Stanley Furniture Announces Closing of Sale of Substantially All of Its Assets
March 02 2018 - 4:25PM
Stanley Furniture Company, Inc. (Nasdaq:STLY) announced today that
on March 2, 2018, its stockholders approved the previously
announced sale of substantially all of its assets to Churchill
Downs LLC (“Buyer”), and the Company consummated the sale
transaction pursuant to the terms of the asset purchase agreement
dated November 20, 2017, as amended on January 22, 2018. The
purchase price consisted of approximately $10.8 million in cash, a
subordinated promissory note in the principal amount of
approximately $7.4 million, and a 5% equity interest in Buyer’s
post-closing ultimate parent company. The Buyer also assumed
substantially all the Company’s liabilities. The Company
retained certain assets, including cash of approximately
$0.8 million (approximately $0.6 million of which is
restricted cash), net operating loss carryforwards, and any
remaining payments under the Continued Dumping and Subsidy Offset
Act. The Company used cash proceeds from the asset sale of
approximately $1.3 million to pay the outstanding balance
under its credit agreement with Wells Fargo and estimates
additional transaction costs for the asset sale of approximately
$2.7 million. In connection with the asset sale and consistent with
the terms of the asset purchase agreement, the Company is changing
its name to HG Holdings, Inc.
As previously announced, the Company does not intend to
liquidate following the closing of the transaction. The
Company’s board of directors will evaluate alternatives for use of
the cash consideration, which are expected to include using a
portion of the cash to either repurchase Company common stock or
pay a special dividend to stockholders and also using a portion of
the cash to acquire non-furniture related assets that will allow
the Company to potentially derive a benefit from its net operating
loss carryforwards.
Steven A. Hale II, Chairman of the Board, stated, “We’re pleased
to close this transaction and thank the many people who contributed
to its successful completion. The Company will now be able to focus
solely on evaluating alternatives for deploying its cash and
potentially deriving a benefit from the Company’s net operating
loss carryforwards. We look forward to this next chapter in the
Company’s history.”
About the CompanyStanley Furniture Company,
Inc. formerly operated as a leading design, marketing and overseas
sourcing resource in the upscale segment of the wood residential
furniture market. After the sale of substantially all of its assets
on March 2, 2018, the Company is changing its name to HG Holdings,
Inc. and will evaluate alternatives for use of its cash. The
Company’s common stock is traded on the NASDAQ stock market under
the symbol STLY.
Forward-Looking
StatementsCertain statements made in this news release are
not based on historical facts, but are forward-looking statements.
These statements can be identified by the use of forward-looking
terminology such as “believes,” “estimates,” “expects,” “may,”
“will,” “should,” “could,” or “anticipates,” or the negative
thereof or other variations thereon or comparable terminology.
These statements reflect our reasonable judgment with respect to
future events and are subject to risks and uncertainties that could
cause actual results or outcomes to differ materially from those in
the forward-looking statements. Such risks and uncertainties
include the costs associated with litigation relating to the asset
sale transaction, the occurrence of events that negatively impact
the Company’s liquidity in such a way as to limit or eliminate the
Company’s ability to use proceeds from the transaction to fund a
repurchase program or pay a special dividend, or an inability on
the part of the Company to identify a suitable business to acquire
or develop with the proceeds of the transaction, as well as the
other risks and uncertainties identified in filings by the Company
with the Securities and Exchange Commission, including its periodic
reports on Form 10-K and Form 10-Q. Any forward-looking
statement speaks only as of the date of this news release and the
Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new developments
or otherwise.
Stanley Furniture Company, Inc.Investor
Contact: Anita W. Wimmer(336)
884-7698
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