Stanley Swoons: Fool by Numbers

On Jan. 28, wood furniture designer and longtime Motley Fool Hidden Gems recommendation Stanley Furniture (Nasdaq: STLY  ) released earnings for the 2007 fiscal year, ended Dec. 31.

  • The popped housing bubble hit hard, as you can plainly see from these results.
  • Oh, look! A healthy cash balance! ... which came from a not-so-healthy new debt load. So much for that bright spot.
  • Management is hoping for a market bounce, but prepares for even worse conditions just in case.
  • Our CAPS players give Stanley the highest accolades in its immediate circle of competition, with a 52% approval rating. That's still a very solid, bottom-dwelling one-star rating. Let us know whether you think that's fair.

(Figures in millions, except per-share data)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$282.8

$307.5

(8%)

Net Profit

$5.9

$16.8

(64.8%)

EPS

$0.55

$1.41

(61%)

Diluted Shares

10.7

11.9

(10.5%)

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

16.6%

21.1%

(4.5)

Operating Margin

0.3%

7.4%

(7.1)

Net Margin

2.1%

5.5%

(3.4)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + ST Invest.

$31.6

$6.3

404.8%

Accounts Rec.

$25.4

$32.3

(21.3%)

Inventory

$58.1

$59.4

(2.2%)

Liabilities

FY 2007

FY 2006

Change

Accounts Payable

$16.1

$17.8

(9.5%)

Long-Term Debt

$29.3

$5.7

412.5%

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$23.0

$35.3

(34.9%)

Capital Expenditures

$4.0

$4.2

(5.8%)

Free Cash Flow

$19.1

$31.1

(38.8%)

Owner Earnings

$7.9

$18.4

(57.2%)

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

Ethan Allen Interiors (NYSE:ETH)

$867

12.0

*

Pier 1 Imports (NYSE:PIR)

$557

N/A

*

Furniture Brands International (NYSE:FBN)

$439

N/A

*

La-Z-Boy (NYSE:LZB)

$395

N/A

*

Stanley

$140

27.4

*

Using the latest reported numbers from Yahoo! Finance.

Keep your partners close and the competition in your vest pocket.

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