Stanley reports 3.6% drop in sales in second quarter
July 25, 2017,
HIGH POINT – Stanley Furniture reported a decrease in sales but an increase in profitability for the second quarter ended July 1.
For the quarter, the company had $11.6 million in net sales, down 3.6% from the $12.1 million reported during the second quarter of 2016. The company’s net income during the period was $14,000, compared to a net loss of $1.4 million during last year’s second quarter. The company attributed this increase in profitability to lower discounting as well as cost reductions within the organization.
Year to date, the company had $22.8 million in net sales, down 3.9% from $23.7 million during last year’s first half. During the period, it also narrowed its net loss to $402,000, compared to a net loss of $2.9 million during last year’s second half. SG&A expenses were $5.4 million during the first half, or 23.7% of net sales, compared to $6.8 million, or 28.7% of net sales during the first half of 2016.
“We continue to see the signs of an inflection point in the recovery of our business with another quarter of sequential improvements in sales, gross profits and income,” said Glenn Prillaman, president and CEO, in reference to a 3.8% increase in sales over the first quarter of 2017.
The quarterly report also noted that the company remains debt free, with cash, including $631,000 in restricted cash, totaling $5.2 million, up $288,000 from year end.
The company said that working capital decreased $794,000 as inventories fell $2 million since year end, which was partially offset by an increase in accounts receivables of $1.1 million.
“The business is now essentially break even despite missing desired sales growth,” Prillaman added. “We remain debt free. We have sufficient cash to serve customers through inventory investments, which should result in continued sequential revenue growth.”
He noted that newer, “more marketable” product introductions developed over the past two years, but not previously seen by consumers also began to sell late in the quarter.
“We and our wholesale customers are pleased with initial results, and we expect to slowly grow revenues and demonstrate slight profitability over the remainder of 2017 as inventory availability improves.”
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