March 29, 2005
John Cash
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Stanley Furniture Company, Inc.
Form 10-K for the fiscal year ended December 31, 2004
File No. 0-14938
Dear Mr. Cash:
This letter responds to the comments of the staff of the Securities and
Exchange Commission (the "Commission") communicated by letter (the "Comment
Letter") dated March 16, 2004 with respect to the Form 10-K of Stanley Furniture
Company, Inc. for the fiscal year ending December 31, 2004 (the "Filing"). For
your convenience, the headings and paragraph numbers in our letter correspond to
the headings and paragraph numbers in the Comment Letter.
10-K for the Period Ended December 31, 2004
General
1. Where a comment below requests additional disclosures or other revisions to
be made, please show us in your supplemental response what the revisions
will look like. These revisions should be included in your future filings.
We have provided the requested revisions and will include these revisions
in our future filings.
Liquidity and Capital Resources -- Table of Contractual Obligations
2. Please revise your table of contractual cash obligations to also include
the following:
(a) Estimated interest payments on your debt, and
(b) Estimated future benefit payments related to your pension and
postretirement benefits.
Because the table is aimed at increasing transparency of cash flow, we
believe these payments should be included in the table. Please also
disclose any assumptions you made to derive these amounts.
The revised table including the requested information and related
assumptions is set forth below:
The following table sets forth our contractual cash obligations and other
commercial commitments at December 31, 2004:
Payment due or commitment expiration
----------------------------------------------
Less than Over
Contractual cash obligations: Total 1 year 1-3 years 3-5 years 5 years
Long-term debt ............................. $15,685 $ 4,257 $ 5,714 $ 2,857 $ 2,857
Postretirement benefits other than pensions(1) 4,857 290 550 535 3,482
Fixed interest payments on long-term debt .. 3,120 1,016 1,311 595 198
Operating leases ........................... 2,821 701 1,182 938
------- ------- ------- ------- -------
Total contractual cash obligations ......... $26,483 $ 6,264 $ 8,757 $ 4,925 $ 6,537
======= ======= ======= ======= =======
Other commercial commitments:
Letters of credit .......................... $ 4,234 $ 4,234
======= =======
<FN>
(1) The '83 Group Annuity Mortality tables were used in estimating future
benefit payments, and the health care cost trend rate for determining
payments is 10% for 2005 and gradually declines to 5.5% in 2010 where it is
assumed to remain constant for the remaining years.
</FN>
Our pension plan is frozen and under current valuations holds sufficient
assets to cover future benefit obligations. Therefore, we do not currently
anticipate any cash funding needs to meet minimum required funding thresholds.
Item 7A - Quantitative and Qualitative Disclosures about Market Risk
3. We note that 4% of your 2004 net sales were to international customers.
Please include a discussion regarding your foreign currency exchange rate
risk. Indicate if your foreign sales and purchases are denominated in
foreign currencies and if so, whether you are hedging those transactions.
Refer to Item 305 of Regulation S-K.
None of our sales or purchases are denominated in foreign currencies. We
propose to include the following sentence in our future filings:
"None of our foreign sales or purchases are denominated in foreign currency
and we do not have any foreign currency hedging transactions."
As requested in the Comment Letter, we acknowledge that (i) Stanley
Furniture Company is responsible for the adequacy and accuracy of the disclosure
in its filings; (ii) staff comments or changes to disclosure in response to
staff comments do not foreclose the Commission from taking any action with
respect to the Filing and (iii) we may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Sincerely,
/s/ Douglas I. Payne
--------------------
Douglas I. Payne
Executive Vice President
Finance and Administration