Hooker Furniture Corporation (NASDAQ-GS: HOFT) today reported
consolidated net sales of $610.8 million and net income of $17.1
million, or $1.44 per diluted share, for its 2020 fiscal year ended
February 2, 2020. Net sales decreased 10.6%, or $72.7 million,
compared to last year, and net income decreased 57.2%, or $22.8
million. Earnings per diluted share decreased 57% to $1.44 from
$3.38 a year ago.
The Company continually monitors its reportable
segments for changes in facts and circumstances to determine
whether changes in the identification or aggregation of operating
segments are necessary. In the fourth quarter of fiscal 2020, the
Company updated its reportable segments as follows: Domestic
upholstery producers Bradington-Young, Sam Moore and Shenandoah
Furniture were moved from All Other and aggregated into a new
reportable segment called “Domestic Upholstery.” All Other now
consists of H Contract and Lifestyle Brands. Lifestyle Brands is a
business in its start-up phase targeted at the interior designer
channel. The Hooker Branded and Home Meridian segments were
unchanged.
The fiscal 2020 sales decrease was impacted by a
$47.2 million or 12.2% sales decrease in the Home Meridian (HMI)
segment, and to a lesser extent by decreases in the Hooker Branded
and Domestic Upholstery segments, partially offset by a net sales
increase in All Other. Also contributing to the consolidated
revenue decrease was one week less of sales compared to the
previous fiscal year. Fiscal 2019 had 53 weeks, while fiscal 2020
had 52 weeks. The additional week in the prior year contributed
approximately $13.4 million to consolidated net sales based on the
average net sales per shipping day.
“This was a very challenging year in which we
faced the significant headwinds of 25% tariffs on finished goods
and component parts imported from China and industry-wide weak
retail demand,” said Paul B. Toms Jr., chairman and chief executive
officer. “The tariffs created a chain reaction of higher product
costs, higher selling prices to our customers and supply chain and
inventory disruptions. We deployed significant management and
financial resources to shift certain parts of our production to
factories in non-tariff countries, and successfully reduced our
reliance on Chinese factories by half during the year. Our top line
was hit by the tariff-related price increases that reduced retailer
and consumer demand, and our bottom line was adversely impacted by
higher costs, which lowered margins. Adding to these external
disruptions, we encountered an unexpected quality-related issue
with a single large HMI customer, resulting in chargebacks and lost
revenues. The sales decrease and chargebacks from this single
customer accounted for nearly 80% of HMI’s sales decline for the
year,” Toms said.
For the fiscal 2020 fourth quarter, which began
November 4, 2019 and ended February 2, 2020, consolidated net sales
were $164.9 million, with net income of $7.0 million, or $0.59 per
diluted share. Net sales decreased $35.6 million, or 17.8%,
compared to last year’s record fourth quarter sales, due to lower
sales across all reportable segments and essentially flat
sales in All Other. The shorter fiscal fourth quarter compared to
last year accounted for about 40% of the 17.8% decline in revenue
for the quarter. Net income decreased 52.2% compared to the
prior-year quarter.
“We met the challenges presented to us and
finished the year on a more positive note in the fourth quarter,
which was our strongest quarter of the year,” said Toms. “Compared
to the third quarter, consolidated fourth quarter sales were up
over 4%, and net income was up nearly 80%. Compared to the previous
year-end, our backlog was up over 9%. Also in the fourth quarter of
fiscal 2020, we put the excess chargebacks with the single large
HMI customer behind us and resolved the quality issue. Throughout
the year, we successfully executed our tariff mitigation and
resourcing strategies and reduced the amount of product we import
from China by about half, with factories in Vietnam and Malaysia
picking up most of the production moved out of China. In the Hooker
Branded and Domestic Upholstery segments, we were pleased to
maintain profitability at close to the same solid levels as the
prior year and slightly increased profitability in All Other,
despite the tariff headwinds and lower demand. Importantly, we
generated over $41 million in cash from operations and paid down
debt on schedule, ending the year with $25 million more in cash
compared to the prior year, and have grown cash another $15 million
through April 13th. During the year, we launched new divisions,
product lines and merchandising programs and strengthened our
management team. Together, we overcame challenges on multiple
fronts,” he said.
“Just as we were finishing the fourth quarter in
late January, we began to hear an increasing number of reports
about the emergence of COVID-19 originating in China, and our
initial concern was that our Asian supply chain would be disrupted.
Since then, everything has changed, dramatically impacting our
outlook for the next quarter and beyond, which we will discuss in
detail later in the release,” Toms said.
Segment Reporting: Hooker
Branded
Net sales for the Hooker Branded segment
decreased $16.7 million, or 9.4% in fiscal 2020, with Hooker
Casegoods reporting an 11% sales decrease, partially offset by a
modest sales increase at Hooker Upholstery.
Hooker Upholstery’s positive sales despite the
industry-wide downturn were driven by a broader line of
well-received product offerings and a favorable product mix
including higher-priced sofas and sectionals, leading to a 9%
increase in incoming orders as compared to the prior year and a 37%
increase in backlogs at year-end.
While sales were down at Hooker Casegoods,
“Products and collections introduced in the last several market
cycles such as Ciao Bella, LaGrange and Sanctuary II have quickly
made their way into our top 10 selling collections,” said Jeremy
Hoff, president of Hooker Legacy Brands. He added, “We were able to
maintain strong profitability despite the sales shortfall.”
Segment Reporting: Home
Meridian
Net sales in the Home Meridian segment decreased
$47.2 million or 12.2% in fiscal 2020 largely due to chargebacks
and loss of revenues with the single large customer. The sales
decline, excess tariff and higher resourcing transition costs led
to a $7.2 million operating loss for fiscal 2020 for the segment.
Both the sales shortfall and the operating loss were largely driven
by the quality-related issue with the single large customer, along
with a sales dip with traditional furniture chains. HMI also
experienced a greater negative impact on profitability from tariffs
due to the nature of the segment’s distribution base. “Because the
majority of our products are shipped directly from Asian
manufacturing partners rather than stocked in US warehouses, HMI
was unable to build inventory before the 25% tariff was enacted,”
said Lee Boone, co-president of HMI. “In addition, we were unable
to recover all the excess tariff costs through price increases due
to the more price-sensitive nature of many of our large
customers.”
For the fourth quarter, despite a $21.2 million
or a 17.5% sales decrease, Home Meridian reported $1.8 million in
operating income and finished fiscal 2020 with a backlog 8.3% over
the previous year. “While our fourth quarter results are still well
below our past performance, they are a significant improvement over
the first three quarters of fiscal 2020, indicating that our
turnaround strategies are delivering positive results,” Boone said.
He added, “After years of consistent growth and profitability, FY20
was especially difficult for HMI, one in which we faced unique
challenges that forced us to examine every aspect of our business
for improvement. We changed some leadership, reorganized certain
business units, launched a new business unit, moved away from a few
non-performing manufacturing partners and re-emphasized our
merchandising and sales strategies on winning products, customers
and sales channels. We believe we are entering FY21 as a more
capable company, and expect significant improvement once the
international health, economic and social crisis of the COVID-19
pandemic is stabilized,” he said.
Segment Reporting: Domestic
Upholstery
Net sales decreased $10.9 million or 10.2% in
fiscal 2020 due to reduced unit volume as a result of soft retail
conditions. Bradington-Young and Sam Moore experienced reduced
incoming orders throughout fiscal 2020, while Shenandoah’s incoming
orders picked up in the fourth quarter versus the first three
quarters of fiscal 2020. Despite decreased net sales, Domestic
Upholstery’s operating margin was essentially unchanged as compared
to fiscal 2019.
Segment Reporting: All
Other
All Other net sales increased $2.1 million, or
20.7% in fiscal 2020, primarily due to strong net sales at our H
Contract division. H Contract, which serves senior living
facilities and retirement centers, continued on a growth trajectory
with a 15% increase in incoming orders in fiscal 2020, and finished
the year with backlogs 28% over the previous period. “The 20% sales
growth at H Contract, along with 40% growth in our other
non-residential business unit, HMI’s Samuel Lawrence Hospitality,
affirms our strategy to diversify our business beyond residential
furnishings to include contract furnishings as well,” Toms
said.
Cash, Debt and Inventory
Despite disappointing operating results, the
Company generated $41.4 million in cash from operations, and
finished fiscal 2020 with $36 million in cash and cash equivalents
and $30 million in acquisition-related debt. In the third quarter
of fiscal 2020, the Company’s Board of Directors approved the
increase of the quarterly dividend to $0.16 per share, an increase
of 6.7% or $0.01 per share, for a total of $0.61 per share or about
$7.2 million paid in fiscal 2020, an increase of 7.0% or $0.04 per
share. The Company also paid $6.4 million in principal and interest
on its term loans and $5.1 million for capital expenditures to
expand its manufacturing facilities. At year-end, $25.7 million was
available on its $30 million revolving credit facility, net of $4.3
million reserved for standby letters of credit. Additionally, the
Company had access to $24.9 million in cash surrender value of
Company-owned life insurance policies. Consolidated inventories
stood at $92.8 million.
Total assets and liabilities as of February 2,
2020 each increased approximately $40 million due to the adoption
of Topic 842, Leases on the first day of the 2020 fiscal year.
Outlook
“The COVID-19 pandemic presents an economic
challenge of unprecedented proportions with an uncertain time
frame,” said Toms. “In the last several weeks, we’ve seen an
erratic stock market and spike in unemployment claims, supply chain
disruptions and the cancellation of business, social, sporting,
academic and religious gatherings, including High Point Premarket
and the postponement of the Spring High Point Market. Some of our
customers have closed temporarily as many communities across the
country are under stay-at-home orders from state and local
authorities. We have also seen a spike in order cancellations over
the last few weeks, which has blunted some of the strong backlog we
saw at year-end. Because of these factors, we are preparing for a
significant downturn lasting anywhere from four to six months. We
have strategies in place to preserve cash and reduce operating
expenses, including salary reductions for all of our officers and
certain other managers, strategic staff reductions, the temporary
closure of our domestic manufacturing plants, delaying all
non-critical capital spending, rationalizing current import
purchase orders and working with our vendors to cut costs and
extend payment terms where we can.
While we built significant cash last year and
have enhanced our cash position further so far this year, some
customers have taken or are expected to take extended payment terms
and we expect cash collections to slow. However, our
lower-fixed-cost, broad-distribution business model gives us more
flexibility to scale our business up or down. We’re also fortunate
to have a strong presence in e-commerce, since that channel is
holding up during this crisis so far. In our 95 years of business,
our company has been through recessions, a depression, a World War,
terrorist attacks, natural disasters and many other crises. We have
endured each time by coming together, working as a team, making
prudent decisions and not letting fear cripple us.
I’m proud that our team is coming together to
meet these challenges, just as we came together to meet
multifaceted challenges last year; however, the breadth and depth
of the COVID-19 crisis and the related economic downturn and its
effects on our sales, earnings and liquidity is currently unknown,”
Toms concluded.
Conference Call Details
Hooker Furniture will present its fiscal 2020
fourth quarter financial results via teleconference and live
internet web cast on Tuesday morning, April 14, 2020 at 9:00 AM
Eastern Time. Due to increased conference call volume noted by
service providers, the Company encourages call participants to dial
in at least fifteen minutes prior to the start of the call.
The dial-in number for domestic callers is 877.665.2466 and the
number for international callers is 678.894.3031. The conference ID
number is 5175838. The call will be simultaneously web cast and
archived for replay on the Company's web site at
www.hookerfurniture.com in the Investor Relations section.
Hooker Furniture Corporation, in its 95th 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. It is ranked among the nation’s largest publicly traded
furniture sources, based on 2018 shipments to U.S. retailers,
according to a 2019 survey by a leading trade publication. 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 Furniture
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, 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. Hooker Furniture
Corporation’s corporate offices and upholstery manufacturing
facilities are located in Virginia and North Carolina, with
showrooms in High Point, N.C. and Ho Chi Minh City, Vietnam. The
company operates eight distribution centers in North Carolina,
Virginia, California and Vietnam. Please visit our websites
hookerfurniture.com, bradington-young.com, sammoore.com,
hcontractfurniture.com, homemeridian.com, pulaskifurniture.com,
accentricshome.com and slh-co.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, and instability
in the financial and credit markets, including their potential
impact on our (i) 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) 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 current
U.S. administration imposing a 25% tariff on certain goods imported
into the United States from China, including almost all furniture
and furniture components manufactured in China, with the potential
for additional or increased tariffs in the future; (3) sourcing
transitions away from China, including the lack of adequate
manufacturing capacity and skilled labor and longer lead times, due
to competition and increased demand for resources in those
countries; (4) risks associated with our reliance on offshore
sourcing and the cost of imported goods, including fluctuation in
the prices of purchased finished goods, ocean freight costs and
warehousing costs and the risk that a disruption in our offshore
suppliers could adversely affect our ability to timely fill
customer orders; (5) 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; (6) disruptions
involving our vendors or the transportation and handling
industries, particularly those affecting imported products from
Vietnam and China, including customs issues, labor stoppages,
strikes or slowdowns and the availability of shipping containers
and cargo ships; (7) difficulties in forecasting demand for our
imported products; (8) risks associated with product defects,
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; (9) disruptions and damage
(including due to weather) affecting our Virginia, North Carolina
or California warehouses, our Virginia or North Carolina
administrative facilities or our representative offices or
warehouses in Vietnam and China; (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
specifically related to the concentrations of a material part of
our sales and accounts receivable in only a few customers; (12) our
inability to collect amounts owed to us; (13) 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; (14) achieving and managing growth and change, and the
risks associated with new business lines, acquisitions,
restructurings, strategic alliances and international operations;
(15) higher than expected employee medical and workers’
compensation costs that may increase the cost of our
high-deductible healthcare and workers compensation plans; (16)
product liability claims; (17) risks related to our other
defined benefit plans; (18) the possible impairment of our
long-lived assets, which can result in reduced earnings and net
worth; (19) capital requirements and costs, including the servicing
of our floating-rate term loans; (20) risks associated with
distribution through third-party retailers, such as non-binding
dealership arrangements; (21) the cost and difficulty of marketing
and selling our products in foreign markets; (22) changes in
domestic and international monetary policies and fluctuations in
foreign currency exchange rates affecting the price of our imported
products and raw materials; (23) 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; (24) price competition in the furniture industry; (25)
competition from non-traditional outlets, such as internet and
catalog retailers; (26) changes in consumer preferences, including
increased demand for lower-quality, lower-priced furniture due to,
among other things, fluctuating consumer confidence, amounts of
discretionary income available for furniture purchases and the
availability of consumer credit; (27) the impact on the Company and
its operations and sales related to the coronavirus (COVID-19)
pandemic and/or future pandemics; and (28) 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
February 2, 2020. 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
FURNITURE CORPORATION AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
(In thousands,
except per share data) |
|
|
|
|
Thirteen
Weeks Ended |
|
Fourteen Weeks
Ended |
|
Fifty-Two
Weeks Ended |
|
Fifty-Three Weeks
Ended |
|
|
February
2, |
|
February 3, |
|
February
2, |
|
February 3, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
164,882 |
|
$ |
200,475 |
|
$ |
610,824 |
|
$ |
683,501 |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
133,665 |
|
|
156,935 |
|
|
496,866 |
|
|
536,014 |
Casualty loss |
|
- |
|
|
- |
|
|
- |
|
|
500 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
31,217 |
|
|
43,540 |
|
|
113,958 |
|
|
146,987 |
|
|
|
|
|
|
|
|
|
Selling and administrative expenses |
|
21,581 |
|
|
23,777 |
|
|
88,867 |
|
|
91,928 |
Intangible asset amortization |
|
596 |
|
|
596 |
|
|
2,384 |
|
|
2,384 |
|
|
|
|
|
|
|
|
|
Operating income |
|
9,040 |
|
|
19,167 |
|
|
22,707 |
|
|
52,675 |
|
|
|
|
|
|
|
|
|
Other income, net |
|
243 |
|
|
91 |
|
|
458 |
|
|
369 |
Interest expense, net |
|
252 |
|
|
354 |
|
|
1,238 |
|
|
1,454 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
9,031 |
|
|
18,904 |
|
|
21,927 |
|
|
51,590 |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
2,015 |
|
|
4,213 |
|
|
4,844 |
|
|
11,717 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
7,016 |
|
$ |
14,691 |
|
$ |
17,083 |
|
$ |
39,873 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.59 |
|
$ |
1.25 |
|
$ |
1.44 |
|
$ |
3.38 |
Diluted |
$ |
0.59 |
|
$ |
1.24 |
|
$ |
1.44 |
|
$ |
3.38 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
Basic |
|
11,790 |
|
|
11,763 |
|
|
11,784 |
|
|
11,759 |
Diluted |
|
11,840 |
|
|
11,784 |
|
|
11,838 |
|
|
11,783 |
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.61 |
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
Table
II |
HOOKER
FURNITURE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME |
(In
thousands) |
|
|
|
|
Thirteen
Weeks Ended |
|
Fourteen Weeks
Ended |
|
Fifty-Two
Weeks Ended |
|
Fifty-Three Weeks
Ended |
|
|
February
2, |
|
February 3, |
|
February
2, |
|
February 3, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
7,016 |
|
|
$ |
14,691 |
|
|
$ |
17,083 |
|
|
$ |
39,873 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Gain on pension plan settlement |
|
|
- |
|
|
|
- |
|
|
|
(520 |
) |
|
|
- |
|
Income tax effect on settlement |
|
|
- |
|
|
|
- |
|
|
|
124 |
|
|
|
- |
|
Amortization of actuarial (loss) gain |
|
|
(851 |
) |
|
|
(434 |
) |
|
|
(740 |
) |
|
|
(305 |
) |
Income tax effect on amortization |
|
|
203 |
|
|
|
104 |
|
|
|
176 |
|
|
|
73 |
|
Adjustments to net periodic benefit cost |
|
|
(648 |
) |
|
|
(330 |
) |
|
|
(960 |
) |
|
|
(232 |
) |
|
|
|
|
|
|
|
|
|
Reclassification of tax effects due to the adoption of |
|
|
|
|
|
|
|
|
ASU 2018-02 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
111 |
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income |
|
$ |
6,368 |
|
|
$ |
14,361 |
|
|
$ |
16,123 |
|
|
$ |
39,752 |
|
|
|
|
|
|
|
|
|
|
Table
III |
|
HOOKER
FURNITURE CORPORATION AND SUBSIDIARIES |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of |
|
February 2, |
|
February 3, |
|
|
|
|
2020 |
|
|
|
2019 |
|
Assets |
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
36,031 |
|
|
$ |
11,435 |
|
Trade accounts receivable, net |
|
|
87,653 |
|
|
|
112,557 |
|
Inventories |
|
|
92,813 |
|
|
|
105,204 |
|
Income tax recoverable |
|
|
751 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
|
4,719 |
|
|
|
5,735 |
|
Total current assets |
|
|
221,967 |
|
|
|
234,931 |
|
Property,
plant and equipment, net |
|
|
29,907 |
|
|
|
29,482 |
|
Cash
surrender value of life insurance policies |
|
|
24,888 |
|
|
|
23,816 |
|
Deferred
taxes |
|
|
2,880 |
|
|
|
4,522 |
|
Operating
leases right-of-use assets |
|
|
39,512 |
|
|
|
- |
|
Intangible
assets, net |
|
|
33,371 |
|
|
|
35,755 |
|
Goodwill |
|
|
40,058 |
|
|
|
40,058 |
|
Other
assets |
|
|
1,125 |
|
|
|
1,152 |
|
Total non-current assets |
|
|
171,741 |
|
|
|
134,785 |
|
Total assets |
|
$ |
393,708 |
|
|
$ |
369,716 |
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Current portion of term loans |
|
$ |
5,834 |
|
|
$ |
5,829 |
|
Trade accounts payable |
|
|
25,493 |
|
|
|
40,838 |
|
Accrued salaries, wages and benefits |
|
|
4,933 |
|
|
|
8,002 |
|
Income tax accrual |
|
|
- |
|
|
|
3,159 |
|
Customer deposits |
|
|
3,351 |
|
|
|
3,023 |
|
Current portion of lease liabilities |
|
|
6,307 |
|
|
|
- |
|
Other accrued expenses |
|
|
4,211 |
|
|
|
3,564 |
|
Total current liabilities |
|
|
50,129 |
|
|
|
64,415 |
|
Long term
debt |
|
|
24,282 |
|
|
|
29,628 |
|
Deferred
compensation |
|
|
11,382 |
|
|
|
11,513 |
|
Lease
liabilities |
|
|
33,794 |
|
|
|
- |
|
Other
long-term liabilities |
|
|
- |
|
|
|
984 |
|
Total
long-term liabilities |
|
|
69,458 |
|
|
|
42,125 |
|
Total liabilities |
|
|
119,587 |
|
|
|
106,540 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
Common stock, no par value, 20,000 shares
authorized, 11,838 and 11,785 shares issued and
outstanding on each date |
|
51,582 |
|
|
|
49,549 |
|
Retained earnings |
|
|
223,252 |
|
|
|
213,380 |
|
Accumulated other comprehensive (loss)/income |
|
|
(713 |
) |
|
|
247 |
|
Total shareholders’ equity |
|
|
274,121 |
|
|
|
263,176 |
|
Total liabilities and shareholders’ equity |
|
$ |
393,708 |
|
|
$ |
369,716 |
|
|
|
|
|
|
|
Table
IV |
HOOKER
FURNITURE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In thousands) |
|
|
|
|
|
Fifty-Two
Weeks Ended |
|
Fifty-Three Weeks
Ended |
|
February
2, |
|
February 3, |
|
|
2020 |
|
|
|
2019 |
|
Operating Activities: |
|
|
|
Net
income |
$ |
17,083 |
|
|
$ |
39,873 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
7,100 |
|
|
|
7,442 |
|
Gain on pesion plan settlement |
|
(520 |
) |
|
|
- |
|
Gain on disposal of assets |
|
(271 |
) |
|
|
(73 |
) |
Proceeds from Casualty Loss |
|
- |
|
|
|
409 |
|
Deferred income tax expense (benefit) |
|
1,940 |
|
|
|
(1,221 |
) |
Non-cash restricted stock and performance awards |
|
1,296 |
|
|
|
1,284 |
|
Provision for doubtful accounts and sales allowances |
|
(435 |
) |
|
|
(799 |
) |
Gain on life insurance policies |
|
(831 |
) |
|
|
(748 |
) |
Changes in assets and liabilities |
|
|
|
Trade accounts receivable |
|
25,339 |
|
|
|
(17,982 |
) |
Inventories |
|
12,391 |
|
|
|
(21,323 |
) |
Income tax recoverable |
|
(751 |
) |
|
|
- |
|
Prepaid expenses and other current assets |
|
(557 |
) |
|
|
267 |
|
Trade accounts payable |
|
(15,349 |
) |
|
|
8,130 |
|
Accrued salaries, wages and benefits |
|
(3,070 |
) |
|
|
(1,643 |
) |
Accrued income taxes |
|
(3,159 |
) |
|
|
(672 |
) |
Customer deposits |
|
328 |
|
|
|
(1,270 |
) |
Operating lease liabilities |
|
299 |
|
|
|
- |
|
Other accrued expenses |
|
645 |
|
|
|
604 |
|
Deferred compensation |
|
(49 |
) |
|
|
(2,757 |
) |
Other long-term liabilities |
|
- |
|
|
|
141 |
|
Net cash provided by operating activities |
|
41,429 |
|
|
|
9,662 |
|
|
|
|
|
Investing Activities: |
|
|
|
Purchases of property, plant and equipment |
|
(5,129 |
) |
|
|
(5,214 |
) |
Proceeds received on notes receivable |
|
1,449 |
|
|
|
119 |
|
Proceeds from sale of property and equipment |
|
16 |
|
|
|
11 |
|
Premiums paid on life insurance policies |
|
(590 |
) |
|
|
(652 |
) |
Proceeds received on life insurance policies |
|
- |
|
|
|
1,225 |
|
Net cash used in investing activities |
|
(4,254 |
) |
|
|
(4,511 |
) |
|
|
|
|
Financing Activities: |
|
|
|
Payments for long-term debt |
|
(5,368 |
) |
|
|
(17,917 |
) |
Cash dividends paid |
|
(7,211 |
) |
|
|
(6,714 |
) |
Net cash used in financing activities |
|
(12,579 |
) |
|
|
(24,631 |
) |
|
|
|
|
Net
increase / (decrease) in cash and cash equivalents |
|
24,596 |
|
|
|
(19,480 |
) |
Cash
and cash equivalents at the beginning of year |
|
11,435 |
|
|
|
30,915 |
|
Cash
and cash equivalents at the end of year |
$ |
36,031 |
|
|
$ |
11,435 |
|
|
|
|
|
Supplemental
schedule of cash flow information: |
|
|
|
Interest
paid, net |
$ |
993 |
|
|
$ |
1,338 |
|
Income taxes
paid, net |
|
6,818 |
|
|
|
13,613 |
|
|
|
|
|
Supplemental
schedule of noncash investing activities: |
|
|
|
Increase in
lease liabilities arising from obtaining right-of-use assets |
$ |
625 |
|
|
$ |
- |
|
Increase in
property and equipment through accrued purchases |
|
5 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
Table
V |
|
HOOKER
FURNITURE CORPORATION AND SUBSIDIARIES |
|
NET SALES AND
OPERATING INCOME (LOSS) BY SEGMENT |
|
(In
thousands) |
|
Unaudited |
|
|
|
|
|
13 Weeks
Ended |
|
|
14 Weeks Ended |
|
|
|
52 Weeks
Ended |
|
|
53 Weeks Ended |
|
|
|
|
|
February
2, |
|
February 3, |
|
|
|
February
2, |
|
February 3, |
|
|
|
|
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
|
|
|
%
Net |
|
% Net |
|
|
%
Net |
|
% Net |
|
Net
Sales |
|
|
Sales |
|
Sales |
|
|
Sales |
|
Sales |
|
Hooker Branded |
|
$ |
39,282 |
23.8% |
$ |
48,909 |
24.4% |
|
$ |
161,990 |
|
26.4% |
$ |
178,710 |
26.2% |
|
Home
Meridian |
|
|
100,036 |
60.7% |
|
121,194 |
60.5% |
|
|
340,630 |
|
55.8% |
|
387,825 |
56.7% |
|
Domestic Upholstery |
|
|
22,654 |
13.7% |
|
27,481 |
13.7% |
|
|
95,670 |
|
15.7% |
|
106,580 |
15.6% |
|
All
Other |
|
|
2,910 |
1.8% |
|
2,891 |
1.4% |
|
|
12,534 |
|
2.1% |
|
10,386 |
1.5% |
|
Consolidated |
|
$ |
164,882 |
100.0% |
$ |
200,475 |
100% |
|
$ |
610,824 |
|
100.0% |
$ |
683,501 |
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income / (loss) |
|
|
|
|
|
|
|
|
|
|
|
Hooker Branded |
|
$ |
6,060 |
15.4% |
$ |
7,889 |
16.1% |
|
$ |
21,512 |
|
13.3% |
$ |
25,269 |
14.1% |
|
Home
Meridian |
|
|
1,845 |
1.8% |
|
8,660 |
7.1% |
|
|
(7,169 |
) |
-2.1% |
|
18,828 |
4.9% |
|
Domestic Upholstery |
|
|
807 |
3.6% |
|
2,336 |
8.5% |
|
|
6,637 |
|
6.9% |
|
7,607 |
7.1% |
|
All
Other |
|
|
328 |
11.3% |
|
282 |
9.8% |
|
|
1,727 |
|
13.8% |
|
971 |
9.4% |
|
Consolidated |
|
$ |
9,040 |
5.5% |
$ |
19,167 |
9.6% |
|
$ |
22,707 |
|
3.7% |
$ |
52,675 |
7.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior-Year amounts have been restated to reflect a change in the
Company’s reportable segments.
For more information, contact:Paul B.
Toms Jr.Chairman and Chief Executive
OfficerPhone: (276) 632-2133,
orPaul A. Huckfeldt, Senior Vice President,
Finance & Accounting & Chief Financial
OfficerPhone: (276) 666-3949
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