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 third quarter and nine-month period ended October 29, 2023.
Fiscal 2024 Third Quarter
overview:
- Consolidated
net income for the quarter increased 45.4% to $7 million or $0.65
per diluted share, compared to $4.8 million or $0.42 per diluted
share a year ago. Consolidated operating income increased 36.6%
compared to the prior year quarter. Operating income and margin
were $8.8 million and 7.5% as compared to $6.4 million and 4.2% in
the prior-year third quarter, due to improved profitability in the
Hooker Branded and Home Meridian (HMI) segments.
- Consolidated
net sales for the fiscal 2024 third quarter decreased by $34.7
million, or 22.9%, compared to a year ago, driven by continued soft
demand for home furnishings, as well as the Company's exit
from the Accentrics Home product line. Net sales declined in each
of the three segments versus the prior year period. However, HMI
segment’s sales increased compared to the first and second quarters
of the current fiscal year, sparked by a large volume of shipments
for new product placements. Hooker Branded sales also increased
compared to the previous quarter in the current fiscal year.
- The Company’s
strategy to reposition the Home Meridian Segment from a volatile,
high-risk model with unpredictable profitability to a lower risk,
more sustainable revenue and profit model is beginning to yield
tangible results. As the Company forecasted, the Home Meridian
segment achieved a quarterly operating income for the first time
since calendar year 2021. The segment contributed $0.9 million to
income in the current-year third quarter compared to a $3.2 million
loss in the prior-year third quarter.
- For the fiscal
2024 nine-month period, consolidated net sales decreased by $115.4
million, or 25.5%, as compared to the same period last year. The
nine-month results were driven by decreased net sales in all three
segments, attributable to industry-wide soft demand, as well as the
exit from the Accentrics Home product line which accounted for
about $10 million of the decrease. Consolidated operating income
and margin were $12 million, or 3.6%, as compared to $17.6 million
and 3.9% in the prior-year nine-month period. Consolidated net
income was $9.3 million or $0.85 per diluted share, as compared to
$13.6 million or $1.14 per diluted share in the prior-year
nine-month period.
Management Commentary
“Despite a challenging macroeconomic environment
for the home furnishings industry, we’re proud of our team for
persevering through some difficult decisions and short-term pain to
create a more sustainable and profitable business model for Hooker
Furnishings,” said Jeremy Hoff, chief executive officer. “After
spending considerable time repositioning HMI to focus on its core
products and businesses, it is encouraging to see HMI report a
quarterly profit for the first time in two years and contribute to
our overall profitability. Liquidating excess inventories,
rightsizing our overhead and exiting unprofitable businesses have
put us in a much stronger overall position,” Hoff said. “Ongoing
execution of our strategic growth initiatives is our main focus,’
he continued.
“While the housing market slowdown driven by
high interest rates, and a shift in consumer discretionary spending
away from home furnishings continue to challenge, we’re encouraged
by positive indicators like the normalization of ocean freight
rates, eased supply chain constraints, more stable raw material
costs and increased labor availability.
“Demand is improving, with consolidated orders
up $12.7 million, or 15.7%, for the third quarter versus the prior
year period. For the first nine months, consolidated orders
increased by $75.8 million or 33.5%,” he said. “Most of the
consolidated increase is driven by Home Meridian segment orders
which were unusually low in both prior year periods.”
“The recent Fall High Point Market was positive
by all measurables across the company,” Hoff added. “Increased
visibility is one of our major strategic objectives. Adding two
smaller showrooms in Las Vegas and Atlanta, while moving to our
largest High Point showroom, has created an exponentially larger
audience for our products on the Legacy side of our business,
including Sunset West. HMI also had a good market as they focused
on strengthening the product assortment for Pulaski (PFC), Samuel
Lawrence Furniture (SLF) and Prime Resources International (PRI).
The efforts by our team at HMI have reenergized and repositioned
the product offerings for growth and have received a lot of
positive retail feedback along with new placements,” he said.
“As reported previously, the collective impact
of our new showrooms in High Point, Atlanta and Las Vegas has
increased our customer contacts from about 3,000 to around 14,000
annually, more than quadrupling the number of existing and
potential customers. In the first half of the fiscal year, we
opened 1,000 new accounts as visibility and engagement increased.
This quarter that pace continued as we added 150 new customers on
average per month,” Hoff said.
Segment Reporting: Hooker
Branded
- Weak home
furnishings demand drove a net sales decrease in the segment of
$17.5 million or about 31%. Also contributing to the net sales
decrease in the segment were short-term delays related to the
implementation of a new ERP over Labor Day weekend which had an
impact of approximately $3 million, which would have positioned the
business down 26% for the quarter. However, Hooker Branded reported
a solid operating income of $7.3 million and an operating margin of
18.6%, an improvement compared to $5.9 million and 10.3% in the
prior-year quarter.
- For the fiscal
2024 nine-month period, net sales decreased by $35.2 million, or
22.8%, also due to softer demand for home furnishings.
- Gross profit and
margin both increased in the fiscal 2024 third quarter despite the
decline in net sales. This favorable outcome was attributed to
significantly decreased product costs driven by lower ocean freight
rates. In addition, warehousing costs decreased due to lower
demurrage and drayage expenses, as well as lower labor and
compensation expenses due to reduced shipping activities.
- The
higher-than-average gross profit margin of 45.6% for the quarter
was temporarily elevated due to timing issues with reduced freight
and product costs. While price decreases and promotions were
implemented in August, the majority of inventories sold in the
quarter still carried price increases implemented in a prior year,
resulting in the unusually high gross margin. We expect Hooker
Branded margins to normalize to historical levels in the coming
quarters.
- Incoming
orders increased by 7% compared to the prior year’s third quarter
and this year’s second quarter. Although quarter-end order backlog
was lower than the prior-year quarter-end, it increased from this
year’s second quarter-end and remained nearly 70% higher than
pre-pandemic levels at the end of fiscal 2020 third quarter.
Segment Reporting: Home Meridian
(HMI)
- Home Meridian’s
segment net sales decreased by $6.9 million, or 13.6%, compared to
the prior-year third quarter, but increased compared to the first
and second quarters of the current fiscal year. Sales decreases in
the e-commerce channel previously served by ACH accounted for over
40% of the overall decrease in the segment, due to our exit from
the ACH line. The remaining decreases in the segment were driven by
sales decreases at SLF, PRI and PFC, the divisions that serve
independent furniture stores and major furniture chains. These
decreases were partially offset by strong sales at Samuel Lawrence
Hospitality (SLH), which reported sales increases of 152% and 46%
for the third quarter and nine-month periods, respectfully.
- Despite the net
sales decrease, HMI gross profit and margin increased by $3.4
million or 940 bps, in the fiscal 2024 third quarter. This increase
was attributed to improved margin as we exited from the
unprofitable sales channels and product lines, decreased product
costs, and increased profitability at SLH. Furthermore, decreased
costs in the Georgia warehouse, and decreased wage expenses due to
organizational and personnel changes, all contributed to the
increase of gross profit and margin. For the fiscal 2024 nine-month
period, gross profit slightly decreased driven by sales decreases,
while gross margin increased by 530 bps due to the previously
mentioned factors, as well as the absence of warehouse transition
and start-up costs incurred in the prior year first quarter.
- Home Meridian
recorded a quarterly operating income of $0.9 million compared to a
$3.2 million operating loss in the prior-year third quarter.
- Liquidations of
inventories that were written down in the prior-year fourth quarter
were essentially completed during the quarter and had immaterial
impact on gross profit. Inventory levels decreased by $15 million
as compared to the year-end and $46 million compared to the
prior-year third quarter. In addition, we have realigned our
inventory mix to reflect our current business plan and reduced our
footprint in the Georgia warehouse by 200,000 square feet in the
second quarter. We also entered into an agreement in the third
quarter to reduce another 200,000 square feet by early next fiscal
year.
- Incoming orders
were 19% higher than the prior-year third quarter, but lower than
the current year first and second quarters’ orders as our retail
customers are matching inventories to current soft demand for home
furnishings. Quarter-end backlog was lower than the same period
last year and the first and second quarters of fiscal 2024.
Segment Reporting: Domestic
Upholstery
- After two years
of sales growth, Domestic Upholstery net sales decreased by $10.9
million, or 25%, in the fiscal 2024 third quarter due to lower
demand. All four divisions reported sales decreases for both the
quarter and the nine-month period.
- Gross profit
and margin both decreased in the fiscal 2024 third quarter and
nine-month period driven by net sales decreases. Direct material
costs were 220 bps and 310 bps below prior year periods due to more
stable raw material costs. However, these decreases were more than
offset by under-absorbed indirect costs, which were 440 bps and 370
bps higher as compared to the prior-year third quarter and
nine-month period, respectively, and consisted primarily of
indirect labor costs.
- Incoming orders
increased by 39% in comparison to the third quarter of the previous
year, as Bradington Young, HF Custom and Shenandoah all recorded
increased orders. Sunset West orders remained unchanged as compared
to the prior-year third quarter. Quarter-end backlog for the
segment slightly decreased from the second quarter end.
Bradington-Young backlog was 2.5 times that of the pre-pandemic
levels at fiscal 2020 third quarter end, while the backlogs for HF
Custom and Shenandoah decreased to levels comparable to fiscal
2020.
Cash, Debt, and Inventory
- Cash and
cash equivalents stood at $40 million at fiscal 2024 third
quarter-end, an increase of $21 million from the prior year-end.
Inventory levels decreased by $32 million from year-end and $69
million from this time a year ago. During the nine-month period,
$48.8 million of cash generated from operating activities funded
$11.7 million in share repurchases, $7.2 million in cash dividends
to shareholders, $5.7 million in capital expenditures including
investments in the new showrooms, $3.8 million for development of
our cloud-based ERP system, and $2.4 million for the BOBO
acquisition.
- Since the
share repurchase program began in the second quarter of last year,
a total of $25 million has been spent to purchase and retire 1.4
million shares of common stock. The share repurchase program was
completed during the fiscal 2024 third quarter.
- In
addition to the cash balance, an aggregate of $27.2 million was
available under our existing revolver at quarter-end.
Capital Allocation
“Going into the end of the year, our inventory
levels are aligned with current demand and our S&OP process is
working well,” said Paul Huckfeldt, chief financial officer. “Our
balance sheet gives us the cushion to get through the softer demand
we’re seeing in the fourth quarter and continue to fund our
internal growth initiatives, as well as maintaining our dividend
and funding some capital projects, including further development of
our ERP, which is now live at the Hooker Legacy divisions.”
Dividends
On December 5, 2023, our board of directors
declared a quarterly cash dividend of $0.23 per share which will be
paid on December 29, 2023 to shareholders of record at December 15,
2023. This represents a $0.01 per share or 4.5% increase over the
previous quarterly dividend and the eighth consecutive annual
dividend increase.
Outlook
“While economic indicators remain mixed and
furniture industry retail traffic is down about 15% from January
through October 2023, we believe the long-term economic outlook has
improved which bodes well for Hooker and the industry,” said Hoff.
“Reduced housing activity and high mortgage interest rates are
still challenging, but several positives have emerged since last
quarter. Core inflation is at the lowest level since 2021, the US
economy grew nearly 5% last quarter, unemployment remains at record
lows and a recession appears less likely.
“As mentioned earlier, current retail conditions
are soft, but consolidated orders are up $12.7 million, or 15.7%
for the third quarter. For the first nine months, consolidated
orders increased by $75.8 million or 33.5%,” Hoff said.
“As we look to the next quarter, we see flat
sales for our higher-priced Hooker Legacy brands as compared to the
prior year fourth quarter. We expect that the current downturn in
the furniture retail business will temporarily suppress sales
growth at HMI through the fourth quarter. However, significant new
retail product placements achieved by HMI recently should begin to
buoy sales by the first quarter of next fiscal year as the
placements generate orders and backlogs.
We believe a lot of our growth initiatives will
begin to gain traction in the first half of calendar 2024. We
believe that our focus on reducing costs, keeping our balance sheet
strong and judiciously deploying capital, along with our
investments to promote higher visibility and future growth will
continue to put us in the strongest possible position to leverage a
return of furniture demand to more typical levels,” Hoff
concluded.
Conference Call Details
Hooker Furnishings will present its fiscal 2024
third quarter financial results via teleconference and live
internet webcast on Thursday morning, December 7th, 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, fabric-upholstered
furniture, lighting, accessories, and home décor 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), 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, bobointriguingobjects.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 inflation and rising
interest rates, including their potential impact on (i) our sales
and operating costs and access to financing, (ii) customers, and
(iii) suppliers and their ability to obtain financing or generate
the cash necessary to conduct their respective businesses; (2) the
direct and indirect costs and time spent by our associates
associated with the implementation of our Enterprise Resource
Planning system (“ERP”), including costs resulting from
unanticipated disruptions to our business; (3) 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; (4) difficulties in forecasting demand
for our imported products and raw materials used in our domestic
operations; (5) 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; (6) 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; (7) the impairment of our long-lived
assets, which can result in reduced earnings and net worth; (8)
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; (9) 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; (10) risks associated with our Georgia
warehouse including the inability to realize anticipated cost
savings and subleasing excess space on favorable terms; (11) 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; (12) the risks related to the Sunset West 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; (13) the risks
related to the BOBO Intriguing Objects acquisition, including the
loss of a key BOBO employee, inconsistencies in standards,
controls, procedures and policies across the business which could
adversely affect our internal control or information systems and
failure to realize benefits anticipated from the BOBO Acquisition;
(14) 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; (15) 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; (16) 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; (17) 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; (18) our inability
to collect amounts owed to us or significant delays in collecting
such amounts; (19) 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;
(20) capital requirements and costs; (21) risks associated with
distribution through third-party retailers, such as non-binding
dealership arrangements; (22) the cost and difficulty of marketing
and selling our products in foreign markets; (23) changes in
domestic and international monetary policies and fluctuations in
foreign currency exchange rates affecting the price of our imported
products and raw materials; (24) price competition in the furniture
industry; (25) competition from non-traditional outlets, such as
internet and catalog retailers; and (26) changes in consumer
preferences, including increased demand for lower-priced furniture;
and (27) 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 |
|
Thirty-Nine Weeks Ended |
|
|
October 29, |
October 30, |
|
October 29, |
October 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
116,831 |
|
|
$ |
151,580 |
|
|
$ |
336,452 |
|
|
$ |
451,803 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
83,121 |
|
|
|
119,572 |
|
|
|
251,495 |
|
|
|
359,281 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
33,710 |
|
|
|
32,008 |
|
|
|
84,957 |
|
|
|
92,522 |
|
|
|
|
|
|
|
|
|
|
Selling and administrative expenses |
|
|
24,016 |
|
|
|
24,712 |
|
|
|
70,207 |
|
|
|
72,255 |
|
Intangible asset amortization |
|
|
924 |
|
|
|
878 |
|
|
|
2,732 |
|
|
|
2,634 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
8,770 |
|
|
|
6,418 |
|
|
|
12,018 |
|
|
|
17,633 |
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
659 |
|
|
|
191 |
|
|
|
1,071 |
|
|
|
425 |
|
Interest expense, net |
|
|
364 |
|
|
|
434 |
|
|
|
1,197 |
|
|
|
546 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
9,065 |
|
|
|
6,175 |
|
|
|
11,892 |
|
|
|
17,512 |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
2,027 |
|
|
|
1,334 |
|
|
|
2,620 |
|
|
|
3,946 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,038 |
|
|
$ |
4,841 |
|
|
$ |
9,272 |
|
|
$ |
13,566 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.66 |
|
|
$ |
0.42 |
|
|
$ |
0.85 |
|
|
$ |
1.16 |
|
Diluted |
|
$ |
0.65 |
|
|
$ |
0.42 |
|
|
$ |
0.85 |
|
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,536 |
|
|
|
11,465 |
|
|
|
10,748 |
|
|
|
11,736 |
|
Diluted |
|
|
10,676 |
|
|
|
11,525 |
|
|
|
10,878 |
|
|
|
11,838 |
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.22 |
|
|
$ |
0.20 |
|
|
$ |
0.66 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
Table II |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the |
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
October 29, |
|
October 30, |
|
October 29, |
October 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,038 |
|
|
$ |
4,841 |
|
|
$ |
9,272 |
|
|
$ |
13,566 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
Amortization of actuarial (gain)/loss |
|
|
(70 |
) |
|
|
21 |
|
|
|
(209 |
) |
|
|
62 |
|
Income tax effect on amortization |
|
|
17 |
|
|
|
(5 |
) |
|
|
50 |
|
|
|
(15 |
) |
Adjustments to net periodic benefit cost |
|
|
(53 |
) |
|
|
16 |
|
|
|
(159 |
) |
|
|
47 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
$ |
6,985 |
|
|
$ |
4,857 |
|
|
$ |
9,113 |
|
|
$ |
13,613 |
|
|
|
|
|
|
|
|
|
|
|
Table III |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
As of |
|
October 29, |
|
January 29, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
39,795 |
|
|
$ |
19,002 |
|
Trade accounts receivable, net |
|
|
59,065 |
|
|
|
62,129 |
|
Inventories |
|
|
65,156 |
|
|
|
96,675 |
|
Income tax recoverable |
|
|
3,073 |
|
|
|
3,079 |
|
Prepaid expenses and other current assets |
|
|
5,934 |
|
|
|
6,418 |
|
Total current assets |
|
|
173,023 |
|
|
|
187,303 |
|
Property, plant and equipment, net |
|
|
29,079 |
|
|
|
27,010 |
|
Cash surrender value of life insurance policies |
|
|
28,264 |
|
|
|
27,576 |
|
Deferred taxes |
|
|
11,959 |
|
|
|
14,484 |
|
Operating leases right-of-use assets |
|
|
54,202 |
|
|
|
68,949 |
|
Intangible assets, net |
|
|
29,547 |
|
|
|
31,779 |
|
Goodwill |
|
|
15,036 |
|
|
|
14,952 |
|
Other assets |
|
|
13,388 |
|
|
|
9,663 |
|
Total non-current assets |
|
|
181,475 |
|
|
|
194,413 |
|
Total assets |
|
$ |
354,498 |
|
|
$ |
381,716 |
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Current portion of long-term debt |
|
$ |
1,393 |
|
|
$ |
1,393 |
|
Trade accounts payable |
|
|
23,294 |
|
|
|
16,090 |
|
Accrued salaries, wages and benefits |
|
|
6,716 |
|
|
|
9,290 |
|
Customer deposits |
|
|
5,033 |
|
|
|
8,511 |
|
Current portion of lease liabilities |
|
|
7,045 |
|
|
|
7,316 |
|
Other accrued expenses |
|
|
3,135 |
|
|
|
7,438 |
|
Total current liabilities |
|
|
46,616 |
|
|
|
50,038 |
|
Long term debt |
|
|
21,829 |
|
|
|
22,874 |
|
Deferred compensation |
|
|
7,737 |
|
|
|
8,178 |
|
Operating lease liabilities |
|
|
49,651 |
|
|
|
63,762 |
|
Other long-term liabilities |
|
|
877 |
|
|
|
843 |
|
Total long-term liabilities |
|
|
80,094 |
|
|
|
95,657 |
|
Total liabilities |
|
|
126,710 |
|
|
|
145,695 |
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
Common stock, no par value, 20,000 shares
authorized, |
|
|
|
|
10,672 and 11,197 shares issued and outstanding on
each date |
|
49,503 |
|
|
|
50,770 |
|
Retained earnings |
|
|
177,579 |
|
|
|
184,386 |
|
Accumulated other comprehensive income |
|
|
706 |
|
|
|
865 |
|
Total shareholders' equity |
|
|
227,788 |
|
|
|
236,021 |
|
Total liabilities and shareholders' equity |
|
$ |
354,498 |
|
|
$ |
381,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Table IV |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
|
|
|
For the |
|
|
Thirty-Nine Weeks Ended |
|
|
October 29, |
|
October 30, |
|
|
|
2023 |
|
|
|
2022 |
|
Operating Activities: |
|
|
|
|
Net income |
|
$ |
9,272 |
|
|
$ |
13,566 |
|
Adjustments to reconcile net income to net cash |
|
|
|
|
provided by/(used in) operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
6,626 |
|
|
|
6,578 |
|
Deferred income tax expense |
|
|
2,575 |
|
|
|
1,650 |
|
Noncash restricted stock and performance awards |
|
|
1,685 |
|
|
|
1,323 |
|
Provision for doubtful accounts and sales allowances |
|
|
(270 |
) |
|
|
(3,831 |
) |
Gain on life insurance policies |
|
|
(784 |
) |
|
|
(744 |
) |
Loss on sales of assets |
|
|
29 |
|
|
|
- |
|
Changes in assets and liabilities: |
|
|
|
|
Trade accounts receivable |
|
|
3,334 |
|
|
|
3,069 |
|
Inventories |
|
|
33,264 |
|
|
|
(56,343 |
) |
Income tax recoverable |
|
|
5 |
|
|
|
2,357 |
|
Prepaid expenses and other assets |
|
|
(3,400 |
) |
|
|
(5,863 |
) |
Trade accounts payable |
|
|
7,169 |
|
|
|
(1,522 |
) |
Accrued salaries, wages, and benefits |
|
|
(2,574 |
) |
|
|
936 |
|
Customer deposits |
|
|
(3,477 |
) |
|
|
(1,277 |
) |
Operating lease assets and liabilities |
|
|
366 |
|
|
|
(238 |
) |
Other accrued expenses |
|
|
(4,400 |
) |
|
|
(391 |
) |
Deferred compensation |
|
|
(650 |
) |
|
|
(419 |
) |
Net cash provided by/(used in) operating activities |
|
$ |
48,770 |
|
|
$ |
(41,149 |
) |
|
|
|
|
|
Investing Activities: |
|
|
|
|
Acquisitions |
|
|
(2,373 |
) |
|
|
(25,912 |
) |
Purchases of property and equipment |
|
|
(5,718 |
) |
|
|
(3,469 |
) |
Premiums paid on life insurance policies |
|
|
(378 |
) |
|
|
(464 |
) |
Proceeds of life insurance policies |
|
|
444 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(8,025 |
) |
|
|
(29,845 |
) |
|
|
|
|
|
Financing Activities: |
|
|
|
|
Purchase and retirement of common stock |
|
|
(11,674 |
) |
|
|
(9,359 |
) |
Cash dividends paid |
|
|
(7,228 |
) |
|
|
(7,117 |
) |
Payments for long-term loans |
|
|
(1,050 |
) |
|
|
(350 |
) |
Proceeds from long-term loans |
|
|
- |
|
|
|
25,000 |
|
Proceeds from revolving credit facility |
|
|
- |
|
|
|
36,190 |
|
Payments for revolving credit facility |
|
|
- |
|
|
|
(36,190 |
) |
Debt issuance cost |
|
|
- |
|
|
|
(38 |
) |
Net cash (used in)/provided by financing activities |
|
|
(19,952 |
) |
|
|
8,136 |
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
|
20,793 |
|
|
|
(62,858 |
) |
Cash and cash equivalents - beginning of year |
|
|
19,002 |
|
|
|
69,366 |
|
Cash and cash equivalents - end of quarter |
|
$ |
39,795 |
|
|
$ |
6,508 |
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Cash paid/(refund) for income taxes |
|
$ |
74 |
|
|
$ |
(1 |
) |
Cash paid for interest, net |
|
|
1,375 |
|
|
|
293 |
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
(Decrease)/Increase in lease liabilities arising from changes in
right-of-use assets |
|
$ |
(8,987 |
) |
|
$ |
7,402 |
|
Increase in property and equipment through accrued purchases |
|
|
35 |
|
|
|
112 |
|
|
|
|
|
|
|
|
|
Table V |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
NET SALES AND OPERATING INCOME/(LOSS) BY SEGMENT |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
October 29,2023 |
|
|
October 30,2022 |
|
|
October 29,2023 |
|
|
October 30,2022 |
|
|
|
|
% Net |
|
|
% Net |
|
|
% Net |
|
|
% Net |
Net sales |
|
|
Sales |
|
|
Sales |
|
|
Sales |
|
|
Sales |
Hooker Branded |
|
$ |
39,122 |
|
33.5% |
|
$ |
56,632 |
|
37.4% |
|
$ |
118,936 |
|
35.4% |
|
$ |
154,133 |
|
34.1% |
Home Meridian |
|
|
43,692 |
|
37.4% |
|
|
50,588 |
|
33.4% |
|
|
114,524 |
|
34.0% |
|
|
171,721 |
|
38.0% |
Domestic Upholstery |
|
|
32,559 |
|
27.9% |
|
|
43,436 |
|
28.7% |
|
|
98,555 |
|
29.3% |
|
|
122,982 |
|
27.2% |
All Other |
|
|
1,458 |
|
1.2% |
|
|
924 |
|
0.5% |
|
|
4,437 |
|
1.3% |
|
|
2,967 |
|
0.7% |
Consolidated |
|
$ |
116,831 |
|
100% |
|
$ |
151,580 |
|
100% |
|
$ |
336,452 |
|
100% |
|
$ |
451,803 |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
|
|
|
|
|
|
|
|
|
|
Hooker Branded |
|
$ |
7,287 |
|
18.6% |
|
$ |
5,860 |
|
10.3% |
|
$ |
13,298 |
|
11.2% |
|
$ |
16,423 |
|
10.7% |
Home Meridian |
|
|
923 |
|
2.1% |
|
|
(3,205 |
) |
-6.3% |
|
|
(4,532 |
) |
-4.0% |
|
|
(7,290 |
) |
-4.2% |
Domestic Upholstery |
|
|
688 |
|
2.1% |
|
|
3,823 |
|
8.8% |
|
|
2,739 |
|
2.8% |
|
|
8,288 |
|
6.7% |
All Other |
|
|
(128 |
) |
-8.8% |
|
|
(60 |
) |
-6.5% |
|
|
513 |
|
11.6% |
|
|
212 |
|
7.1% |
Consolidated |
|
$ |
8,770 |
|
7.5% |
|
$ |
6,418 |
|
4.2% |
|
$ |
12,018 |
|
3.6% |
|
$ |
17,633 |
|
3.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, contact: Paul A. Huckfeldt, Senior Vice
President & Chief Financial Officer, Phone: (276) 666-3949
Hooker Furnishings (NASDAQ:HOFT)
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De May 2024 a Jun 2024
Hooker Furnishings (NASDAQ:HOFT)
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De Jun 2023 a Jun 2024