 1,352 and 1,376 stock awards respectively, were excluded from the diluted per share calculation as they would be anti-dilutive.  In the 2014 three and nine month periods, the dilutive effect of stock options is not recognized since we had a net loss.  Approximately 1,639 shares in the three and nine month periods of 2014 were issuable upon the exercise of stock options, which were not included in the diluted per share calculation because they were anti-dilutive.  Also, 544 shares in 2014 of restricted stock were not included because they were anti-dilutive.

7

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

5.

Stockholders’ Equity (continued)

A reconciliation of the activity in Stockholders’ Equity accounts for the first nine months ended September 26, 2015 is as follows:

							Accumulated Other Comprehensive Loss
			Capital in Excess of Par Value
	Common Stock				Retained Earnings
Balance at December 31, 2014	$	283	$	16,710	$	26,683	$	(2,697)
Net income		-		-		4,423		-
Stock-based compensation		-		539		-		-
Adjustment to net periodic benefit cost		-		-		-		18
Balance at September 26, 2015	$	283	$	17,249	$	31,106	$	(2,679)

6.

Restructuring and Related Charges

During 2014, we completed the exit of our Stanleytown warehouse facility and took a charge for the remaining payments on the lease, which expires in December 2015.

During 2013, we recorded restructuring charges in selling, general and administrative expenses for severance and relocation costs associated with the consolidation of our corporate office and High Point showroom into a single multi-purpose facility.  All of these expenses were paid out in 2014.

Restructuring accrual activity for the nine months ended September 26, 2015 was as follows:

	Lease Obligations
Accrual at January 1, 2015	$	480
Charges to expense		-
Cash payments		(360)
Accrual at September 26, 2015	$	120

Restructuring accrual activity for the nine months ended September 27, 2014 was as follows:

			Severance and other termination costs
	Lease Obligations				Total
Accrual at January 1, 2014	$	488	$	169	$	657
Charges to expense		354		(39)		315
Cash payments		(242)		(116)		(358)
Accrual at September 27, 2014	$	600	$	14	$	614

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

7.

Income from Continued Dumping and Subsidy Offset Act (CDSOA)

We recorded income of $4,896 in the nine month period ended September 26, 2015, respectively, from CDSOA distributions previously withheld by Customs pending resolution of non-supporting producers’ claims seeking to share in these distributions.  No funds were received in the current year three month period or in the prior year nine month period.  

8

STANLEY FURNITURE COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

8.

Discontinued Operations

During the second quarter of 2014, we concluded that revenue on our Young America product line remained below the level needed to reach profitability and that the time frame needed to assure sustainable profitability was longer than we felt was economically justified.  Therefore, we made the decision to cease manufacturing operations at our Robbinsville, North Carolina facility and sell the related assets of this facility.  Manufacturing operations were ceased in the third quarter of 2014 and as a result this product line was reflected as a discontinued operation pursuant to the provisions of Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08) for all periods presented.   

Income (loss) from discontinued operations, net of taxes, is comprised of the following:

	Three Months Ended				Nine Months Ended
	Sept. 26, 2015		Sept. 27, 2014		Sept. 26, 2015		Sept. 27, 2014
Net sales	$	16	$	3,510	$	554	$	19,263
Cost of sales		41		4,295		760		36,748
Selling, general and administrative expenses, net		(36)		333		(134)		3,837
Other income		63		-		63		-
Income (loss) from discontinued operations before income taxes		74		(1,118)		(9)		(21,322)
Income taxes		-		-		-		-
Income (loss) from discontinued operations, net of income taxes	$	74	$	(1,118)	$	(9)	$	(21,322)

In the current year three month period, income from discontinued operations resulted from better realization on assets than originally estimated.  In the current nine month period, the loss from discontinued operations is from cost related to the final disposition of inventory.  In the prior year, losses from discontinued operations included accelerated depreciation and amortization, write-down of inventories and other assets, severance and other termination costs and operating losses related to final manufacturing production.

Net assets for discontinued operations are as follows:

	September 26, 2015		December 31, 2014
Accounts receivable, net	$	-	$	695
Inventory, net		-		678
Total assets		-		1,373
Accounts payable and other liabilities		16		93
Net (liabilities) assets	$	(16)	$	1,280

9

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 Operations:

	Three Months Ended				Nine Months Ended
	Sept. 26, 2015		Sept. 27, 2014		Sept. 26, 2015		Sept. 27, 2014
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	75.2		81.2		76.5		81.4
Gross profit	24.8		18.8		23.5		18.6
Selling, general and administrative expenses	20.5		23.6		22.8		26.4
Operating income (loss)	4.3		(4.8)		.7		(7.8)
CDSOA income	-		-		11.3		-
Other income (expense), net	.1		.2		.1		.8
Interest expense, net	1.6		5.8		1.7		5.1
Income (loss) from continuing operations before income taxes	2.8		(10.4)		10.4		(12.1)
Income tax (benefit) expense	(.1)		(.1)		.2		(.1)
Net income (loss) from continuing operations	2.9		(10.3)		10.2		(12.0)
Net income (loss) from discontinued operations	.5		(8.0)		-		(47.8)
Net income (loss)	3.4	%	(18.3)	%	10.2	%	(59.8)	%

Net sales of $13.8 million for the three month period ended September 26, 2015, decreased $168,000, or 1.2%, compared to the 2014 three month period.   For the nine month period ended September 26, 2015, net sales decreased $1.0 million, or 2.3%, from the comparable 2014 period.  The decrease in both periods was driven by lower unit volume, partially offset by higher average selling prices resulting from less discounting and a modest price increase that went into effect in June of this year.  

Gross profit for the current three month period increased to $3.4 million, or 24.8% of net sales, from $2.6 million, or 18.8% of net sales, for the comparable three months of 2014.  The increase in gross profit in the current three month period was driven primarily by a reduction in operation support costs, lower sales discounting and lower product and freight costs.  Gross profit for the current nine month period increased to $10.2 million, or 23.5% of net sales, from $8.3 million, or 18.6% of net sales, for the comparable nine months of 2014.  The increase in gross profit in the nine month period was driven by lower sales discounts and lower operation support costs.  Partially offsetting these improvements in the nine month period was higher ocean freight costs resulting from West Coast port issues.  The prior year nine month period reflects a restructuring charge of $354,000 for future lease commitments on a warehouse facility that is no longer utilized.

Selling, general and administrative expenses for the three and nine month periods of 2015 were $2.8 million and $9.9 million, or 20.5% and 22.8% of net sales, respectively, compared to $3.3 million and $11.8 million, or 23.6% and 26.4% of net sales, in the comparable 2014 periods.  The lower percentages in both the three and nine month periods were the result of reducing our expenditures as we aligned our cost structure to support lower volume levels and new operation model.  These reductions were not in place until the second half of 2014.  Partially offsetting these savings in the current nine month period are higher showroom expenditures to support the launch of our new nursery and youth line, Stone and Leigh.  In addition, the third quarter expenditures were lower than the prior year three months due to timing of market expenses and lower compensation expense.

As a result, operating income as a percentage of net sales was 4.3% and .7% for the current three and nine month periods, respectively, compared to losses of 4.8% and 7.8% in the comparable three and nine 2014 periods.

During the current year nine month period we recorded income of $4.9 million, from the receipt of funds under the Continued Dumping and Subsidy Offset Act (CDSOA).

10

Other income in the prior year nine month period was for the reversal of tariff accruals on imported bedroom furniture that U.S. Customs liquidated in the prior year first quarter without assessing any additional liability.

Interest expense for the three and nine month periods of 2015 decreased $586,000 and $1.5 million, respectively, from the comparable 2014 periods.  Interest expense is composed of interest on loans against cash surrender value of insurance policies from a legacy deferred compensation plan.  The increase in cash surrender value is recorded in operating income to offset our overall benefit cost.  In November 2014, we used excess cash to pay down $13.7 million in outstanding loans.  In 2015, we paid down an additional $1.4 million in outstanding loans in March and $2.9 million in April, lowering our interest expense going forward.  At current outstanding loan levels, interest expense would be approximately $900,000 annually.

Our effective tax rates for the current three and nine month periods were a benefit of 1.8% and an expense of 1.6%, respectively.   The income tax expense recognized during the current nine month period was primarily generated from the federal alternative minimum tax.  The alternative minimum tax limits our ability to offset all of our income generated with net operating loss carry-forwards. The effective tax rate in the prior year was essentially zero since we had established a valuation allowance for our deferred tax assets in excess of our deferred tax liabilities.  The major reconciling items between our effective income tax rate and the federal statutory rate are changes in our valuation allowance and the cash surrender value on life insurance policies.  The benefit in the prior year period was primarily from the release of reserves due to lapse of statute of limitations.

During 2014, we ceased production of our Young America product line and closed our manufacturing operation in Robbinsville, North Carolina.  Income of $74,000 and a loss of $9,000 were recognized from discontinued operations in the three and nine month periods ended September 26, 2015.  The loss from discontinued operations for 2014 was $22.0 million and consisted mostly of asset impairment charges, costs of finalizing operations and severance and other termination costs.  No future expenses related to the discontinued operations are expected.  

Financial Condition, Liquidity and Capital Resources

Sources of liquidity include cash on hand, cash generated from operations and cash surrender value of life insurance policies. While we believe that our business strategy will be successful, we cannot predict with certainty the ultimate impact on our revenues, operating costs and cash flow from operations.  We expect cash on hand to be adequate for ongoing operational and capital expenditures for the foreseeable future.  At September 26, 2015 we had $5.6 million in cash, $663,000 in restricted cash and $20.7 million available in cash surrender value on company owned life insurance policies.  These policies are with Genworth Life Insurance Company which has an A- rating from A.M. Best.

Working capital, excluding cash, restricted cash and net assets of discontinued operations, increased to $22.7 million at September 26, 2015 from $21.4 million on December 31, 2014.  The increase was primarily the result of decreases in accounts payable driven by lower in-transit inventory from our vendors, a decline in accrued expenses resulting predominantly from reductions in deferred revenue and restructuring accruals and from higher accounts receivable balances as shipping volumes were more heavily weighted near the end of the current quarter.  Partially offsetting these increases was a decrease in inventory resulting from our efforts to properly align our inventory levels with demand.

Cash provided by operations was $2.5 million in the current nine months of 2015 compared to cash used of $9.6 million in the comparable prior year period.  The cash generation in 2015 was the result of receiving $4.9 million on CDSOA proceeds during the period.  Excluding the CDSOA receipts, the improvement in cash flow from operating activities was driven by lower cash payments to suppliers and employees as the benefits of aligning our organizational structure with our new operations model were not realized until the second half of last year. In addition, lower interest payments as the result of our paying down of loans against cash surrender value of insurance policies from a legacy deferred compensation plan of $13.7 million in 2014 and $4.3 million in the current year, improved our cash flow from operations.  Partially offsetting these improvements was lower cash receipts due to lower sales volume.  

11

Cash provided by investing activities was $527,000 in the current nine months with the release of restricted cash.  During the nine month period of 2014, the net cash provided of $10.5 million was the result of  the maturity of a short-term investment of $10.0 million and the release of $547,000 in restricted cash.  In both the current and prior year periods, the release of restricted cash was the result of reductions in outstanding letters of credit required by our insurance companyfor potential workers compensation claims.

Net cash used by financing activities in the first nine months of 2015 was $4.3 million for the pay-down of life insurance policy loans under our legacy deferred compensation plan.  Net cash provided of $2.7 million in the nine month period of 2014 was from loans against the 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. On August 19, 2013, the Federal Circuit issued a decision affirming the dismissal of the claims of two of the four Non-Supporting Producers. On January 3, 2014, the Federal Circuit denied those Non-Supporting Producers’ petitions for rehearing en banc.  On May 2, 2014, these Non-Supporting Producers filed a petition for writ of certiorari, seeking review by the United States Supreme Court.   On October 6, 2014, the Supreme Court denied two of three of the Non-Supporting Producers’ petitions for certiorari review, and on December 15, 2014, the Supreme Court denied the third petition for review.  Accordingly, Customs should not seek or be entitled to obtain a return of our CDSOA distribution received in April 2012.

In November 2012, December 2013, and November 2014 Customs disclosed that it withheld $3.0 million, $6.4 million, and $5.7 million respectively in each of those years, 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 had been resolved.  In March 2015, following the conclusion of all appeals, Customs began distributing the withheld funds to the Supporting Producers.  Our allocated share of the distributed 2012, 2013, and 2014 withheld funds totaled $4.8 million, which we received during late March and early April 2015.  

In November 2014, Customs also had announced that 2014 and 2015 CDSOA distributions were subject to sequestration under the Budget Control Act at the rate of 7.2 percent and 7.3 percent, respectively.  On March 17, 2015, however, the government concluded that the amounts sequestered during Fiscal Year 2014 and Fiscal Year 2015 would become available in the subsequent fiscal year.  Our share of the 2014 sequestered funds, totaling $147,000, was received in April 2015.  

Recently, Customs disclosed that as of April 30, 2015, $626,342 in collected duties was potentially available for distribution in 2015 to eligible manufactures of wooden bedroom furniture.  Customs noted that the final amounts available for distribution in 2015 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 secured duties on unliquidated entries in Customs’ clearing account as of October 1, 2014, 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.  Assuming our percentage allocation in 2015 is the same as it was for the 2014 distributions and that the preliminary amount available for distribution in 2015 does not change, we expect to receive approximately $200,000 in the fourth quarter of 2015, including 2015 sequestered funds.

12

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 2014 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 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,   the inability to raise prices in response to inflation and increasing costs, lower sales due to worsening of current economic conditions, the cyclical nature of the furniture industry,  business failures or loss of large customers, failure to anticipate or respond to changes in consumer tastes, fashions and perceived values in a timely manner, competition in the furniture industry,  environmental, health, and safety  compliance costs, and failure or interruption of our information technology infrastructure.  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.

ITEM 4.  Controls and Procedures

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 September 26, 2015, the end of the period covered by this quarterly report.

Changes in internal controls over financial reporting  

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.  

13

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 3.1 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 Anita W. Wimmer, our Principal 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 Anita W. Wimmer, our Principal 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 26, 2015, formatted in Extensible Business Reporting Language (“XBRL”): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income (loss), (iv) condensed consolidated statements of cash flows, (v) the notes to the consolidated financial statements, and (vi) document and entity information.(1)
(1)	Filed herewith

14

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 27, 2015	STANLEY FURNITURE COMPANY, INC.
	By:	/s/ Anita W. Wimmer
		Anita W. Wimmer
		Vice President of Finance
		(Principal Financial and Accounting Officer)

15

EX-31.1

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 27, 2015	By:	/s/ Glenn  Prillaman
		Glenn  Prillaman
		Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Anita W. Wimmer, 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 27, 2015	By:	/s/ Anita W. Wimmer
		Anita W. Wimmer
		Principal Financial Officer

EX-32.1

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 26, 2015 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 27, 2015	By:	/s/ Glenn  Prillaman
		Glenn  Prillaman
		Chief Executive Officer

EX-32.2

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 26, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anita W. Wimmer, Principal 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 27, 2015	By:	/s/ Anita W. Wimmer
		Anita W. Wimmer
		Principal Financial Officer

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Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance at December 31, 2014			$ 40,979
Net income	$ 465	$ (2,556)	4,423	$ (26,682)
Adjustment to net periodic benefit cost	(6)	$ 20	(18)	$ 59
Balance at September 26, 2015	45,959		45,959
Common Stock [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance at December 31, 2014			$ 283
Net income
Stock-based compensation
Adjustment to net periodic benefit cost
Balance at September 26, 2015	283		$ 283
Additional Paid-in Capital [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance at December 31, 2014			$ 16,710
Net income
Stock-based compensation			$ 539
Adjustment to net periodic benefit cost
Balance at September 26, 2015	17,249		$ 17,249
Retained Earnings [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance at December 31, 2014			26,683
Net income			$ 4,423
Stock-based compensation
Adjustment to net periodic benefit cost
Balance at September 26, 2015	31,106		$ 31,106
AOCI Attributable to Parent [Member]
Stockholders' Equity (Details) - Reconciliation of the activity in Stockholders` Equity accounts [Line Items]
Balance at December 31, 2014			$ (2,697)
Net income
Stock-based compensation
Adjustment to net periodic benefit cost			$ 18
Balance at September 26, 2015	$ (2,679)		$ (2,679)

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Income taxes

9 Months Ended

Sep. 26, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income taxes

During the first nine months of 2015, we utilized $2,979 of our net operating loss carry-forwards against income from the Continued Dumping and Subsidy Offset Act distributed by U.S. Customs and Border Protection in March and April of this year (see Note 7).  The income tax expense recognized during the current nine month period was primarily generated from the federal alternative minimum tax.  The alternative minimum tax limits our ability to offset income generated during the period with net operating loss carry-forwards.  During the first nine months of 2015, we reduced our valuation allowance against deferred tax assets from $21,724 to $20,579 at September 26, 2015.

We maintain a valuation allowance against deferred tax assets that currently exceed our deferred tax liabilities.  The primary assets covered by this valuation allowance are net operating loss carry-forwards. 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 loss in the most recent three-year period, in our view, represented sufficient negative evidence to support 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 $38 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 assets in the future, an adjustment to the deferred tax asset will be charged to income in the period such determination is made.  

Our effective tax rates for the current three and nine month periods were a benefit of 1.8% and an expense of 1.6%, respectively, driven by the impact of the alternative minimum tax outlined above.  The effective tax rate in the prior year three and nine month periods was essentially zero since we had established a valuation allowance for our deferred tax assets in excess of our deferred tax liabilities.  The major reconciling items between our effective income tax rate and the federal statutory rate are the change in our valuation allowance and the cash surrender value on life insurance policies.

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Discontinued Operations (Details) - Net assets for discontinued operations - USD ($) $ in Thousands	Sep. 26, 2015	Dec. 31, 2014
Net assets for discontinued operations [Abstract]
Accounts receivable, net		$ 695
Inventory, net		678
Total assets		1,373
Accounts payable and other liabilities	$ 16	93
Net (liabilities) assets	$ (16)	$ 1,280

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Discontinued Operations (Details) - Loss from discontinued operations, net of taxes - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Loss from discontinued operations, net of taxes [Abstract]
Net sales	$ 16	$ 3,510	$ 554	$ 19,263
Cost of sales	41	4,295	760	36,748
Selling, general and administrative expenses, net	(36)	$ 333	(134)	$ 3,837
Other income	63		63
Income (loss) from discontinued operations before income taxes	$ 74	$ (1,118)	$ (9)	$ (21,322)
Income taxes
Income (loss) from discontinued operations, net of income taxes	$ 74	$ (1,118)	$ (9)	$ (21,322)

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Property, Plant and Equipment

9 Months Ended

Sep. 26, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Property, Plant and Equipment

	September 26,		December 31,
	2015		2014
Machinery and equipment	$	3,847	$	3,883
Leasehold improvements		1,833		1,833
Property, plant and equipment, at cost		5,680		5,716
Less accumulated depreciation		3,829		3,726
Property, plant and equipment, net	$	1,851	$	1,990

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CONSOLIDATED BALANCE SHEEETS - USD ($) $ in Thousands	Sep. 26, 2015	Dec. 31, 2014
Current assets:
Cash	$ 5,577	$ 5,584
Restricted cash	663	1,190
Accounts receivable, less allowances of $464 and $375	6,741	5,853
Inventories:
Finished goods	20,989	23,935
Work-in-process	19	268
Raw materials		13
Total inventories	21,008	24,216
Assets of discontinued operations		1,373
Prepaid expenses and other current assets	827	890
Deferred income taxes	38	66
Total current assets	34,854	39,172
Property, plant and equipment, net	1,851	1,990
Cash surrender value of life insurance policies, net	20,725	15,129
Other assets	3,218	3,416
Total assets	60,648	59,707
Current liabilities:
Accounts payable	3,904	6,425
Liabilities of discontinued operations	16	93
Accrued salaries, wages and benefits	1,569	1,738
Other accrued expenses	413	1,437
Total current liabilities	5,902	9,693
Deferred income taxes	38	66
Pension plans	6,504	6,936
Other long-term liabilities	2,245	2,033
Total liabilities	14,689	18,728
STOCKHOLDERS’ EQUITY
Common stock, $.02 par value, 25,000,000 shares authorized, 14,911,453 and 14,780,326 shares issued and outstanding	283	283
Capital in excess of par value	17,249	16,710
Retained earnings	31,106	26,683
Accumulated other comprehensive loss	(2,679)	(2,697)
Total stockholders’ equity	45,959	40,979
Total liabilities and stockholders’ equity	$ 60,648	$ 59,707

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014
Cash flows from operating activities:
Cash received from customers	$ 42,426	$ 43,868
Cash paid to suppliers and employees	(44,091)	(50,576)
Cash from Continued Dumping and Subsidy Offset Act	4,896
Interest paid, net	(670)	(2,884)
Income taxes paid	(103)
Net cash provided (used) by operating activities	2,458	(9,592)
Cash flows from investing activities:
Decrease in restricted cash	527	547
Sale of short-term securities		10,000
Purchase of other assets		(44)
Net cash provided by investing activities	527	10,503
Cash flows from financing activities:
Payments on insurance policy loans	(4,279)
Proceeds from insurance policy loans		2,701
Net cash (used) provided by financing activities	(4,279)	2,701
Cash flows from discontinued operations:
Cash provided by operating activities	1,287	4,271
Cash provided by investing activities		3,479
Net cash provided by discontinued operations	1,287	7,750
Net (decrease) increase in cash	(7)	11,362
Cash at beginning of period	5,584	7,218
Cash at end of period	5,577	18,580
Reconciliation of net income (loss) to net cash provided (used) by operating activities:
Net income (loss)	4,423	(26,682)
Loss from discontinued operations	9	21,322
Depreciation and amortization	352	408
Stock-based compensation	539	634
Changes in assets and liabilities:
Accounts receivable	(888)	(580)
Inventories	3,208	922
Prepaid expenses and other assets	(1,253)	(3,076)
Accounts payable	(2,521)	(2,413)
Accrued salaries, wages and benefits	(161)	455
Other accrued expenses	(1,030)	284
Other long-term liabilities	(220)	(866)
Net cash provided (used) by operating activities	$ 2,458	$ (9,592)

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Employee Benefit Plans (Details) - Components of other postretirement benefit cost - Other Postretirement Benefit Plan [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Employee Benefit Plans (Details) - Components of other postretirement benefit cost [Line Items]
Interest cost	$ 70	$ 75	$ 210	$ 224
Amortization of prior service benefit	(23)	(38)	(69)	(115)
Amortization of actuarial loss	29	18	87	56
Net periodic postretirement benefit cost	$ 76	$ 55	$ 228	$ 165

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Stockholders' Equity (Details) - Basic and Diluted Earnings Per Share Calculation - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Basic and Diluted Earnings Per Share Calculation [Abstract]
Weighted average shares outstanding for basic calculation	14,285	14,209	14,260	14,185
Add: Effect of dilutive stock awards	263		271
Weighted average shares outstanding, adjusted for diluted calculation	14,548	14,209	14,531	14,185

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Preparation of Interim Unaudited Consolidated Financial Statements

9 Months Ended

Sep. 26, 2015

Disclosure Text Block [Abstract]

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

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.

Results of the discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all periods presented, unless otherwise noted.

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CONSOLIDATED BALANCE SHEEETS (Parentheticals) - USD ($) $ in Thousands	Sep. 26, 2015	Dec. 31, 2014
Allowances (in Dollars)	$ 464	$ 375
Common stock par value (in Dollars per share)	$ 0.02	$ 0.02
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	14,911,453	14,780,326
Common stock, shares outstanding	14,911,453	14,780,326

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 26, 2015

Stockholders' Equity Note [Abstract]

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

	Three Months		Nine Months
	Ended		Ended
	Sept. 26,	Sept. 27,	Sept. 26,	Sept. 27,
	2015	2014	2015	2014
Weighted average shares outstanding for basic calculation	14,285	14,209	14,260	14,185
Add: Effect of dilutive stock awards	263	-	271	-
Weighted average shares outstanding,  adjusted for diluted calculation	14,548	14,209	14,531	14,185

Schedule of Stockholders Equity [Table Text Block]

							Accumulated
			Capital in				Other
	Common		Excess of		Retained		Comprehensive
	Stock		Par Value		Earnings		Loss
Balance at December 31, 2014	$	283	$	16,710	$	26,683	$	(2,697)
Net income		-		-		4,423		-
Stock-based compensation		-		539		-		-
Adjustment to net periodic benefit cost		-		-		-		18
Balance at September 26, 2015	$	283	$	17,249	$	31,106	$	(2,679)

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Document And Entity Information - shares	9 Months Ended
	Sep. 26, 2015	Oct. 23, 2015
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		14,911,453
Amendment Flag	false
Entity Central Index Key	0000797465
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 26, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Restructuring and Related Charges (Tables)

9 Months Ended

Sep. 26, 2015

Restructuring and Related Activities [Abstract]

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

	Lease Obligations
Accrual at January 1, 2015	$	480
Charges to expense		-
Cash payments		(360)
Accrual at September 26, 2015	$	120

	Lease Obligations		Severance and other termination costs		Total
Accrual at January 1, 2014	$	488	$	169	$	657
Charges to expense		354		(39)		315
Cash payments		(242)		(116)		(358)
Accrual at September 27, 2014	$	600	$	14	$	614

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Net sales	$ 13,760	$ 13,928	$ 43,565	$ 44,603
Cost of sales	10,350	11,304	33,333	36,316
Gross profit	3,410	2,624	10,232	8,287
Selling, general, and administrative expenses	2,823	3,294	9,921	11,755
Operating income (loss)	$ 587	$ (670)	311	$ (3,468)
Income from Continued Dumping and Subsidy Offset Act, net			4,896
Other income, net	$ 12	$ 24	52	$ 336
Interest expense, net	216	802	756	2,259
Income (loss) from continuing operations before taxes	383	(1,448)	4,503	(5,391)
Income tax (benefit) expense	(8)	(10)	71	(31)
Net income (loss) from continuing operations	391	(1,438)	4,432	(5,360)
Net income (loss) from discontinued operations	74	(1,118)	(9)	(21,322)
Net income (loss)	$ 465	$ (2,556)	$ 4,423	$ (26,682)
Basic income (loss) per share:
Income (loss) from continuing operations (in Dollars per share)	$ 0.03	$ (0.10)	$ 0.31	$ (0.38)
Income (loss) from discontinued operations (in Dollars per share)		(0.08)		(1.50)
Net income (loss) (in Dollars per share)	$ 0.03	(0.18)	$ 0.31	(1.88)
Diluted income (loss) per share:
Income (loss) from continuing operations (in Dollars per share)	$ 0.03	(0.10)	$ 0.30	(0.38)
Income (loss) from discontinued operations (in Dollars per share)		(0.08)		(1.50)
Net income (loss) (in Dollars per share)	$ 0.03	$ (0.18)	$ 0.30	$ (1.88)
Weighted average shares outstanding:
Basic (in Shares)	14,285	14,209	14,260	14,185
Diluted (in Shares)	14,548	14,209	14,531	14,185

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Restructuring and Related Charges

9 Months Ended

Sep. 26, 2015

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Restructuring and Related Charges

During 2014, we completed the exit of our Stanleytown warehouse facility and took a charge for the remaining payments on the lease, which expires in December 2015.

During 2013, we recorded restructuring charges in selling, general and administrative expenses for severance and relocation costs associated with the consolidation of our corporate office and High Point showroom into a single multi-purpose facility.  All of these expenses were paid out in 2014.

Restructuring accrual activity for the nine months ended September 26, 2015 was as follows:

	Lease Obligations
Accrual at January 1, 2015	$	480
Charges to expense		-
Cash payments		(360)
Accrual at September 26, 2015	$	120

Restructuring accrual activity for the nine months ended September 27, 2014 was as follows:

	Lease Obligations		Severance and other termination costs		Total
Accrual at January 1, 2014	$	488	$	169	$	657
Charges to expense		354		(39)		315
Cash payments		(242)		(116)		(358)
Accrual at September 27, 2014	$	600	$	14	$	614

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

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Stockholders' Equity

9 Months Ended

Sep. 26, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

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. 26,	Sept. 27,	Sept. 26,	Sept. 27,
	2015	2014	2015	2014
Weighted average shares outstanding for basic calculation	14,285	14,209	14,260	14,185
Add: Effect of dilutive stock awards	263	-	271	-
Weighted average shares outstanding,  adjusted for diluted calculation	14,548	14,209	14,531	14,185

In the three and nine month periods ended September 26, 2015, approximately 1,352 and 1,376 stock awards respectively, were excluded from the diluted per share calculation as they would be anti-dilutive.  In the 2014 three and nine month periods, the dilutive effect of stock options is not recognized since we had a net loss.  Approximately 1,639 shares in the three and nine month periods of 2014 were issuable upon the exercise of stock options, which were not included in the diluted per share calculation because they were anti-dilutive.  Also, 544 shares in 2014 of restricted stock were not included because they were anti-dilutive.

A reconciliation of the activity in Stockholders’ Equity accounts for the first nine months ended September 26, 2015 is as follows:

							Accumulated
			Capital in				Other
	Common		Excess of		Retained		Comprehensive
	Stock		Par Value		Earnings		Loss
Balance at December 31, 2014	$	283	$	16,710	$	26,683	$	(2,697)
Net income		-		-		4,423		-
Stock-based compensation		-		539		-		-
Adjustment to net periodic benefit cost		-		-		-		18
Balance at September 26, 2015	$	283	$	17,249	$	31,106	$	(2,679)

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Stockholders' Equity (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Employee Stock Option [Member]
Stockholders' Equity (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,352	1,639	1,376	1,639
Restricted Stock [Member]
Stockholders' Equity (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				544

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Discontinued Operations (Tables)

9 Months Ended

Sep. 26, 2015

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement [Table Text Block]

	Three Months				Nine Months
	Ended				Ended
	Sept. 26,		Sept. 27,		Sept. 26,		Sept. 27,
	2015		2014		2015		2014
Net sales	$	16	$	3,510	$	554	$	19,263
Cost of sales		41		4,295		760		36,748
Selling, general and administrative expenses, net		(36)		333		(134)		3,837
Other income		63		-		63		-
Income (loss) from discontinued operations before income taxes		74		(1,118)		(9)		(21,322)
Income taxes		-		-		-		-
Income (loss) from discontinued operations, net of income taxes	$	74	$	(1,118)	$	(9)	$	(21,322)

Schedule of Disposal Groups, Including Discontinued Operations Balance Sheet [Table Text Block]

	September 26,		December 31,
	2015		2014
Accounts receivable, net	$	-	$	695
Inventory, net		-		678
Total assets		-		1,373
Accounts payable and other liabilities		16		93
Net (liabilities) assets	$	(16)	$	1,280

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Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 26, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	September 26,		December 31,
	2015		2014
Machinery and equipment	$	3,847	$	3,883
Leasehold improvements		1,833		1,833
Property, plant and equipment, at cost		5,680		5,716
Less accumulated depreciation		3,829		3,726
Property, plant and equipment, net	$	1,851	$	1,990

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Income from Continued Dumping and Subsidy Offset Act (CDSOA)

9 Months Ended

Sep. 26, 2015

Income For Continued Dumping And Subsidy Offset Act [Abstract]

Income For Continued Dumping And Subsidy Offset Act [Text Block]

Income from Continued Dumping and Subsidy Offset Act (CDSOA)

We recorded income of $4,896 in the nine month period ended September 26, 2015, respectively, from CDSOA distributions previously withheld by Customs pending resolution of non-supporting producers’ claims seeking to share in these distributions.  No funds were received in the current year three month period or in the prior year nine month period.  

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Discontinued Operations

9 Months Ended

Sep. 26, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

During the second quarter of 2014, we concluded that revenue on our Young America product line remained below the level needed to reach profitability and that the time frame needed to assure sustainable profitability was longer than we felt was economically justified.  Therefore, we made the decision to cease manufacturing operations at our Robbinsville, North Carolina facility and sell the related assets of this facility.  Manufacturing operations were ceased in the third quarter of 2014 and as a result this product line was reflected as a discontinued operation pursuant to the provisions of Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08) for all periods presented.   

Income (loss) from discontinued operations, net of taxes, is comprised of the following:

	Three Months				Nine Months
	Ended				Ended
	Sept. 26,		Sept. 27,		Sept. 26,		Sept. 27,
	2015		2014		2015		2014
Net sales	$	16	$	3,510	$	554	$	19,263
Cost of sales		41		4,295		760		36,748
Selling, general and administrative expenses, net		(36)		333		(134)		3,837
Other income		63		-		63		-
Income (loss) from discontinued operations before income taxes		74		(1,118)		(9)		(21,322)
Income taxes		-		-		-		-
Income (loss) from discontinued operations, net of income taxes	$	74	$	(1,118)	$	(9)	$	(21,322)

In the current year three month period, income from discontinued operations resulted from better realization on assets than originally estimated.  In the current nine month period, the loss from discontinued operations is from cost related to the final disposition of inventory.  In the prior year, losses from discontinued operations included accelerated depreciation and amortization, write-down of inventories and other assets, severance and other termination costs and operating losses related to final manufacturing production.

Net assets for discontinued operations are as follows:

	September 26,		December 31,
	2015		2014
Accounts receivable, net	$	-	$	695
Inventory, net		-		678
Total assets		-		1,373
Accounts payable and other liabilities		16		93
Net (liabilities) assets	$	(16)	$	1,280

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 26, 2015

Compensation and Retirement Disclosure [Abstract]

Schedule of Costs of Retirement Plans [Table Text Block]

	ThreeMonths				Nine Months
	Ended				Ended
	Sept. 26,		Sept. 27,		Sept. 26,		Sept. 27,
	2015		2014		2015		2014
Interest cost	$	70	$	75	$	210	$	224
Amortization of prior service benefit		(23)		(38)		(69)		(115)
Amortization of actuarial loss		29		18		87		56
Net periodic postretirement benefit cost	$	76	$	55	$	228	$	165

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Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Operating Loss Carryforwards	$ 2,979		$ 2,979
Deferred Tax Assets, Valuation Allowance	20,579		20,579		$ 21,724
Deferred Tax Assets, Net, Current	$ 38		$ 38
Effective Income Tax Rate Reconciliation, Percent	1.80%	0.00%	1.60%	0.00%

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Restructuring and Related Charges (Details) - Restructuring accrual activity - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual		$ 657
Charges to expense		315
Cash payments		(358)
Accrual		614
Lease Obligations [Member]
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual	$ 480	488
Charges to expense		354
Cash payments	$ (360)	(242)
Accrual	$ 120	600
Severance And Other Termination Costs [Member]
Restructuring and Related Charges (Details) - Restructuring accrual activity [Line Items]
Accrual		169
Charges to expense		(39)
Cash payments		(116)
Accrual		$ 14

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Net income (loss)	$ 465	$ (2,556)	$ 4,423	$ (26,682)
Other comprehensive income (loss):
Amortization of prior service cost	23	38	69	115
Amortization of actuarial loss	(29)	(18)	(87)	(56)
Adjustments to net periodic benefit cost	(6)	20	(18)	59
Comprehensive income (loss)	$ 471	$ (2,576)	$ 4,441	$ (26,741)

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Employee Benefit Plans

9 Months Ended

Sep. 26, 2015

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Employee Benefit Plans

Components of other postretirement benefit cost:

	ThreeMonths				Nine Months
	Ended				Ended
	Sept. 26,		Sept. 27,		Sept. 26,		Sept. 27,
	2015		2014		2015		2014
Interest cost	$	70	$	75	$	210	$	224
Amortization of prior service benefit		(23)		(38)		(69)		(115)
Amortization of actuarial loss		29		18		87		56
Net periodic postretirement benefit cost	$	76	$	55	$	228	$	165

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Income from Continued Dumping and Subsidy Offset Act (CDSOA) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2015	Sep. 27, 2014	Sep. 26, 2015	Sep. 27, 2014
Income For Continued Dumping And Subsidy Offset Act [Abstract]
Income from Continued Dumping and Subsidy Offset Act, net			$ 4,896

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Property, Plant and Equipment (Details) - Property, Plant and Equipment - USD ($) $ in Thousands	Sep. 26, 2015	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Machinery and equipment	$ 3,847	$ 3,883
Leasehold improvements	1,833	1,833
Property, plant and equipment, at cost	5,680	5,716
Less accumulated depreciation	3,829	3,726
Property, plant and equipment, net	$ 1,851	$ 1,990