Exhibit 99.1
FOR IMMEDIATE RELEASE: CONTACT: DOUGLAS I. PAYNE
February 7, 2005 Executive Vice President - Finance
and Administration
(276)627-2157
e-mail:dpayne@stanleyfurniture.com
ANITA W. WIMMER
Vice President, Controller and Treasurer
(276) 627-2446
e-mail: awimmer@stanleyfurniture.com
STANLEY FURNITURE ANNOUNCES
FOURTH QUARTER AND TOTAL YEAR
2004 OPERATING RESULTS
Record Fourth Quarter Sales and Earnings; 20% Increase In Quarterly Cash
Dividend
STANLEYTOWN, VA, February 7, 2005/PRNewswire/ -- Stanley Furniture Company, Inc.
(Nasdaq-NNM: STLY) today reported higher sales and earnings for the fourth
quarter and year ended December 31, 2004. Both sales and earnings slightly
exceeded the high end of management's previous guidance provided in mid-October
2004. The Company also announced today that its Board of Directors approved a
20% increase in its quarterly cash dividend to stockholders.
Net sales of $83.3 million increased 12.4% and earnings per share grew 22.9% to
$.86 from the fourth quarter of last year setting a new sales and earnings
record from any previous quarter in the Company's history. This marks the
eleventh consecutive quarter of sales growth over the comparable prior year
quarter and the fifth consecutive quarter of double digit sales gains over the
comparable prior year quarter.
Net sales of $305.8 million for total year 2004 increased 15.3% from the prior
year. Earnings per share improved 35.5% to $3.17 in 2004 compared to $2.34 in
2003.
Operating income for 2004 improved to $34.7 million, or 11.3% of net sales, from
$26.2 million, or 9.9% of net sales, for the prior year. Higher sales, increased
production levels at the Company's domestic facilities, although at a slower
growth rate than sales due to the expansion of sourced items, and savings from
sourcing initiatives drove the improvement. These improvements were partially
offset by inflation in raw materials, compensation costs, energy costs, higher
selling expenses, tariffs imposed on wooden bedroom furniture imported from
China, and costs of complying with the Sarbanes-Oxley Act.
Strong cash flow from operations for 2004 was used to reduce debt $7.0 million,
pay cash dividends of $2.5 million, and increase cash on hand by $5.1 million.
Approximately $10.2 million remains authorized by the Company's Board of
Directors to repurchase shares of the Company's common stock. Total debt
outstanding was $15.7 million and cash on hand was $7.6 million at December 31,
2004.
Increase in Cash Dividend
The Company announced today that its Board of Directors approved a 20% increase
in its quarterly dividend to $.12 per share payable on March 7, 2005, to
shareholders of record on February 18, 2005. "Increasing the amount of the cash
dividend further demonstrates the Board's confidence in the Company's strategy,
growth opportunities and financial strength," noted Albert L. Prillaman,
chairman.
Business Outlook
"We are pleased to report another year of significant progress," commented
Jeffrey R. Scheffer, president and chief executive officer. "While industry
sales trends improved in 2004, we believe market share gains are driving most of
our sales growth. Blending efficient domestic manufacturing in our highly
focused facilities with intelligent outsourcing of certain component parts and
finished goods has allowed us to improve the styling and value of our products.
Combining this with our culture and reputation for high quality and fast
delivery differentiates us from our competition. We enter 2005 with considerable
momentum and anticipate another good year."
Management offers the following guidance for total year 2005.
o Net sales are expected to be in the range of $321 million to $331 million, an
increase of 5% to 8% over the prior year. o Operating income is expected to be
in the range of $37.8 million to $38.8 million. o The Company's effective tax
rate is expected to be in the range of 35.5% to 36.0% in 2005. o Earnings per
share are expected to be in the range of $3.45 to $3.55 compared to $3.17 for
2004.
Management offers the following guidance for the quarter ending April 2, 2005.
o Net sales are expected to be in the range of $79.0 million to
$81.5 million, an increase of 10% to 14% over the first
quarter of 2004.
o Operating income is expected to be in the range of $8.6 million to
$9.1 million.
o Earnings per share are expected to be in the range of $.78 to $.83
compared to $.71 in the year-ago quarter.
Management Succession Plans
The Company also announced today that Albert L. Prillaman plans to retire from
active management in April 2005, as the conclusion of the management succession
plan that began in 2001. At such time it is anticipated that Jeffrey R. Scheffer
will be elected Chairman of the Board in addition to his current role as
President and Chief Executive Officer. Mr. Prillaman plans to continue as a
director and to stay involved with the Company by serving as lead director and
liaison with the board on oversight matters and key strategic initiatives.
Other Information
All earnings per share amounts are on a diluted basis.
Shipping revenues have historically been netted against related expenses in cost
of sales. The Company has reclassified these revenues to net sales resulting in
no impact on earnings.
Established in 1924, Stanley Furniture Company, Inc. is a leading manufacturer
of wood furniture targeted at the upper-medium price range of the residential
market. Manufacturing facilities are located in Stanleytown and Martinsville,
Va. and Robbinsville and Lexington, N.C. Its common stock is traded on the
Nasdaq stock market under the symbol STLY.
Conference Call Details
The Company will host a conference call Tuesday morning, February 8, at 9:00
a.m. Eastern Time. The call will also be web cast live and archived on the
Company's web site at www.stanleyfurniture.com. The dial-in-number is (877)
407-8029. A replay will be available through February 14, 2005. The
dial-in-number for the replay is (877) 660-6853, the account reference number
is 6721 and the conference number is 117481.
Forward-Looking Statements
Certain statements made in this release 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," or "anticipates" or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy. These
statements reflect the Company's 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 competition in the furniture industry including
competition from lower-cost foreign manufacturers, the Company's success in
executing its blended strategy of combining offshore sourcing and domestic
manufacturing, disruptions in offshore sourcing including those arising from
supply or distribution disruptions or changes in political or economic
conditions affecting the countries from which the Company obtains offshore
sourcing, international trade policies of the United States and countries from
which the Company obtains offshore sourcing, the cyclical nature of the
furniture industry, fluctuations in the price for lumber which is the most
significant raw material used by the Company, fluctuations in foreign freight
cost, credit exposure to customers, capital costs and general economic
conditions. Future dividend payments will depend upon the financial condition,
capital requirements and earnings of the Company, as well as other factors that
the Board of Directors may deem relevant. Any forward-looking statement speaks
only as of the date of this press release, and the Company undertakes no
obligation to update or revise any forward-looking statements, whether as a
result of new developments or otherwise.
TABLES FOLLOW
STANLEY FURNITURE COMPANY, INC.
Consolidated Operating Results
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2004 2003 2004 2003
------- ------- -------- --------
Net sales ............................. $83,269 $74,052 $305,815 $265,263
Cost of sales ......................... 62,509 57,027 230,174 203,410
------- ------- -------- --------
Gross profit ...................... 20,760 17,025 75,641 61,853
Selling, general and administrative
expenses .............................. 11,361 9,554 40,953 35,637
------- ------- -------- --------
Operating income .................... 9,399 7,471 34,688 26,216
Other income, net ..................... (43) (53) (188) (203)
Interest expense ...................... 556 679 2,343 2,748
------- ------- -------- --------
Income before income taxes ......... 8,886 6,845 32,533 23,671
Income taxes .......................... 3,200 2,413 11,744 8,521
------- ------- -------- --------
Net income .......................... $ 5,686 $ 4,432 $ 20,789 $ 15,150
======= ======= ======== ========
Diluted earnings per share ............ $ 0.86 $ 0.70 $ 3.17 $ 2.34
======= ======= ======== ========
Weighted average number of shares ..... 6,642 6,322 6,549 6,462
======= ======= ======== ========
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
Dec 31, Dec 31,
2004 2003
-------- --------
Assets
Current assets:
Cash ............................................. $ 7,632 $ 2,509
Accounts receivable, net ......................... 36,036 30,120
Inventories ...................................... 73,658 54,638
Prepaid expenses and other current assets ........ 1,585 2,855
Deferred income taxes ............................ 2,414 2,855
-------- --------
Total current assets ......................... 121,325 92,977
Property, plant, and equipment, net ................... 51,342 55,154
Goodwill .............................................. 9,072 9,072
Other assets .......................................... 7,149 7,000
-------- --------
Total assets ................................. $188,888 $164,203
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt ............. $ 4,257 $ 7,014
Accounts payable ................................. 16,056 10,595
Accrued expenses ................................. 12,445 10,913
-------- --------
Total current liabilities .................... 32,758 28,522
Long-term debt ........................................ 11,428 15,686
Deferred income taxes ................................. 10,742 12,560
Other long-term liabilities ........................... 6,695 4,877
Stockholders' equity .................................. 127,265 102,558
-------- --------
Total liabilities and stockholders' equity ... $188,888 $164,203
======== ========
STANLEY FURNITURE COMPANY, INC.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Twelve Months Ended
Dec 31, Dec 31,
2004 2003
--------- ---------
Cash flows from operating activities:
Cash received from customers ........................ $ 300,429 $ 263,211
Cash paid to suppliers and employees ................ (278,509) (236,334)
Interest paid ....................................... (2,387) (2,793)
Income taxes paid, net .............................. (9,061) (9,740)
--------- ---------
Net cash provided by operating activities ......... 10,472 14,344
--------- ---------
Cash flows from investing activities:
Capital expenditures ................................ (1,718) (1,243)
Other, net .......................................... (135) (104)
--------- ---------
Net cash used by investing activities ............. (1,853) (1,347)
--------- ---------
Cash flows from financing activities:
Repayment of senior notes ........................... (7,015) (6,914)
Purchase and retirement of common stock ............. (14,788)
Dividends paid ...................................... (2,517) (1,261)
Proceeds from insurance policy loans ................ 993 888
Proceeds from exercise of stock options ............. 5,043 2,360
--------- ---------
Net cash used by financing activities ............. (3,496) (19,715)
--------- ---------
Net increase (decrease) in cash ...................... 5,123 (6,718)
Cash at beginning of period ........................... 2,509 9,227
--------- ---------
Cash at end of period ............................... $ 7,632 $ 2,509
========= =========
Reconciliation of net income to
net cash provided by operating activities:
Net income ........................................ $ 20,789 $ 15,150
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................... 5,622 5,783
Deferred income taxes ........................... (1,324) (463)
(Gain) Loss on sale of assets ................... (3) 2
Changes in working capital ...................... (16,357) (6,403)
Other assets .................................... 66 57
Other long-term liabilities ..................... 1,679 218
--------- ---------
Net cash provided by operating activities ........... $ 10,472 $ 14,344
========= =========