Hooker Furnishings Corporation (NASDAQ-GS: HOFT), a global leader
in the design, production and marketing of home furnishings for
nearly a century, today reported results for its fiscal-year 2023
third quarter ended October 30, 2022.
Fiscal 2023 Third Quarter Highlights:
- Net sales for the quarter were $151.6 million, an
increase of $18.2 million, or 13.6%, compared to the prior-year
quarter. Higher sales were driven by revenue growth across all
divisions of the Domestic Upholstery segment, higher net sales at
Home Meridian and recovery in the H Contract
business.
- Gross profit and margin improved in all three segments.
Consolidated operating income was $6.4 million, and consolidated
net income was $4.8 million or $0.42 per diluted share for the
fiscal third quarter compared to a net loss of $1.2 million or
($0.10) per share for the comparable prior year
quarter.
- Global supply chain dynamics are stabilizing. Product
flow and lead times have improved, production levels are at full
capacity and ocean freight costs have lowered significantly. The
lower freight costs have not positively impacted our profitability
due to most of our warehouse inventory still carrying the higher
costs.
- Attendance at the recent Fall High Point Market was up
substantially, even above 2019 levels. HMI debuted a remodeled
100,000-square-foot showroom including a 10,000-square-foot area
showcasing its new Portfolio in-stock warehouse program of
bestsellers across brands. Portfolio aims to help HMI diversify and
expand its customer base.
- The Domestic Upholstery segment marked the seventh
consecutive quarter of double-digit sales increases with growth of
$14.1 million, or 48%. Along with the addition of sales from
recently acquired Sunset West, the domestically produced upholstery
companies Bradington-Young, Sam Moore and Shenandoah collectively
grew 18%.
- For the fiscal 2023 nine-month period, consolidated net
sales were $451.8 million, a decrease of $7.0 million or 1.5%, as
compared to a year ago. Consolidated net income was $13.6 million,
or $1.14 per diluted share, as compared to $15.7 million, or $1.30
per diluted share in the prior year nine-month
period.
Management Commentary
“Steady fulfillment of backlogs, full production
capacity, healthier inventory levels, and operational improvements
positively impacted our revenues this quarter,” said Jeremy Hoff,
chief executive officer. “We anticipate continued improvements
throughout these key areas within our organization as we approach
our fiscal year end. However, economic indicators are mixed and
there are potential headwinds including rising interest rates,
declining home sales and consumer confidence.”
“Year-over-year quarterly profitability gains
were driven by sales growth and successful mitigation of
supply-chain bottlenecks over the last two years,” Hoff said.
“Improving our operational costs and exiting unprofitable
businesses at HMI is beginning to show up in our margins and will
continue to improve profitability,” he said.
“New program and product introductions at the
well-attended Fall High Point Market created considerable
momentum,” Hoff said. “Our market launch of the in-stock Portfolio
program at HMI was very well-received,” Hoff said. “Portfolio’s
launch was a successful first step in expanding and diversifying
HMI’s customer base.”
“At Hooker Casegoods, we debuted the 92-piece
Charleston Collection, one of the largest introductions in our
history. The updated traditional styling, clean finishes and accent
color finishes were met with enthusiasm from retailers who believe
there’s a void for classic designs in the marketplace, a
furnishings style that’s sought-after by a significant set of
younger consumers in their prime furniture-buying years. This
collection will be shipped before the next High Point Market in
Spring 2023, before the grand opening of our new Hooker Legacy
showroom in High Point.”
Segment Reporting: Hooker
Branded
- The Hooker Branded segment’s fiscal third quarter net sales
decreased by $1.3 million, or 2.4%, compared to the same period a
year ago. The lower sales were due to a temporary inventory mix
issue as some vendor-factory shipments were received in our
warehouses as incomplete collections missing some pieces, and
retailers delayed receipt of orders until collections and groups
could ship complete.
- Despite the sales dip, gross profit increased in the segment,
which reported $5.2 million in operating income and a 9.5%
operating margin for the quarter.
- Incoming orders decreased as compared to the prior year quarter
as the market is gradually returning to more typical levels of
demand. Quarter-end backlog was lower than the prior-year quarter
end but was still about three times higher than pre-pandemic levels
in calendar 2019.
“Inventory imbalances, which held up some
shipments, are resolving,” said Paul Huckfeldt, chief financial
officer. “Our Hooker Branded inventories are $44 million higher
than last year’s third quarter end, which we think positions us
well for the holiday selling seasons.”
Segment Reporting: Home
Meridian
- The Home Meridian segment’s net sales increased by $4.4
million, or 9.4%, as compared to the prior-year third quarter when
container-direct business was severely impacted by the temporary
COVID-related factory lockdowns in Vietnam and Malaysia. In
addition, the hospitality division reported strong sales as that
sector continues to recover from the COVID-related downturn.
- Sales increases to furniture chains, mass merchants and
hospitality customers were offset by the absence of clubs channel
sales, which we exited last year, and decreased ecommerce sales
mostly due to normalization of post-COVID consumer demand.
Additionally, HMI shipments were lower than expected due to
customers with high inventories delaying shipments.
- Incoming orders and backlogs decreased compared to last year
due to the absence of clubs channel orders as well as lower orders
from mass merchant retailers delaying shipments to rationalize
inventories.
- Due to deflated sales from delayed shipments and
higher-than-expected transition and labor costs related to the new
Georgia Distribution Center, HMI reported an operating loss of $3.2
million, a $7 million improvement from the operating loss in the
prior-year quarter, which was impacted by low volume, unrecovered
inbound freight costs, and costs related to exiting the
Ready-To-Assemble furniture business.
“HMI reported substantial improvement from last
year’s third quarter, but delayed shipments were a factor in the
quarterly operating loss. Recovery is somewhat constrained by
industry inventory conditions but we’re optimistic about the
longer-term, due to lowering freight and product costs, positive
feedback from the recent High Point Market and cost containment
efforts,” said Huckfeldt.
Segment Reporting: Domestic
Upholstery
- For the 7th consecutive quarter, the Domestic Upholstery
Segment reported double-digit sales growth, with net sales
increasing by $14.1 million, or 48.2%, compared to the prior year
third quarter.
- The increase was driven by the addition of Sunset West results
as well as organic sales growth at Bradington Young, Sam Moore and
Shenandoah, which each also delivered double-digit net sales gains
for the quarterly and nine-month periods.
- Incoming orders decreased as compared to the prior-year quarter
due to current demand, long lead times and high backlogs, but
year-to-date orders were at about the same level as calendar
2019.
- Quarter-end backlog was lower than the prior year quarter end
and fiscal 2022 year-end when demand was exceptionally strong while
production capacity was constrained. Comparing to calendar 2019,
quarter-end backlog was more than three times higher than
pre-pandemic levels.
Cash, Debt and Inventory
Cash and cash equivalents stood at $6.5 million
at fiscal 2023 third quarter-end, down $62.9 million from the
balance at the fiscal 2022 year-end due principally to a $58.9
million increase in inventory.
During the fiscal 2023 nine-month period, we
purchased and retired 598,000 shares of our common stock under the
$20 million share repurchase authorization approved by our Board of
Directors earlier this year.
“Even while spending $9.4 million on the share
repurchase, we have been generating cash since last quarter,”
Huckfeldt said. “With lead times reducing as much as they have, we
are aiming to reduce inventories by $25 million by roughly this
time next year, which will further improve our cash position. To
support the inventory reduction effort and improve liquidity, we
have also implemented targeted promotions on certain products,” he
said.
Capital Allocation
On December 5, 2022 the Company’s Board of
Directors declared a quarterly cash dividend of $0.22 per share
which will be paid on December 30, 2022 to shareholders of record
at December 16, 2022. “This 10% increase in the dividend is the
seventh consecutive year in which we have been able to increase our
annual dividend. We believe it demonstrates our continued
confidence in our strategy and business model,” said Huckfeldt.
Other capital allocation priorities include building a cash
reserve, fulfilling the remainder of the share repurchase
authorization, and capital investments in our soon-to-be
implemented ERP upgrade and other capital expenditures to improve
our competitive position, such as the outfitting of the new Hooker
Legacy brands showroom for its April 2023 opening.
Outlook
“Economic indicators are mixed and we are
closely monitoring potential disrupters including rising interest
rates, consumer confidence and a slowing housing market,” said
Hoff. “We’re paying close attention to economic indicators and
retail trends to ensure that our inventory planning and cost
structure are appropriate to short-to-mid-term conditions, while
continuing to invest in our longer-term strategies.”
“At the same time, we see reasons for optimism
as the U.S. enjoys strong levels of employment, rising household
incomes, and continuing strength in consumer spending. Our backlogs
on the legacy side are still much higher than pre-pandemic levels
and our recent entry into outdoor furniture with Sunset West is
performing above our expectations. Additionally, we expect to begin
to see the benefits of recent reductions in ocean freight costs
beginning in the first quarter of calendar 2023. We believe the
environment in the home furnishings industry is shifting from a
reliance on historic demand to a dependence on market share gains.
Strategically, we believe we are well positioned for this change in
landscape,” Hoff concluded.
Conference Call Details
Hooker Furnishings will present its fiscal 2023
third quarter financial results via teleconference and live
internet web cast on Thursday morning, December 8, 2022 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 98th 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, Sam Moore Furniture, a
specialist in upscale occasional chairs, settees, sofas and
sectional seating with an emphasis on cover-to-frame customization,
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 Accentrics Home, home furnishings centered around an
eclectic mix of unique pieces and materials that offer a fresh take
on home fashion, 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, 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., and Ho Chi Minh City, Vietnam. The company operates
distribution centers in North Carolina, Virginia, Georgia,
California, China and Vietnam. Please visit our websites
hookerfurnishings.com, hookerfurniture.com, bradington-young.com,
sammoore.com, hcontractfurniture.com, homemeridian.com,
pulaskifurniture.com, accentricshome.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; (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, ocean freight costs, including the price and
availability of shipping containers, ocean vessels 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)
the effect and consequences of the coronavirus (COVID-19) pandemic
or future pandemics on a wide range of matters including but not
limited to U.S. and local economies; our business operations and
continuity; the health and productivity of our employees; and the
impact on our global supply chain, inflation, the retail
environment and our customer base; (5) 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, such as the
prior U.S. administration’s imposition of a 25% tariff on certain
goods imported into the United States from China including almost
all furniture and furniture components manufactured in China, which
is still in effect, with the potential for additional or increased
tariffs in the future; (6) 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; (7) the risks related to the
recent Sunset West acquisition including integration costs, costs
related to Acquisition debt, 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 acquisition; (8) 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; (9) risks associated with product defects and changing
consumer product safety laws, including higher than expected costs
associated with product quality and safety, and regulatory
compliance costs related to the sale of consumer products and costs
related to defective or non-compliant products, including product
liability claims and costs to recall defective products and the
adverse effects of negative media coverage; (10) disruptions and
damage (including those due to weather) affecting our Virginia,
Georgia, North Carolina or California warehouses, our Virginia,
North Carolina and California administrative facilities, our North
Carolina and Las Vegas showrooms or our representative offices or
warehouses in Vietnam and China; (11) risks associated with our
newly leased warehouse space in Georgia, including risks associated
with our move to and occupation of the facility, including
information systems, access to warehouse labor and the inability to
realize anticipated cost savings; (12) 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; (13) our inability to collect amounts owed to us
or significant delays in collecting such amounts; (14) 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 or inadequate levels of cyber-insurance or risks not
covered by cyber- insurance; (15) 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; (16)
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; (17) the impairment of our long-lived
assets, which can result in reduced earnings and net worth; (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-quality, 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 30, 2022. 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 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share data) |
(Unaudited) |
|
|
For the |
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
October 30, 2022 |
|
October 31, 2021 |
|
October 30, 2022 |
|
October 31, 2021 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
151,580 |
|
$ |
133,428 |
|
|
$ |
451,803 |
|
$ |
458,807 |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
119,572 |
|
|
113,421 |
|
|
|
359,281 |
|
|
373,501 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
32,008 |
|
|
20,007 |
|
|
|
92,522 |
|
|
85,306 |
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses |
|
24,712 |
|
|
21,139 |
|
|
|
72,255 |
|
|
63,343 |
Intangible asset
amortization |
|
878 |
|
|
596 |
|
|
|
2,634 |
|
|
1,788 |
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
6,418 |
|
|
(1,728 |
) |
|
|
17,633 |
|
|
20,175 |
|
|
|
|
|
|
|
|
|
Other income,
net |
|
191 |
|
|
133 |
|
|
|
425 |
|
|
160 |
Interest expense,
net |
|
434 |
|
|
27 |
|
|
|
546 |
|
|
81 |
|
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
6,175 |
|
|
(1,622 |
) |
|
|
17,512 |
|
|
20,254 |
|
|
|
|
|
|
|
|
|
Income tax
expense/(benefit) |
|
1,334 |
|
|
(403 |
) |
|
|
3,946 |
|
|
4,563 |
|
|
|
|
|
|
|
|
|
Net income/(loss) |
$ |
4,841 |
|
$ |
(1,219 |
) |
|
$ |
13,566 |
|
$ |
15,691 |
|
|
|
|
|
|
|
|
|
Earnings/(Loss)
per share |
|
|
|
|
|
|
Basic |
$ |
0.42 |
|
$ |
(0.10 |
) |
|
$ |
1.16 |
|
$ |
1.32 |
Diluted |
$ |
0.42 |
|
$ |
(0.10 |
) |
|
$ |
1.14 |
|
$ |
1.30 |
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
Basic |
|
11,465 |
|
|
11,863 |
|
|
|
11,736 |
|
|
11,849 |
Diluted |
|
11,525 |
|
|
11,863 |
|
|
|
11,838 |
|
|
12,017 |
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share |
$ |
0.20 |
|
$ |
0.18 |
|
|
$ |
0.60 |
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Table II |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) |
(In thousands) |
(Unaudited) |
|
For the |
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
October 30, 2022 |
|
October 31, 2021 |
|
October 30, 2022 |
|
October 31, 2021 |
|
|
|
|
|
Net
income/(loss) |
$ |
4,841 |
|
|
$ |
(1,219 |
) |
|
$ |
13,566 |
|
|
$ |
15,691 |
|
Other comprehensive income: |
|
|
|
|
|
Amortization of actuarial loss |
|
21 |
|
|
|
100 |
|
|
|
62 |
|
|
|
301 |
|
Income tax effect on amortization |
|
|
(5 |
) |
|
|
(24 |
) |
|
|
(15 |
) |
|
|
(72 |
) |
Adjustments to net periodic benefit cost |
|
16 |
|
|
|
76 |
|
|
|
47 |
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss) |
$ |
4,857 |
|
|
$ |
(1,143 |
) |
|
$ |
13,613 |
|
|
$ |
15,920 |
|
|
|
|
|
|
|
|
|
|
Table III |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
As of |
|
October 30, |
|
January 30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
6,508 |
|
|
$ |
69,366 |
|
Trade accounts receivable, net |
|
|
76,049 |
|
|
|
73,727 |
|
Inventories |
|
|
133,943 |
|
|
|
75,023 |
|
Income tax recoverable |
|
|
2,003 |
|
|
|
4,361 |
|
Prepaid expenses and other current assets |
|
7,914 |
|
|
|
5,237 |
|
Total current assets |
|
|
226,417 |
|
|
|
227,714 |
|
Property, plant and equipment,
net |
|
|
27,704 |
|
|
|
28,058 |
|
Cash surrender
value of life insurance policies |
|
27,587 |
|
|
|
26,479 |
|
Deferred taxes |
|
|
9,947 |
|
|
|
11,612 |
|
Operating leases
right-of-use assets |
|
52,478 |
|
|
|
51,854 |
|
Intangible assets, net |
|
|
32,669 |
|
|
|
23,853 |
|
Goodwill |
|
|
14,952 |
|
|
|
490 |
|
Other assets |
|
|
8,497 |
|
|
|
4,499 |
|
Total non-current assets |
|
|
173,834 |
|
|
|
146,845 |
|
Total assets |
|
$ |
400,251 |
|
|
$ |
374,559 |
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Current portion of long-term debt |
|
$ |
1,393 |
|
|
$ |
- |
|
Trade accounts payable |
|
|
30,320 |
|
|
|
30,916 |
|
Accrued salaries, wages and benefits |
|
8,078 |
|
|
|
7,141 |
|
Customer deposits |
|
|
9,144 |
|
|
|
7,145 |
|
Current portion of lease liabilities |
|
|
6,922 |
|
|
|
7,471 |
|
Other accrued expenses |
|
|
3,679 |
|
|
|
4,264 |
|
Total current liabilities |
|
|
59,536 |
|
|
|
56,937 |
|
Long term debt |
|
|
23,222 |
|
|
|
- |
|
Deferred compensation |
|
|
9,443 |
|
|
|
9,924 |
|
Operating lease
liabilities |
|
|
47,504 |
|
|
|
46,570 |
|
Other long-term
liabilities |
|
|
957 |
|
|
|
- |
|
Total long-term
liabilities |
|
|
81,126 |
|
|
|
56,494 |
|
Total liabilities |
|
|
140,662 |
|
|
|
113,431 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Common stock, no par value, 20,000 shares
authorized, |
|
|
|
11,421 and 11,922 shares issued and outstanding on
each date |
|
51,868 |
|
|
|
53,295 |
|
Retained earnings |
|
|
207,725 |
|
|
|
207,884 |
|
Accumulated other
comprehensive loss |
|
(4 |
) |
|
|
(51 |
) |
Total shareholders’ equity |
|
|
259,589 |
|
|
|
261,128 |
|
Total liabilities and shareholders’ equity |
$ |
400,251 |
|
|
$ |
374,559 |
|
|
|
|
|
|
|
|
|
|
|
Table IV |
HOOKER FURNISHINGS CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
For the Thirty-Nine Weeks Ended |
|
October 30, |
|
October 31, |
|
|
2022 |
|
|
|
2021 |
|
Operating
Activities: |
|
|
Net income |
$ |
13,566 |
|
|
$ |
15,691 |
|
Adjustments to
reconcile net income to net cash |
(used in) /
provided by operating activities: |
Depreciation and amortization |
|
6,578 |
|
|
|
5,623 |
|
Deferred income tax expense |
|
1,650 |
|
|
|
2,266 |
|
Non-cash restricted stock and performance awards |
|
1,323 |
|
|
|
367 |
|
Provision for doubtful accounts and sales allowances |
|
(3,831 |
) |
|
|
474 |
|
Gain on life insurance policies |
|
(744 |
) |
|
|
(802 |
) |
Changes in assets and liabilities |
Trade accounts receivable |
|
3,069 |
|
|
|
9,230 |
|
Inventories |
|
(56,343 |
) |
|
|
(7,705 |
) |
Income tax recoverable |
|
2,357 |
|
|
|
(3,098 |
) |
Prepaid expenses and other current assets |
|
(5,863 |
) |
|
|
(4,074 |
) |
Trade accounts payable |
|
(1,522 |
) |
|
|
(15,632 |
) |
Accrued salaries, wages and benefits |
|
936 |
|
|
|
(1,140 |
) |
Accrued income taxes |
|
- |
|
|
|
(501 |
) |
Customer deposits |
|
(1,277 |
) |
|
|
2,294 |
|
Operating lease liabilities |
|
(238 |
) |
|
|
120 |
|
Other accrued expenses |
|
(391 |
) |
|
|
2,104 |
|
Deferred compensation |
|
(419 |
) |
|
|
(243 |
) |
Net cash (used in)/provided by operating activities |
|
(41,149 |
) |
|
|
4,974 |
|
|
|
|
|
Investing
Activities: |
|
|
Acquisitions |
|
(25,912 |
) |
|
|
- |
|
Purchases of property, plant and equipment |
|
(3,469 |
) |
|
|
(6,626 |
) |
Premiums paid on life insurance policies |
|
(464 |
) |
|
|
(533 |
) |
Net cash used in investing activities |
|
(29,845 |
) |
|
|
(7,159 |
) |
|
|
|
|
Financing
Activities: |
|
|
Proceeds from long-term loans |
|
25,000 |
|
|
|
- |
|
Payments for long-term loans |
|
(350 |
) |
|
|
- |
|
Proceeds from revolving credit facility |
|
36,190 |
|
|
|
- |
|
Payments for revolving credit facility |
|
(36,190 |
) |
|
|
- |
|
Debt issuance cost |
|
(38 |
) |
|
|
- |
|
Purchase and retirement of common stock |
|
(9,359 |
) |
|
|
- |
|
Cash dividends paid |
|
(7,117 |
) |
|
|
(6,437 |
) |
Cash provided by/(used in) financing activities |
|
8,136 |
|
|
|
(6,437 |
) |
|
|
|
|
Net
decrease in cash and cash
equivalents |
|
(62,858 |
) |
|
|
(8,622 |
) |
Cash and
cash equivalents at the beginning of
year |
|
69,366 |
|
|
|
65,841 |
|
Cash and
cash equivalents
at the end of year |
$ |
6,508 |
|
|
$ |
57,219 |
|
|
|
|
|
Supplemental
schedule of cash flow information: |
Income taxes paid/(refund),
net |
$ |
(1 |
) |
|
$ |
5,858 |
|
Interest paid, net |
|
293 |
|
|
|
1 |
|
|
|
|
|
Supplemental
schedule of noncash investing activities: |
Increase in lease liabilities
arising from changes in right-of-use assets |
$ |
7,402 |
|
|
$ |
23,736 |
|
Increase in property and
equipment through accrued purchases |
|
112 |
|
|
|
17 |
|
|
|
|
|
|
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 30, 2022 |
|
October 31, 2021 |
|
|
October 30, 2022 |
|
October 31, 2021 |
|
|
|
|
% Net |
|
% Net |
|
|
% Net |
|
% Net |
Net
sales |
|
Sales |
|
Sales |
|
|
Sales |
|
Sales |
Hooker Branded |
$ |
54,696 |
|
36.1 |
% |
$ |
56,037 |
|
42.0 |
% |
|
$ |
149,743 |
|
33.1 |
% |
$ |
157,304 |
|
34.3 |
% |
Home Meridian |
|
50,588 |
|
33.3 |
% |
|
46,230 |
|
34.6 |
% |
|
|
171,721 |
|
38.1 |
% |
|
217,964 |
|
47.5 |
% |
Domestic Upholstery |
|
43,436 |
|
28.7 |
% |
|
29,302 |
|
22.0 |
% |
|
|
122,982 |
|
27.2 |
% |
|
78,387 |
|
17.1 |
% |
All Other |
|
2,860 |
|
1.9 |
% |
|
1,859 |
|
1.4 |
% |
|
|
7,357 |
|
1.6 |
% |
|
5,152 |
|
1.1 |
% |
Consolidated |
$ |
151,580 |
|
100 |
% |
$ |
133,428 |
|
100 |
% |
|
$ |
451,803 |
|
100 |
% |
$ |
458,807 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
income/(loss) |
|
|
|
|
|
|
|
|
|
Hooker Branded |
$ |
5,217 |
|
9.5 |
% |
$ |
6,669 |
|
11.9 |
% |
|
$ |
15,431 |
|
10.3 |
% |
$ |
25,040 |
|
15.9 |
% |
Home Meridian |
|
(3,205 |
) |
-6.3 |
% |
|
(10,181 |
) |
-22.0 |
% |
|
|
(7,290 |
) |
-4.2 |
% |
|
(9,274 |
) |
-4.3 |
% |
Domestic Upholstery |
|
3,823 |
|
8.8 |
% |
|
1,589 |
|
5.4 |
% |
|
|
8,288 |
|
6.7 |
% |
|
3,890 |
|
5.0 |
% |
All Other |
|
583 |
|
20.4 |
% |
|
195 |
|
10.5 |
% |
|
|
1,204 |
|
16.4 |
% |
|
519 |
|
10.1 |
% |
Consolidated |
$ |
6,418 |
|
4.2 |
% |
$ |
(1,728 |
) |
-1.3 |
% |
|
$ |
17,633 |
|
3.9 |
% |
$ |
20,175 |
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
For more information, contact:Jeremy R.
Hoff, Chief Executive Officer and DirectorPhone:
(276) 632-2133, orPaul A. Huckfeldt, Senior Vice
President & Chief Financial OfficerPhone:
(276) 666-3949
Hooker Furnishings (NASDAQ:HOFT)
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