Hooker Furnishings Corporation (NASDAQ-GS: HOFT), a global leader
in the design, production, and marketing of home furnishings for
nearly a century, today reported operating results for its fiscal
2024 first quarter ended April 30, 2023.
Fiscal 2024 First Quarter
overview:
- Consolidated net sales for
the quarter were $121.8 million, a $25.5 million, or 17.3%,
decrease compared to a year ago. An expected revenue reduction was
driven by a 32.5% sales decrease in the Home Meridian (HMI) segment
and, to a lesser extent, a 14.8% decrease in first quarter
year-over-year Domestic Upholstery sales. Net sales in the Hooker
Branded segment remained relatively unchanged.
- Consolidated net income was
$1.5 million, or $0.13 per diluted share for the quarter, compared
to $3.2 million, or $0.26 per diluted share, in the prior year
period. Consolidated operating income for the quarter was $2
million compared to $3.9 million in the same quarter a year
ago.
- The Company strengthened
its financial position during the quarter by generating $22.4
million in cash from operating activities and funded $4.5 million
in capital expenditures and the continued development of our ERP
system, $4.3 million in share repurchases, and $2.4 million in cash
dividends.
- Inventory levels decreased
by $23 million during the quarter, well on the way toward a goal of
reducing inventories by $30 million before fiscal
year-end.
- The Hooker Branded and
Domestic Upholstery segments and All Other were profitable for the
quarter. Home Meridian’s operating loss of $2.1 million, resulting
from lower sales volume, improved by $1 million compared to the
same period a year ago.
- The grand opening of a
nearly 120,000-square-foot new Hooker Legacy Showroom in the
Showplace Building at the Spring High Point Market generated a 93%
increase in year-over-year retailer traffic, with successful
product launches across all brands.
Management Commentary
“Considering the softer retail environment,
economic uncertainties and our recent exit from the Accentrics Home
(ACH) line, we’re pleased to have exceeded internal and external
expectations for sales and earnings this quarter,” said Jeremy
Hoff, chief executive officer and director of Hooker Furnishings.
“Our liquidation of ACH inventories and other obsolete inventories
at HMI is about 80% complete as of May end, which is helping us
reduce our domestic warehousing footprint and make progress towards
getting profitability back on track at HMI. We generated $22.4
million in cash during the quarter, and we are continuing to build
cash currently as we further reduce inventories. Recent cash
levels have increased by about $15 million since the end of
our first quarter.”
“Our new Hooker Legacy Showroom Grand Opening at
the April High Point Market achieved what we intended, as we nearly
doubled our attendance from a year ago and attracted new
customers,” Hoff said. “Many of our strategic organic growth
initiatives that will enable us to broaden our total addressable
market and visibility are tied to the new showroom and the Hooker
Legacy Brands,” he added. One of those strategic growth
initiatives, the High Point Market launch of the ‘M’ domestically
produced upholstery and imported occasional furniture brand,
“surpassed our expectations,” Hoff said. “This new brand, combining
the unique capabilities of HF Custom, Shenandoah, Bradington-Young
and Hooker Casegoods, will enable us to compete in a modern
lifestyle aesthetic without disrupting any of those core
businesses. Retailers affirmed to us that the new M brand is very
much on-point with the up-and-coming casual modern lifestyle that
today’s younger consumer is gravitating towards.”
Segment Reporting: Hooker
Branded
- The Hooker Branded segment’s net
sales remained relatively unchanged, decreasing slightly by 0.8% or
$339,000, compared to the prior year’s first quarter. Gross profit
and margin also remained flat.
- Net sales were negatively impacted
by higher discounting compared to abnormally lower levels of
discounting in the prior year period. While we benefitted from the
price increases implemented in the prior year to mitigate product
cost inflation, discounting increased by 230 bps from the prior
year due to softer demand in the current quarter.
- Higher demurrage and drayage
expenses, which heavily impacted the gross margin in previous
quarters, were still higher than the prior-year first quarter but
are trending down.
- At the end of the first quarter,
Hooker Branded inventory levels decreased by $14 million compared
to the fiscal 2023 year-end. Inventories were still elevated at
quarter-end and higher than pre-pandemic levels in calendar year
2019. “We are actively working to reduce inventory levels to align
with current demand, however our inventory management process is
working well, so we’re in stock on most best-selling items and
inventory obsolescence is not an issue.” said Paul Huckfeldt,
senior vice president and chief financial officer.
- Quarter-end backlog for Hooker
Branded was lower than the prior-year first-quarter end but
remained 50% higher than pre-pandemic levels at fiscal 2020 first
quarter end. Incoming orders decreased by 16.6% as compared to the
prior-year quarter and approached levels similar to fiscal 2020
first quarter, reflecting normalized demand after the
pandemic.
Segment Reporting: Home Meridian
(HMI)
“The sales decrease at HMI was better than our
expectations,” said Hoff. “While disappointing, the operating loss
of $2.1 million was a $1 million improvement compared to the
prior-year first quarter, and also was better than we expected,” he
said.
“Our transition to a new business model at HMI
will continue into this year as we move away from higher-risk
businesses to focus on our core strengths and core businesses –
Pulaski, Samuel Lawrence Furniture (SLF), Samuel Lawrence
Hospitality (SLH) and Prime Resources International (PRI, which is
transitioning to a container-direct-only model). We believe we are
on track to achieve profitability in this segment by the end of the
fiscal year,” Hoff added.
- Net sales at HMI decreased by $20.2
million, or 32.5%, compared to the prior year’s first quarter,
driven by sales decreases with major furniture chains and mass
merchants in a slower retail environment for home furnishings.
Other contributing factors to the lower sales included lower
selling prices due to liquidation sales, and delayed orders from
retail customers as they continue to reduce excess inventory.
- Inventories decreased $9 million
from the end of fiscal 2023, due to liquidation of obsolete
inventories and efforts to align inventory levels with current
demand.
- On the positive side, SLH’s net
sales more than doubled compared to the prior-year quarter,
indicating a strong recovery in the hospitality industry after the
COVID pandemic. Additionally, freight costs improved due to the
stabilization of ocean freight rates.
- Also on a positive note, Hooker
Furnishings and leading lifestyle and entertainment company Scott
Brothers Global announced in April the renewal of their multi-year
licensing agreement in which HMI’s Pulaski and SLF divisions serve
as the exclusive bedroom, dining, and occasional furniture
suppliers for the Drew & Jonathan Home brand. “With the major
retail placements, we are expecting significant short and long-term
sales growth for the Drew & Jonathan Home brand,” Hoff
said.
- Incoming orders and quarter-end
backlog at HMI were lower than the prior year quarter and fiscal
2020 first quarter, due to the absence of orders from the Club
channel (which HMI exited during fiscal 2022) and the ACH business,
as well as decreased incoming orders from the retail
customers.
Segment Reporting: Domestic
Upholstery
- After 10 consecutive quarters of
year-over-year sales increases in Domestic Upholstery, the segment
experienced its first quarterly sales decline in over two years, a
decrease of $6.1 million, or 14.8% compared to last year’s first
quarter. Sales reductions at HF Custom, Sunset West and Shenandoah
were partially offset by increased net sales at
Bradington-Young.
- Sales decreases at Sunset West are
attributed to non-recurring factors including slowed shipments in
February and March caused by the December conversion to a new ERP
system and the expansion of the outdoor furniture brand to the East
Coast, which involved transition issues and start-up delays in the
Georgia distribution center. These issues were mostly resolved by
the end of the first quarter.
“Much of the Domestic Upholstery sales dip was
driven by the fact that we worked through our large backlogs in the
divisions, and then experienced softer demand. We do not think it
is a long-term situation,” Hoff said. “The temporary slowdown at
Sunset West occurred due to transitioning to a new ERP system and
bi-coastal distribution. Now that this transition is largely
complete, Sunset West is expanding to a nationally distributed
brand, which we believe offers a double-digit organic growth
opportunity over multiple years,” Hoff added.
- Despite the sales decline and
disruptions, the Domestic Upholstery segment reported operating
income of $1.3 million and operating margin of 3.8%.
- Quarter-end backlog for
Bradington-Young remained over three times higher than pre-pandemic
levels at fiscal 2020 first- quarter end, while the backlogs for HF
Custom and Shenandoah decreased to levels similar to fiscal 2020.
Incoming orders at Bradington-Young and Shenandoah were at similar
levels in fiscal 2020, while HF Custom experienced lower orders
compared to this period.
Cash, Debt, and Inventory
Cash and cash equivalents stood at $31 million
at fiscal 2024 first quarter-end, an increase of $12 million from
the prior year-end. During the first quarter, the Company used a
portion of the $22.4 million cash generated from operating
activities to fund $4.3 million of share repurchases, $3.2 million
in capital expenditures including investments in its new showroom,
$2.4 million in cash dividends to shareholders, and $1.3 million
for development of its cloud-based ERP system. “In addition to our
cash balance, we have an aggregate of $27.2 million available under
our existing revolver at quarter-end to fund working capital needs.
We believe that our liquidity and capital requirements will be
further improved through the liquidation sales of remaining excess
inventories at HMI,” said Huckfeldt.
Capital Allocation
“We’re pleased with the progress we’ve made
reducing inventories, which was a large part of the cash we
generated during the quarter. Since the repurchase program’s
announcement around this time last year, we have returned
approximately $20 million to our shareholders and retired 1.2
million shares. Our board recently approved an additional $5
million authorization as part of our capital allocation plan for
this year. In addition to continuing to execute the share
repurchase plan, our capital allocation priorities include building
cash reserves, funding the organic growth initiatives noted
earlier, continuing our dividend, and funding typical capital
expenditures,” Huckfeldt concluded.
Outlook
“While retail conditions remain
mixed along with some economic uncertainties, we saw increases in
consolidated incoming orders in May ,” said Hoff, adding that “We
believe the industry is getting through some of the elevated
inventory challenges and we may be seeing some breakthrough in that
area.”
Following its successful new showroom grand
opening at the Spring High Point Market, Hooker Furnishings will
continue initiatives to enhance visibility and addressable market
reach this summer, debuting a new showroom at the Atlanta Market
for Hooker Legacy brands. “In addition to opening the new showroom
for Legacy brands, Sunset West will also debut a new showroom at
the Atlanta Market, which is the new sponsor of the Casual Market
for outdoor furniture, relocating from Chicago,” Hoff said. “Hooker
Legacy brands will show at its fourth Las Vegas Market this summer
as well. At HMI, we expect the previously announced inventory
liquidations to be substantially completed by the end of the fiscal
2024 second quarter. While we expect some short-term volatility in
sales and earnings at HMI, we continue to expect the segment to
achieve profitability by the end of the 2024 fiscal year. The HMI
team has rallied around the new level of focus on our core
competencies, as we direct our support and resources behind our key
businesses while reducing costs.”
“The Hooker Furnishings team continues to focus
on organic growth opportunities through expanded visibility,
strategic product development, operational improvements and cost
reductions,” Hoff said. “By focusing on these controllables, we
will be in the strongest possible position when the demand
environment improves,” he concluded.
Conference Call Details
Hooker Furnishings will present its fiscal 2024
first quarter financial results via teleconference and live
internet webcast on Thursday morning, June 8th, 2023 at 9:00 AM
Eastern Time. A live webcast of the call will be available on the
Investor Relations page of the Company’s website at
https://investors.hookerfurnishings.com/events and archived for
replay. To access the call by phone, participants should go to this
link (registration link) and you will be provided with dial in
details. To avoid delays, participants are encouraged to dial into
the conference call fifteen minutes ahead of the scheduled start
time.
Hooker Furnishings Corporation, in its 99th year
of business, is a designer, marketer and importer of casegoods
(wooden and metal furniture), leather furniture, and
fabric-upholstered furniture for the residential, hospitality and
contract markets. The Company also domestically manufactures
premium residential custom leather and custom fabric-upholstered
furniture and outdoor furniture. Major casegoods product categories
include home entertainment, home office, accent, dining, and
bedroom furniture in the upper-medium price points sold under the
Hooker Furniture brand. Hooker’s residential upholstered seating
product lines include Bradington-Young, a specialist in upscale
motion and stationary leather furniture, HF Custom (formerly Sam
Moore Furniture), a specialist in fashion forward custom upholstery
offering a selection of chairs, sofas, sectionals, recliners and a
variety of accent upholstery pieces, Hooker Upholstery, imported
upholstered furniture targeted at the upper-medium price-range and
Shenandoah Furniture, an upscale upholstered furniture company
specializing in private label sectionals, modulars, sofas, chairs,
ottomans, benches, beds and dining chairs in the upper-medium price
points for lifestyle specialty retailers. The H Contract product
line supplies upholstered seating and casegoods to upscale senior
living facilities. The Home Meridian division addresses more
moderate price points and channels of distribution not currently
served by other Hooker Furnishings divisions or brands. Home
Meridian’s brands include Pulaski Furniture, casegoods covering the
complete design spectrum in a wide range of bedroom, dining room,
accent and display cabinets at medium price points, Pulaski
Upholstery, stationary and motion upholstery collections available
in fabric and leather covering the complete design spectrum at
medium price points, Samuel Lawrence Furniture, value-conscious
offerings in bedroom, dining room, home office and youth
furnishings, Prime Resources International, value-conscious
imported leather upholstered furniture, and Samuel Lawrence
Hospitality, a designer and supplier of hotel furnishings. The
Sunset West division is a designer and manufacturer of comfortable,
stylish and high-quality outdoor furniture. Hooker Furnishings
Corporation’s corporate offices and upholstery manufacturing
facilities are located in Virginia, North Carolina and California,
with showrooms in High Point, N.C., Las Vegas, N.V., Atlanta, G.A.
and Ho Chi Minh City, Vietnam. The company operates distribution
centers in Virginia, Georgia, and Vietnam. Please visit our
websites hookerfurnishings.com, hookerfurniture.com,
bradington-young.com, hfcustomfurniture.com,
hcontractfurniture.com, homemeridian.com, pulaskifurniture.com,
slh-co.com, and sunsetwestusa.com.
Certain statements made in this release, other
than those based on historical facts, may be forward-looking
statements. Forward-looking statements reflect our reasonable
judgment with respect to future events and typically can be
identified by the use of forward-looking terminology such as
“believes,” “expects,” “projects,” “intends,” “plans,” “may,”
“will,” “should,” “would,” “could” or “anticipates,” or the
negative thereof, or other variations thereon, or comparable
terminology, or by discussions of strategy. Forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Those risks and uncertainties include
but are not limited to: (1) general economic or business
conditions, both domestically and internationally, including the
current macro-economic uncertainties and challenges to the retail
environment for home furnishings along with instability in the
financial and credit markets, in part due to rising interest rates,
including their potential impact on (i) our sales and operating
costs and access to financing or (ii) customers and suppliers and
their ability to obtain financing or generate the cash necessary to
conduct their respective businesses; (2) difficulties in
forecasting demand for our imported products and raw materials used
in our domestic operations; (3) risks associated with our reliance
on offshore sourcing and the cost of imported goods, including
fluctuation in the prices of purchased finished goods, customs
issues, freight costs, including the price and availability of
shipping containers, ocean vessels, ocean and domestic trucking,
and warehousing costs and the risk that a disruption in our
offshore suppliers or the transportation and handling industries,
including labor stoppages, strikes, or slowdowns, could adversely
affect our ability to timely fill customer orders; (4) risks
associated with HMI segment restructuring and cost-savings efforts,
including our ability to timely dispose of excess inventories,
reduce expenses and return the segment to profitability; (5) the
impairment of our long-lived assets, which can result in reduced
earnings and net worth; (6) adverse political acts or developments
in, or affecting, the international markets from which we import
products, including duties or tariffs imposed on those products by
foreign governments or the U.S. government and possible future U.S.
conflict with China; (7) the direct and indirect costs and time
spent by our associates associated with the implementation of our
Enterprise Resource Planning system, including costs resulting from
unanticipated disruptions to our business; (8) the interruption,
inadequacy, security breaches or integration failure of our
information systems or information technology infrastructure,
related service providers or the internet or other related issues
including unauthorized disclosures of confidential information,
hacking or other cyber-security threats or inadequate levels of
cyber-insurance or risks not covered by cyber- insurance; (9) risks
associated with our Georgia warehouse including the inability to
realize anticipated cost savings and subleasing excess space on
favorable terms; (10) risks associated with domestic manufacturing
operations, including fluctuations in capacity utilization and the
prices and availability of key raw materials, as well as changes in
transportation, warehousing and domestic labor costs, availability
of skilled labor, and environmental compliance and remediation
costs; (11) the risks related to the Sunset Acquisition including
integration costs, maintaining Sunset West’s existing customer
relationships, debt service costs, interest rate volatility, the
use of operating cash flows to service debt to the detriment of
other corporate initiatives or strategic opportunities, the loss of
key employees from Sunset West, the disruption of ongoing
businesses or inconsistencies in standards, controls, procedures
and policies across the business which could adversely affect our
internal control or information systems and the costs of bringing
them into compliance and failure to realize benefits anticipated
from the Sunset Acquisition; (12) changes in U.S. and foreign
government regulations and in the political, social and economic
climates of the countries from which we source our products; (13)
risks associated with product defects, including higher than
expected costs associated with product quality and safety,
regulatory compliance costs (such as the costs associated with the
US Consumer Product Safety Commission’s new mandatory furniture
tip-over standard, STURDY) related to the sale of consumer products
and costs related to defective or non-compliant products, product
liability claims and costs to recall defective products and the
adverse effects of negative media coverage; (14) disruptions and
damage (including those due to weather) affecting our Virginia or
Georgia warehouses, our Virginia, North Carolina or California
administrative facilities, our High Point, Las Vegas, and Atlanta
showrooms or our representative offices or warehouses in Vietnam
and China; (15) the risks specifically related to the
concentrations of a material part of our sales and accounts
receivable in only a few customers, including the loss of several
large customers through business consolidations, failures or other
reasons, or the loss of significant sales programs with major
customers; (16) our inability to collect amounts owed to us or
significant delays in collecting such amounts; (17) achieving and
managing growth and change, and the risks associated with new
business lines, acquisitions, including the selection of suitable
acquisition targets, restructurings, strategic alliances and
international operations; (18) capital requirements and costs; (19)
risks associated with distribution through third-party retailers,
such as non-binding dealership arrangements; (20) the cost and
difficulty of marketing and selling our products in foreign
markets; (21) changes in domestic and international monetary
policies and fluctuations in foreign currency exchange rates
affecting the price of our imported products and raw materials;
(22) the cyclical nature of the furniture industry, which is
particularly sensitive to changes in consumer confidence, the
amount of consumers’ income available for discretionary purchases,
and the availability and terms of consumer credit; (23) price
competition in the furniture industry; (24) competition from
non-traditional outlets, such as internet and catalog retailers;
(25) changes in consumer preferences, including increased demand
for lower-priced furniture; and (26) other risks and uncertainties
described under Part I, Item 1A. "Risk Factors" in the Company’s
Annual Report on Form 10-K for the fiscal year ended January 29,
2023. Any forward-looking statement that we make speaks only as of
the date of that statement, and we undertake no obligation, except
as required by law, to update any forward-looking statements
whether as a result of new information, future events or otherwise
and you should not expect us to do so.
|
Table I |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
For the |
|
|
Thirteen Weeks Ended |
|
|
April 30, |
|
May 1, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Net sales |
|
$ |
121,815 |
|
|
$ |
147,314 |
|
|
|
|
|
|
Cost of sales |
|
|
93,909 |
|
|
|
117,855 |
|
|
|
|
|
|
Gross profit |
|
|
27,906 |
|
|
|
29,459 |
|
|
|
|
|
|
Selling and administrative expenses |
|
|
25,048 |
|
|
|
24,658 |
|
Intangible asset amortization |
|
|
883 |
|
|
|
878 |
|
|
|
|
|
|
Operating income |
|
|
1,975 |
|
|
|
3,923 |
|
|
|
|
|
|
Other income, net |
|
|
56 |
|
|
|
278 |
|
Interest expense, net |
|
|
179 |
|
|
|
28 |
|
|
|
|
|
|
Income before income taxes |
|
|
1,852 |
|
|
|
4,173 |
|
|
|
|
|
|
Income tax expense |
|
|
402 |
|
|
|
991 |
|
|
|
|
|
|
Net income |
|
$ |
1,450 |
|
|
$ |
3,182 |
|
|
|
|
|
|
Earnings per share |
|
|
|
|
Basic |
|
$ |
0.13 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.13 |
|
|
$ |
0.26 |
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
|
|
10,976 |
|
|
|
11,866 |
|
Diluted |
|
|
11,077 |
|
|
|
11,949 |
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.22 |
|
|
$ |
0.20 |
|
Table II |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
For the |
|
|
Thirteen Weeks Ended |
|
|
April 30, |
|
May 1, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Net income |
|
$ |
1,450 |
|
|
$ |
3,182 |
|
Other comprehensive income: |
|
|
|
|
Amortization of actuarial gain/(loss) |
|
|
(70 |
) |
|
|
(18 |
) |
Income tax effect on amortization |
|
|
17 |
|
|
|
4 |
|
Adjustments to net periodic benefit cost |
|
|
(53 |
) |
|
|
(14 |
) |
|
|
|
|
|
Total comprehensive income |
|
$ |
1,397 |
|
|
$ |
3,168 |
|
Table III |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
As of |
|
April 30, |
|
January 29, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
30,976 |
|
|
$ |
19,002 |
|
Trade accounts receivable, net |
|
|
54,528 |
|
|
|
62,129 |
|
Inventories |
|
|
73,188 |
|
|
|
96,675 |
|
Income tax recoverable |
|
|
2,985 |
|
|
|
3,079 |
|
Prepaid expenses and other current assets |
|
|
7,551 |
|
|
|
6,418 |
|
Total current assets |
|
|
169,228 |
|
|
|
187,303 |
|
Property, plant and equipment, net |
|
|
29,070 |
|
|
|
27,010 |
|
Cash surrender value of life insurance policies |
|
|
27,899 |
|
|
|
27,576 |
|
Deferred taxes |
|
|
14,208 |
|
|
|
14,484 |
|
Operating leases right-of-use assets |
|
|
66,806 |
|
|
|
68,949 |
|
Intangible assets, net |
|
|
30,895 |
|
|
|
31,779 |
|
Goodwill |
|
|
14,952 |
|
|
|
14,952 |
|
Other assets |
|
|
11,010 |
|
|
|
9,663 |
|
Total non-current assets |
|
|
194,840 |
|
|
|
194,413 |
|
Total assets |
|
$ |
364,068 |
|
|
$ |
381,716 |
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Current portion of long-term debt |
|
$ |
1,393 |
|
|
$ |
1,393 |
|
Trade accounts payable |
|
|
15,991 |
|
|
|
16,090 |
|
Accrued salaries, wages and benefits |
|
|
5,743 |
|
|
|
9,290 |
|
Customer deposits |
|
|
6,582 |
|
|
|
8,511 |
|
Current portion of lease liabilities |
|
|
7,363 |
|
|
|
7,316 |
|
Other accrued expenses |
|
|
2,685 |
|
|
|
7,438 |
|
Total current liabilities |
|
|
39,757 |
|
|
|
50,038 |
|
Long term debt |
|
|
22,526 |
|
|
|
22,874 |
|
Deferred compensation |
|
|
8,022 |
|
|
|
8,178 |
|
Operating lease liabilities |
|
|
61,877 |
|
|
|
63,762 |
|
Other long-term liabilities |
|
|
855 |
|
|
|
843 |
|
Total long-term liabilities |
|
|
93,280 |
|
|
|
95,657 |
|
Total liabilities |
|
|
133,037 |
|
|
|
145,695 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Common stock, no par
value, 20,000 shares authorized, |
|
|
|
|
11,029 and 11,197 shares issued and
outstanding on each date |
|
|
50,067 |
|
|
|
50,770 |
|
Retained earnings |
|
|
180,152 |
|
|
|
184,386 |
|
Accumulated other comprehensive income |
|
|
812 |
|
|
|
865 |
|
Total shareholders’ equity |
|
|
231,031 |
|
|
|
236,021 |
|
Total liabilities and shareholders’ equity |
|
$ |
364,068 |
|
|
$ |
381,716 |
|
|
|
|
|
|
Table IV |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
|
|
For the |
|
|
Thirteen Weeks Ended |
|
|
April 30, |
|
May 1, |
|
|
|
2023 |
|
|
|
2022 |
|
Operating Activities: |
|
|
|
|
Net income |
|
$ |
1,450 |
|
|
$ |
3,182 |
|
Adjustments to reconcile net income to net cash |
|
|
|
|
provided by/(used in) operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
2,147 |
|
|
|
2,287 |
|
Deferred income tax expense |
|
|
293 |
|
|
|
1,838 |
|
Noncash restricted stock and performance awards |
|
|
371 |
|
|
|
354 |
|
Provision for doubtful accounts and sales allowances |
|
|
37 |
|
|
|
(349 |
) |
Gain on life insurance policies |
|
|
(634 |
) |
|
|
(568 |
) |
Changes in assets and liabilities: |
|
|
|
|
Trade accounts receivable |
|
|
7,564 |
|
|
|
(7,386 |
) |
Inventories |
|
|
23,487 |
|
|
|
(30,082 |
) |
Income tax recoverable |
|
|
93 |
|
|
|
(762 |
) |
Prepaid expenses and other assets |
|
|
(2,080 |
) |
|
|
(4,145 |
) |
Trade accounts payable |
|
|
(240 |
) |
|
|
10,493 |
|
Accrued salaries, wages, and benefits |
|
|
(3,547 |
) |
|
|
(1,827 |
) |
Customer deposits |
|
|
(1,928 |
) |
|
|
(906 |
) |
Operating lease assets and liabilities |
|
|
305 |
|
|
|
(168 |
) |
Other accrued expenses |
|
|
(4,743 |
) |
|
|
(1,830 |
) |
Deferred compensation |
|
|
(225 |
) |
|
|
(149 |
) |
Net cash provided by/(used in) operating activities |
|
$ |
22,350 |
|
|
$ |
(30,018 |
) |
|
|
|
|
|
Investing Activities: |
|
|
|
|
Acquisitions |
|
|
- |
|
|
|
(25,912 |
) |
Purchases of property and equipment |
|
|
(3,158 |
) |
|
|
(830 |
) |
Premiums paid on life insurance policies |
|
|
(107 |
) |
|
|
(118 |
) |
Net cash used in investing activities |
|
|
(3,265 |
) |
|
|
(26,860 |
) |
|
|
|
|
|
Financing Activities: |
|
|
|
|
Purchase and retirement of common stock |
|
|
(4,317 |
) |
|
|
- |
|
Payments for long-term loans |
|
|
(350 |
) |
|
|
- |
|
Cash dividends paid |
|
|
(2,444 |
) |
|
|
(2,388 |
) |
Cash used in financing activities |
|
|
(7,111 |
) |
|
|
(2,388 |
) |
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
|
11,974 |
|
|
|
(59,266 |
) |
Cash and cash equivalents – beginning of year |
|
|
19,002 |
|
|
|
69,366 |
|
Cash and cash equivalents – end of quarter |
|
$ |
30,976 |
|
|
$ |
10,100 |
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Cash paid/(refund) for income taxes |
|
$ |
16 |
|
|
$ |
(85 |
) |
Cash paid for interest, net |
|
|
202 |
|
|
|
- |
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
Increase in lease liabilities arising from changes in right-of-use
assets |
|
$ |
- |
|
|
$ |
3,689 |
|
Increase in property and equipment through accrued purchases |
|
|
145 |
|
|
|
47 |
|
Table V |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
NET SALES AND OPERATING INCOME/(LOSS) BY SEGMENT |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
April 30, 2023 |
|
May 1, 2022 |
|
|
|
|
% Net |
|
|
|
% Net |
|
Net sales |
|
|
Sales |
|
|
|
Sales |
|
Hooker Branded |
|
$ |
41,891 |
|
34.4 |
% |
|
$ |
42,230 |
|
28.7 |
% |
Home Meridian |
|
|
41,921 |
|
34.4 |
% |
|
|
62,085 |
|
42.1 |
% |
Domestic Upholstery |
|
|
35,104 |
|
28.8 |
% |
|
|
41,220 |
|
28.0 |
% |
All Other |
|
|
2,899 |
|
2.4 |
% |
|
|
1,779 |
|
1.2 |
% |
Consolidated |
|
$ |
121,815 |
|
100 |
% |
|
$ |
147,314 |
|
100 |
% |
|
|
|
|
|
|
Operating income/(loss) |
|
|
|
|
|
Hooker Branded |
|
$ |
2,300 |
|
5.5 |
% |
|
$ |
4,142 |
|
9.8 |
% |
Home Meridian |
|
|
(2,119 |
) |
-5.1 |
% |
|
|
(3,095 |
) |
-5.0 |
% |
Domestic Upholstery |
|
|
1,328 |
|
3.8 |
% |
|
|
2,752 |
|
6.7 |
% |
All Other |
|
|
466 |
|
16.1 |
% |
|
|
124 |
|
7.0 |
% |
Consolidated |
|
$ |
1,975 |
|
1.6 |
% |
|
$ |
3,923 |
|
2.7 |
% |
|
|
|
|
|
|
For more information, contact: Paul A.
Huckfeldt, Senior Vice President & Chief Financial Officer,
Phone: (276) 666-3949
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