Stanley Furniture Company reported sales and operating results for the fourth quarter and total year ending December 31, 2013.
Fourth quarter 2013 highlights:
• Net sales were $22.7 million compared to $23.4M in the fourth quarter of 2012.
• Gross margin declined to 6.3% of net sales compared to 9.3% in the fourth quarter of 2012.
• Selling, general and administrative expenses were $5.1 million (22.2% of net sales) compared to $4.6 million (19.6%) in the fourth quarter of 2012, excluding current period restructuring charges.
• Operating loss was $3.9 million compared to a loss of $2.4 million in fourth quarter of 2012.
• As of December 31, 2013, the company's financial position reflected $19.0 million in cash,restricted cash and short-term investments.
Total Year 2013 highlights:
• Net sales were $96.9 million compared to $98.6 million in 2012. Decline in sales was primarily due to lower unit volume for the Stanley Furniture product line, offset partially by higher average selling prices for that product line and higher sales and unit volume from the Young America product line.
• Gross margin declined to 10.1% of net sales compared to 12.4% in 2012, due to higher discounting and inflation on both sourced items and raw materials.
• Selling, general and administrative expenses were $19.2 million (19.8% of net sales) compared to $18.3 million (18.6% of net sales) in 2012, excluding current year restructuring charges. The higher costs were related to new showrooms and operating systems.
• Operating loss was $10.2 million compared to a loss of $6.1 million in 2012.
• Capital expenditures, leasehold improvements and investment in new operating systems totaled $5.1 million during 2013 compared to $6.6 million in 2012.
Overview
"Retail activity in the last three months of the year proved to be weaker than anticipated. We believe this is primarily a result of overall industry conditions within the casegoods sector of the industry. Though our operational performance improved throughout the period, retail traffic slowed as the quarter progressed," shared Glenn Prillaman, President & Chief Executive Officer. "However, we would have shown year-overyear sales growth in the quarter if not for a delay in shipping our newest major introduction in our Stanley product line, now being delivered to customers."
Outlook
"As we have said, the capital expenditures associated with restructuring the company and its brands to position them for growth are behind us," continued Prillaman. "Our team has also overcome the operational challenges associated with the structural changes that negatively affected service to customers. As order rates begin to grow, we are positioned to generate sales results quicker than we have in recent years."
"New product will also drive sales growth. Last year we focused much time and effort on the final hurdles of our company's transition. Consolidating corporate offices, constructing new showrooms and implementing modern operating systems did not allow our organization the bandwidth necessary to bring a normal amount of new introductions to market. This year we have an aggressive product introduction plan scheduled and remain focused on market share gains as we enable our customers to build on their confidence in our brands and our ability to execute. I expect the first half of this year to validate the hard work our team has put into positioning our company within our segment of the market and reward the loyalty many customers have shown us. Our shareholders, suppliers, customers and associates have waited patiently for our return to growth and profitability, and we look forward to progressing toward that end over the coming quarters," concluded Prillaman.
