"While industry sales trends have improved this year, we believe market share gains are driving most of our sales growth"
Jeffrey R. Scheffer, president and chief executive officer

Stanley Furniture Company, Inc. (STLY) reported increased sales and earnings for the third quarter of 2004. Both sales and earnings exceeded management's guidance for the quarter issued in mid-July.

Net sales of $77.2 million increased 18.3% from the third quarter of 2003, marking the tenth consecutive quarter of sales growth over the comparable prior year quarter. Earnings per share grew 37.3% to $.81 compared to $.59 in the third quarter of last year.

Higher sales, increased production levels at the Company's domestic facilities, although at a slower growth rate than sales due to the growth of sourced items, and savings from sourcing initiatives drove the improvement. These improvements were offset by inflation in raw materials, wages, employee benefits and energy costs, and tariffs imposed on wooden bedroom furniture imported from China.

Approximately 27% of sales came from sourced items during the first nine months of 2004. Management expects sales from sourced items to level off around 30% of sales in the fourth quarter.

Business Outlook
"We are pleased to report our tenth consecutive quarter of year-over-year sales growth," commented Jeffrey R. Scheffer, president and chief executive officer. "For the past twelve months our sales have increased almost $40 million, or 16%, compared to the prior twelve months.

While industry sales trends have improved this year, we believe market share gains are driving most of our sales growth. The strong third quarter performance has caused us to again raise our sales and earnings guidance for 2004 as outlined below," Scheffer concluded.