Stanley Furniture: Selling Below Book Value

Stanley Furniture (STLY) is a American furniture manufacturing company headquartered in High Point, North Carolina . The company stock trades at its 52 week low and its market cap is the same as it was in 1997. It stock price hasn't performed well since the financial crisis and has underperformed  its peers and market as a whole.

Company History

The company was started in 1924 by Thomas Bahnson Stanley who went own to become Governor of Virginia. In 2009, the company announced that its line of Young America would undergo a major overhaul. The company ceased all oversea production of Young America line and moved its production to the United States primarily North Carolina and Virginia. In 2010 the company that it was shutttering its Shanleytown manufacturing operation and converting it to warehouse and distribution center.

Finances

Balance Sheet

2013 31/12	2012 31/12	2011 31/12	2010 31/12
Total Current Assets	69.29	87.16	62.52	71.97
Cash and Short Term Investments 17.22 35.93 15.7 25.53 Cash 7.22 10.93 15.7 25.53 Cash & Equivalents - - - - Short Term Investments 10 25 - - Total Receivables, Net 12 10.03 10.25 13.84 Accounts Receivables - Trade, Net 12 10.03 10.25 9.89 Total Inventory 33.67 35.06 31.08 25.7 Prepaid Expenses 3.96 3.44 3.38 5.88 Other Current Assets, Total 2.44 2.7 2.11 1.02
Total Assets	95.22	110.72	80.61	88.4
Property/Plant/Equipment, Total - Net 20.14 19.87 17.59 15.98 Property/Plant/Equipment, Total - Gross - 43.98 44.46 46.18 Accumulated Depreciation, Total - -24.11 -26.87 -30.2 Goodwill, Net - - - - Intangibles, Net - - - - Long Term Investments - - - - Note Receivable - Long Term - - - - Other Long Term Assets, Total 5.79 3.69 0.5 0.45 Other Assets, Total - - - -
Total Current Liabilities	13.2	14.91	16.46	19.2
Accounts Payable 7.9 8.67 9.96 9.12 Payable/Accrued - - - - Accrued Expenses 5.3 6.25 6.49 7.73 Notes Payable/Short Term Debt - - - - Current Port. of LT Debt/Capital Leases - - - 2.36 Other Current liabilities, Total - - - -
Total Liabilities	19.58	23.48	23.57	26.6
Total Long Term Debt - - - - Long Term Debt - - - - Capital Lease Obligations - - - - Total Debt - - - 2.36 Deferred Income Tax 0.7 0.96 0.52 1.02 Minority Interest - - - - Other Liabilities, Total 5.69 7.6 6.59 6.38
Total Equity	75.64	87.24	57.04	61.8
Redeemable Preferred Stock, Total - - - - Preferred Stock - Non Redeemable, Net - - - - Common Stock, Total - 0.28 0.29 0.29 Additional Paid-In Capital - 15.02 14.9 14.43 Retained Earnings (Accumulated Deficit) - 72.42 42.04 47.06 Treasury Stock - Common - - - - ESOP Debt Guarantee - - - - Unrealized Gain (Loss) - - - - Other Equity, Total 75.64 -0.48 -0.18 0.01
Total Liabilities & Shareholders' Equity	95.22	110.72	80.61	88.4
Total Common Shares Outstanding	14.51	14.57	14.52	14.34
Total Preferred Shares Outstanding	-	-	-	-

For fiscal year ending 2013, the company's revenues decreased 2% to $96.9 million. The company has a net loss of $12.6 million and income of $30.4 million. It revenues reflect that demand for the company's products and services have decreased.

Valuation

Stanley is undervalued selling below its book value of $5.21 and having about $17 million dollars in cash on the balance sheet. It is massively underperforming its peers and should trade up to book value. It has a current ratio of 5.25 that show the company is over capitalized and need to return cash, sell assets, or do a stock buyback to close the gap between the current stock price and book value.