Stanley sales fall 16.7% in first quarter

Earnings down 37.4% as demand weakens

From Furniture Today -- Kids Today, 4/17/2008 1:40:00 PM

By Larry Thomas

STANLEYTOWN, Va. — Case goods major Stanley Furniture said sales fell 16.7% in the first quarter, with consumer demand growing weaker as the period progressed.

Net income, including one-time restructuring charges of $164,000, was 37.4% below last year’s first quarter.

“Despite the most challenging environment our industry has experienced in perhaps a generation, we remain profitable and have a strong financial position,” said Jeff Scheffer, president and CEO. “I am confident we have a mission that differentiates us from the competition, a strategy that provides for profitable growth, and an enthusiastic and engaged management team that is preparing the company for the eventual upturn in business.”

Net sales for the quarter ended March 29 were $62.5 million, compared with $75.1 million in the same period last year. Net income was $1.05 million or 10 cents per share, compared with $1.68 million or 15 cents per share in last year’s first quarter.

Scheffer said demand became noticeably weaker in mid-March, and said weakness in housing-related areas appears to be spreading to other sectors of the economy.

As a result, Stanley has cut its sales and earnings forecasts for the year. The company now believes sales will be $233 million to $243 million for 2008, down from $282.2 million in 2007 and below the earlier 2008 forecast of $255 million to $268 million.

New earnings projections are 27 cents to 38 cents per share, excluding one-time charges. That’s down from 40 cents to 60 cents per share in its earlier forecast.

Last year, Stanley had earnings of 54 cents per share, excluding one-time charges and income from antidumping duties.