• Thomas Russell

Stanley reports 3.6% drop in sales in second quarter

Company reports $14,000 in net income compared to $1.4 million net loss in prior-year quarter

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.

During the quarter, the company narrowed its selling, general and administrative expenses to $2.7 million, or 23.6% of net sales, from $3.5 million, or 29.1% of net sales during last year’s second quarter.

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.”

Thomas RussellThomas Russell | Associate Editor, Furniture Today
trussell@furnituretoday.com

I'm Tom Russell and have worked at Furniture/Today since August 2003. Since then, I have covered the international side of the business from a logistics and sourcing standpoint. Since then, I also have visited several furniture trade shows and manufacturing plants in Asia, which has helped me gain perspective about the industry in that part of the world. As I continue covering the import side of the business, I look forward to building on that knowledge base through conversations with industry officials and future overseas plant tours. From time to time, I will file news and other industry perspectives online and, as always, welcome your response to these Web postings.

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