Stanley Expects Tough 3rd Quarter
September 15, 2009Stanley Furniture Co. (Nasdaq-NGS: STLY), Stanleytown, Va., announced Tuesday that it expects operating results for the third quarter of 2009 to be worse than the second quarter of 2009, with lower sales and an increased operating loss.
The anticipated higher operating loss stems from the disruption caused by the transition of approximately one-third of the company's Young America products from off-shore sourcing to its own domestic manufacturing facilities, lower sales, and an estimated $900,000 of accelerated depreciation due to a previously announced warehouse consolidation.
"The decision to bring all Young America production back to our own domestic facilities was necessary to regain control of the entire production process so we can reposition Young America as the trusted children's furniture brand for safety, broad selection, quick delivery and environmental commitment," said Glenn Prillaman, president and chief operating officer. "While near term this move will be disruptive to our operating results, we expect the long term impact to be very beneficial as we clearly distinguish our Young America product line from competition in the marketplace. This does not impact our blended strategy of combining domestic manufacturing with global sourcing for adult product lines."
"We believe our sales performance is indicative of consumer demand for residential wood furniture
in our price segment," commented Chairman and CEO Albert Prillaman. "Demand for better goods continues to bump along at very depressed levels. We remain confident that the actions we are taking will better position the company for sales growth and improved operating results as we eventually exit this recessionary period."
Stanley Furniture expects to release its third quarter 2009 financial results after the market close on Oct. 14. Management will host a conference call at 9 a.m. EST on Oct. 15. The dial-in number is (877) 407-8029. The call will also be Web cast and archived on the company's Web site, www.stanleyfurniture.com.
