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Stanley Furniture Company, Inc. Message Board

  • microcaptrader microcaptrader May 1, 2014 12:03 AM Flag

    Important take-aways from the earnings report...


    "The company’s Stanley brand continued to prove its potential with double digit order growth during the first quarter and a strong book of new orders. “Our Stanley business is growing and profitable. We are successfully launching new products into the marketplace each quarter. The company remains debt-free with a healthy balance sheet,” stated Prillaman."

    "The company expects cash restructuring charges mostly consisting of severance and other termination costs to occur mostly in the third quarter and range from $500,000 to $900,000. The company also expects to receive additional proceeds from the sale of property, plant and equipment, which has a book value of approximately $18 million."

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    • Stanley is completely WRONG about the recovery value for its Robbinsville plant. While the book value of the palnt and equipment is approx. $18 million, they will be very lucky if they net 10 cents on the dollar for the equipment and 50 cents on the dollar for the real-estate. The equipment book value is approx. $8 million and $10 million for buildings and real-estate.

      The new owners of the bk'd Furniture Brands has listed 18 properties, including 10 manufacturing facilities, along with all equipment, for liquidation. The market for used equipment and empty manufacturing facilites is already over saturated with equipment and real-estate.

      Equipment: approx. 20-25% of book value includes sales taxes, load-in (freight from Italy, import taxes and delivery), and personnel training -- NO RECOVERY, complete write-off. Further, a significant portion, I'll estimate $1 million for upgrades (labor/materials/equipment) of their dust-collecting ducts, air compressors, and bag house. That leave approx. $5 million of book value equipment available for liquidation.

      Used equipment 3-6 years-old CAD CNC machines and shapers are netting 10-15 cents on the dollar (net of selling expense and broker fees). Realistic recovery on Robbinsville equipment -- $500,000 - $750,000.

      For the building and land, there are so many former furniture manufacturing operations available in North Carolina and surrounding areas, I estimate they would be luck to net 50 cents on the dollar after broker fees, closing costs, and environmental indemnifications. At best, they will net $5 million on the plant/land.

      Total estimated recovery of plant/land and equipment for Robbinsville is $5.5 million to $5.75 million. In other words, at $18 million management is banding about is really less than a third of their realizable values. That is $12 million less than managements on-going misleading and inaccurate reportings.

    • It appears that STLY will have a large quarterly loss as they close out Young America. After that and some severance charges the real question is what does the company look like and can this management CHOP/GUT sga expense to produce at least a breakeven entity at the new sales level. The Stanley line may be profitable but I doubt it covers sga expense.

      Liquidity short term doesn't really seem an issue if they sell the assets and product line even at a significant discount to book value. I still think they may also get some dumping money.

      But this management hasn't shown me they have the balls to run a profitable company or make really hard and decisive actions. They should bring in someone to chop this down to size quickly with the goal of either being profitable or an action plan to make it happen. I suspect after all these moves they will go BUY another line to ATTEMPT profitability again. Do you want current management attempting to RE-VISION the company again? They haven't shown me much. As I said before a company with excess cash and bad management is usually left with only bad management.

      Anyone see it differently?

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