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 second quarter and first half ended July 30, 2023.
Fiscal 2024 Second Quarter
overview:
- Consolidated net sales for the
fiscal 2024 second quarter were $97.8 million, a decrease of $55.1
million, or 36% compared to the prior year second quarter, driven
by industry-wide decreased demand for home furnishings, and the
planned exits of unprofitable operations within the Home
Meridian segment.
- Consolidated
operating income for the quarter was $1.3 million or 1.3% of net
sales, compared to $7.3 million, or 4.8% of net sales in the prior
year period. Consolidated net income was $785,000 or $0.07 per
diluted share for the quarter, compared to $5.5 million or $0.46
per diluted share in the prior year period.
- During the
quarter, the Company strengthened its financial position,
generating over $51 million in cash from operations and ending the
quarter with cash and cash equivalents of $50 million.
Additionally, it reduced inventory levels by $70 million from a
year ago and completed most of its targeted liquidation sales of
the Home Meridian segment’s discontinued inventories.
- During the
quarter, Hooker Furnishings acquired BOBO Intriguing Objects, an
Atlanta-based lighting, décor and accents designer and importer
offering one-of-a-kind designs based on vintage pieces found around
the world. The acquisition enables the company to broaden its
product diversity into new furnishings categories of lighting, wall
art, textiles, and décor.
- For the fiscal 2024 six-month
period, consolidated net sales were $219.6 million, a decrease of
$80.6 million or 26.8%, as compared to a year ago, also driven by
industry-wide decreased demand for home furnishings, and the
planned exits of unprofitable operations within the Home Meridian
segment. Consolidated operating income was $3.2 million or 1.5% of
net sales as compared to $11.2 million or 3.7% of net sales in the
prior-year first half. Consolidated net income was $2.2 million or
$0.20 per diluted share, as compared to $8.7 million or $0.73 per
diluted share in the prior-year first half.
Management Commentary
“Despite a tough business climate and our team’s
focus on navigating the last phases of liquidating excess
inventories related to higher risk, unprofitable operations that
were exited in the Home Meridian segment, we continue to strengthen
our balance sheet and reduce overhead and costs while focusing on
executing our strategic growth initiatives,” said Jeremy Hoff,
chief executive officer and director.
“We believe the softer demand seen currently
industry-wide is driven by retailers continuing to sell through
over-inventoried positions and a short-term glut of heavily
discounted home furnishings in the market,” Hoff said. “In
addition, the year-over-year comparisons reflect our exit from
higher-risk, unprofitable operations at Home Meridian. We are
encouraged that incoming orders have trended higher each month
through the summer compared to the prior year, and consolidated
orders are up by double-digits versus a year ago.”
“In this environment, we’ve prioritized
strengthening our financial position and strategically deploying
capital and other resources, while investing in new showrooms and
systems that position us to immediately leverage increasing demand
when it occurs. For example, the collective impact of our new
showrooms in High Point, Atlanta and Las Vegas have increased our
customer contacts from about 3,000 to around 14,000 annually, more
than quadrupling the number of existing and potential customers,”
Hoff said. “While we expect the full benefit of this investment
will have a mostly longer-term impact, we have already opened a
thousand new accounts in the first half as visibility and
engagement have increased,” he continued.
“The transformation of the Home Meridian segment
to a sustainably profitable business model is well underway,” Hoff
continued. “Most of the excess inventories connected to the exit of
ACH at the end of the last fiscal year have been sold and the
related cost reduction efforts are paying off. We recorded a small
operating income in fiscal July in this segment and while we
continue to expect some short-term volatility in sales and
earnings, we expect HMI to achieve sustainable profitability in the
second half of the fiscal year.”
“We are pleased to have completed the
acquisition of Atlanta-based BOBO Intriguing Objects this quarter,
which enables us to broaden our product diversity to include
lighting, décor, textiles, and wall art. Adding BOBO to our brand
portfolio positions us as an even more valuable and comprehensive
partner for our customer base. Like last year’s Sunset West
acquisition, we intend to scale BOBO using our existing sales,
marketing, and operations teams,” Hoff continued.
Segment Reporting: Hooker
Branded
- Hooker Branded
net sales decreased by $18.1 million, or 34.3% in the fiscal 2024
second quarter due to decreased shipments and unit volume.
Furthermore, discounting was 240 basis points higher than the prior
year quarter. For the fiscal 2024 first half, Hooker Branded net
sales decreased by $18.5 million, or 19.4% compared to the
prior-year six-month period. Sales decreases in both periods
underscore the aforementioned softer demand for home
furnishings.
- Despite a
decrease in net sales, gross margin increased due primarily to
favorable product costs from lower freight rates, and to a lesser
extent, decreased warehousing costs. The segment reported operating
income of $3.2 million and an operating margin of 9.3%, compared to
$6.1 million and 11.5% in the prior-year second quarter.
- While order
backlog was lower than the prior-year quarter end, it remained
about 40% higher than pre-pandemic levels at the end of the fiscal
2020 second quarter. Incoming orders increased by 18.6% as compared
to the prior-year quarter. A significant portion of Hooker
Branded’s backlog consists of orders received late last year and
earlier this year, which are expected to ship in the second half of
this year and position the segment positively for the upcoming
quarters.
Segment Reporting: Home Meridian
(HMI)
- Home Meridian
net sales decreased by $30.1 million, or 51% in the fiscal 2024
second quarter due to reduced home furnishings demand and the
absence of sales from exited higher-risk, unprofitable operations.
Sales decreases in the major furniture chains and e-commerce
channel accounted for approximately 70% and 15% of the total
decrease in this segment, respectively.
- Gross profit
and margin both decreased in the fiscal 2024 second quarter,
resulting from the net sales decline and under-absorbed fixed
costs. Product costs decreased as a percentage of net sales due to
lower freight costs, but fixed costs such as warehousing rent and
labor expenses adversely impacted the gross margin due to
significantly lower net sales.
- “We reduced our
Georgia warehouse footprint by 200,000 square feet during the
quarter and expect to further reduce it by another 100,000 to
200,000 square feet in early calendar 2024. Right sizing our
footprint to align with our current demand resulting from no longer
stocking significant volumes of inventory for ACH will not
only reduce costs, but will improve liquidity and working capital
levels,” said Paul Huckfeldt, senior vice president and chief
financial officer.
- Due to the
significant sales decline and resulting under-absorbed fixed costs,
Home Meridian reported a $3.3 million operating loss for the
quarter. For the fiscal 2024 six-month period, Home Meridian net
sales decreased due to the same factors above, including a sales
decrease with mass merchants, resulting in a $5.5 million operating
loss, which was in line with management’s expectations.
- Quarter-end
backlog was significantly lower than the previous year's quarter
and the fiscal 2020 second quarter. This decline is attributed to
the absence of orders from exited operations, as well as a
reduction of incoming orders from our retail customers, who are
still carrying excess inventories ordered during the previous
year.
Segment Reporting: Domestic
Upholstery
- Domestic
Upholstery net sales decreased by $7.4 million, or 19.4% in the
fiscal 2024 second quarter due to sales decreases at Shenandoah and
HF Custom (formerly Sam Moore), partially offset by a 10% increase
at Sunset West. Bradington-Young net sales were the same as in the
prior year second quarter.
- Despite the
sales decrease, gross margin was 200 basis points higher than the
prior-year quarter due to decreased direct costs, including more
stable raw material costs and lower direct labor costs due to
reduced production at HF Custom and Shenandoah, partially offset by
under-absorbed indirect costs.
- For the fiscal
2024 first half, net sales decreased at HF Custom, Shenandoah, and
Sunset West. Bradington-Young reported a small sales increase for
the six-month period.
- Incoming orders
increased by 36.7% compared to prior-year quarter; however, orders
in the prior-year period were relatively low due to higher backlog
and longer lead times. Quarter-end backlog for Bradington-Young
remained three times that of pre-pandemic levels at fiscal 2020
second quarter end, while the backlogs for HF Custom and Shenandoah
decreased to levels similar to fiscal 2020.
Cash, Debt, and Inventory
- Cash and
cash equivalents stood at $50 million at fiscal 2024 second
quarter-end, an increase of $31 million from the prior year-end.
Inventory levels decreased by $35 million from the year-end and $70
million from this time a year ago. During the six-month period, $51
million of cash generated from operating activities funded $8.7
million share repurchases, $4.9 million in cash dividends to
shareholders, $4.0 million capital expenditures including
investments in the new showrooms, $2.6 million for development of
our cloud-based ERP system, and $2.4 million for BOBO
acquisition.
- Since the
share repurchase program began in the second quarter of last year,
as of quarter end, a total of approximately $22 million has been
spent to purchase and retire about 1.3 million shares of common
stock.
- In
addition to the cash balance, an aggregate of $27.2 million was
available under our existing revolver at quarter-end.
Capital Allocation
“During the first half of the year, we’ve made
considerable progress in strengthening our balance sheet. The
quality of our inventories is much better than it was at the end of
last year and is aligned with expected demand and we have generated
considerable cash this year,” said Huckfeldt. “For the remainder of
the year, we plan to continue to strengthen the balance sheet,
continue our share repurchase program, as appropriate, and invest
in our organic growth initiatives, which we believe will position
us favorably as business improves,” he continued.
Dividends
On September 5, 2023, our board of directors
declared a quarterly cash dividend of $0.22 per share which will be
paid on September 29, 2023 to shareholders of record at September
18, 2023.
Outlook
“We believe there are conflicting signals in the
economy,” said Hoff. “A housing shortage and the over 20-year high
on fixed mortgage rates has slowed down housing activity. The
continued rise in interest rates has suppressed consumer
confidence. However, overall retail spending and activity in the
manufacturing sector and new business start-ups is healthy, while
the unemployment rate remains near a 30-year low.”
“As we anticipated, the first half of the year
was difficult as the industry worked through bloated inventories
and consumers’ spending habits changed. We expect demand and
business to pick up in the second half for several reasons. First,
consolidated orders are up in mid-double-digits over this time a
year ago, with orders trending up in each segment for the past few
months. Secondly, a significant portion of Hooker Branded’s backlog
consists of orders for new products launched at the High Point
market, and are expected to ship in the second half of this year.
Thirdly, in the second half, Home Meridian expects to ship to over
a thousand retail floors in what we believe to be the largest
number of new product placements in its history. We believe all the
right pieces are in place for Home Meridian to achieve
sustainable profitability in the second half of the year,” he
continued.
“While we’re focused on reducing overhead costs,
keeping our balance sheet strong and judiciously deploying capital,
we have continued to invest significantly in initiatives that
promote higher visibility amongst potential customers and future
growth and believe these things will put us in the strongest
possible position when demand improves,” Hoff concluded.
Conference Call Details
Hooker Furnishings will present its fiscal 2024
second quarter financial results via teleconference and live
internet webcast on Friday morning, September 8th, 2023 at 9:00 AM
Eastern Time. A live webcast of the call will be available on the
Investor Relations page of the Company’s website at
https://investors.hookerfurnishings.com/events and archived for
replay. To access the call by phone, participants should go to this
link (registration link) and you will be provided with dial in
details. To avoid delays, participants are encouraged to dial into
the conference call fifteen minutes ahead of the scheduled start
time.
Hooker Furnishings Corporation, in its 99th year
of business, is a designer, marketer and importer of casegoods
(wooden and metal furniture), leather furniture, 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, 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 |
|
Twenty-Six
Weeks Ended |
|
|
July
30, |
|
July 31, |
|
July
30, |
|
July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
97,806 |
|
$ |
152,908 |
|
|
$ |
219,621 |
|
$ |
300,223 |
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
74,465 |
|
|
121,853 |
|
|
|
168,374 |
|
|
239,709 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
23,341 |
|
|
31,055 |
|
|
|
51,247 |
|
|
60,514 |
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses |
|
|
21,144 |
|
|
22,886 |
|
|
|
46,191 |
|
|
47,543 |
Intangible
asset amortization |
|
|
924 |
|
|
878 |
|
|
|
1,807 |
|
|
1,756 |
|
|
|
|
|
|
|
|
|
Operating income |
|
|
1,273 |
|
|
7,291 |
|
|
|
3,249 |
|
|
11,215 |
|
|
|
|
|
|
|
|
|
Other
income/(expense), net |
|
|
357 |
|
|
(44 |
) |
|
|
411 |
|
|
234 |
Interest
expense, net |
|
|
654 |
|
|
83 |
|
|
|
833 |
|
|
111 |
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
|
976 |
|
|
7,164 |
|
|
|
2,827 |
|
|
11,338 |
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
191 |
|
|
1,621 |
|
|
|
593 |
|
|
2,612 |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
785 |
|
$ |
5,543 |
|
|
$ |
2,234 |
|
$ |
8,726 |
|
|
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
$ |
0.47 |
|
|
$ |
0.20 |
|
$ |
0.74 |
Diluted |
|
$ |
0.07 |
|
$ |
0.46 |
|
|
$ |
0.20 |
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,732 |
|
|
11,876 |
|
|
|
10,854 |
|
|
11,871 |
Diluted |
|
|
10,828 |
|
|
11,935 |
|
|
|
10,962 |
|
|
11,960 |
|
|
|
|
|
|
|
|
|
Cash
dividends declared per share |
|
$ |
0.22 |
|
$ |
0.20 |
|
|
$ |
0.44 |
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
Table
II |
|
HOOKER
FURNISHINGS CORPORATION AND SUBSIDIARIES |
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the |
|
|
|
Thirteen
Weeks Ended |
|
Twenty-Six
Weeks Ended |
|
|
|
July
30, |
|
July 31, |
|
July
30, |
|
July 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
785 |
|
|
$ |
5,543 |
|
|
$ |
2,234 |
|
|
$ |
8,726 |
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
Amortization of actuarial (gain)/loss |
|
|
(70 |
) |
|
|
60 |
|
|
|
(140 |
) |
|
|
42 |
|
|
Income tax effect on amortization |
|
|
17 |
|
|
|
(14 |
) |
|
|
34 |
|
|
|
(10 |
) |
|
Adjustments to net periodic benefit cost |
|
|
(53 |
) |
|
|
46 |
|
|
|
(106 |
) |
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income |
|
$ |
732 |
|
|
$ |
5,589 |
|
|
$ |
2,128 |
|
|
$ |
8,758 |
|
|
|
|
|
|
|
|
|
|
|
|
Table
III |
|
HOOKER
FURNISHINGS CORPORATION AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE
SHEETS |
|
(In thousands) |
|
As
of |
|
July
30, |
|
January 29, |
|
|
|
2023 |
|
2023 |
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
49,979 |
|
$ |
19,002 |
|
Trade accounts receivable, net |
|
|
39,441 |
|
|
62,129 |
|
Inventories |
|
|
63,358 |
|
|
96,675 |
|
Income tax recoverable |
|
|
3,025 |
|
|
3,079 |
|
Prepaid expenses and other current assets |
|
|
7,370 |
|
|
6,418 |
|
Total current assets |
|
|
163,173 |
|
|
187,303 |
|
Property,
plant and equipment, net |
|
|
28,433 |
|
|
27,010 |
|
Cash
surrender value of life insurance policies |
|
|
28,050 |
|
|
27,576 |
|
Deferred
taxes |
|
|
14,037 |
|
|
14,484 |
|
Operating
leases right-of-use assets |
|
|
58,589 |
|
|
68,949 |
|
Intangible
assets, net |
|
|
30,471 |
|
|
31,779 |
|
Goodwill |
|
|
15,076 |
|
|
14,952 |
|
Other
assets |
|
|
12,286 |
|
|
9,663 |
|
Total non-current assets |
|
|
186,942 |
|
|
194,413 |
|
Total assets |
|
$ |
350,115 |
|
$ |
381,716 |
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Current portion of long-term debt |
|
$ |
1,393 |
|
$ |
1,393 |
|
Trade accounts payable |
|
|
14,068 |
|
|
16,090 |
|
Accrued salaries, wages and benefits |
|
|
6,447 |
|
|
9,290 |
|
Customer deposits |
|
|
8,269 |
|
|
8,511 |
|
Current portion of lease liabilities |
|
|
6,926 |
|
|
7,316 |
|
Other accrued expenses |
|
|
2,264 |
|
|
7,438 |
|
Total current liabilities |
|
|
39,367 |
|
|
50,038 |
|
Long term
debt |
|
|
22,177 |
|
|
22,874 |
|
Deferred
compensation |
|
|
7,880 |
|
|
8,178 |
|
Operating
lease liabilities |
|
|
54,157 |
|
|
63,762 |
|
Other
long-term liabilities |
|
|
866 |
|
|
843 |
|
Total
long-term liabilities |
|
|
85,080 |
|
|
95,657 |
|
Total liabilities |
|
|
124,447 |
|
|
145,695 |
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
Common stock, no par value,20,000shares
authorized, |
|
|
|
|
|
10,819 and 11,197 shares issued and
outstanding on each date |
|
49,561 |
|
|
50,770 |
|
Retained earnings |
|
|
175,348 |
|
|
184,386 |
|
Accumulated other comprehensive income |
|
|
759 |
|
|
865 |
|
Total shareholders' equity |
|
|
225,668 |
|
|
236,021 |
|
Total liabilities and shareholders' equity |
|
$ |
350,115 |
|
$ |
381,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
IV |
|
|
HOOKER
FURNISHINGS CORPORATION AND SUBSIDIARIES |
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
(In thousands) |
|
|
(Unaudited) |
|
|
|
|
For
the |
|
|
|
Twenty-Six
Weeks Ended |
|
|
|
July
30, |
|
July 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Operating Activities: |
|
|
|
|
|
Net
income |
|
$ |
2,234 |
|
|
$ |
8,726 |
|
|
Adjustments
to reconcile net income to net cash |
|
|
|
|
|
provided
by/(used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
4,372 |
|
|
|
4,409 |
|
|
Deferred income tax expense |
|
|
481 |
|
|
|
1,839 |
|
|
Noncash restricted stock and performance awards |
|
|
1,043 |
|
|
|
873 |
|
|
Provision for doubtful accounts and sales allowances |
|
|
(475 |
) |
|
|
(1,532 |
) |
|
Gain on life insurance policies |
|
|
(684 |
) |
|
|
(587 |
) |
|
Loss on sales of assets |
|
|
30 |
|
|
|
- |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
Trade accounts receivable |
|
|
23,163 |
|
|
|
(4,843 |
) |
|
Inventories |
|
|
35,062 |
|
|
|
(53,489 |
) |
|
Income tax recoverable |
|
|
53 |
|
|
|
787 |
|
|
Prepaid expenses and other assets |
|
|
(3,528 |
) |
|
|
(6,175 |
) |
|
Trade accounts payable |
|
|
(2,029 |
) |
|
|
4,691 |
|
|
Accrued salaries, wages, and benefits |
|
|
(2,843 |
) |
|
|
(1,480 |
) |
|
Customer deposits |
|
|
(241 |
) |
|
|
27 |
|
|
Operating lease assets and liabilities |
|
|
366 |
|
|
|
(151 |
) |
|
Other accrued expenses |
|
|
(5,154 |
) |
|
|
(1,293 |
) |
|
Deferred compensation |
|
|
(438 |
) |
|
|
(283 |
) |
|
Net cash provided by/(used in) operating activities |
|
$ |
51,412 |
|
|
$ |
(48,481 |
) |
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
Acquisitions |
|
|
(2,373 |
) |
|
|
(25,912 |
) |
|
Purchases of property and equipment |
|
|
(3,965 |
) |
|
|
(1,947 |
) |
|
Premiums paid on life insurance policies |
|
|
(317 |
) |
|
|
(404 |
) |
|
Proceeds of life insurance policies |
|
|
444 |
|
|
|
- |
|
|
Net cash used in investing activities |
|
|
(6,211 |
) |
|
|
(28,263 |
) |
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
Purchase and retirement of common stock |
|
|
(8,668 |
) |
|
|
(1,137 |
) |
|
Cash dividends paid |
|
|
(4,856 |
) |
|
|
(4,794 |
) |
|
Payments for long-term loans |
|
|
(700 |
) |
|
|
- |
|
|
Proceeds from long-term loans |
|
|
- |
|
|
|
25,000 |
|
|
Proceeds from revolving credit facility |
|
|
- |
|
|
|
30,301 |
|
|
Payments for revolving credit facility |
|
|
- |
|
|
|
(30,301 |
) |
|
Debt issuance cost |
|
|
- |
|
|
|
(38 |
) |
|
Net cash (used in)/provided by financing activities |
|
|
(14,224 |
) |
|
|
19,031 |
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
|
|
30,977 |
|
|
|
(57,713 |
) |
|
Cash and
cash equivalents - beginning of year |
|
|
19,002 |
|
|
|
69,366 |
|
|
Cash and
cash equivalents - end of quarter |
|
$ |
49,979 |
|
|
$ |
11,653 |
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
|
Cash
paid/(refund) for income taxes |
|
$ |
60 |
|
|
$ |
(14 |
) |
|
Cash paid
for interest, net |
|
|
914 |
|
|
|
55 |
|
|
|
|
|
|
|
|
Non-cash
transactions: |
|
|
|
|
|
(Decrease)/Increase in lease liabilities arising from changes in
right-of-use assets |
|
$ |
(6,356 |
) |
|
$ |
7,680 |
|
|
Increase in
property and equipment through accrued purchases |
|
|
8 |
|
|
|
207 |
|
|
|
|
|
|
|
|
|
Table
V |
|
|
|
HOOKER
FURNISHINGS CORPORATION AND SUBSIDIARIES |
|
|
|
NET SALES AND
OPERATING INCOME/(LOSS) BY SEGMENT |
|
|
|
(In thousands) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks Ended |
|
Twenty-Six
Weeks Ended |
|
|
|
July 30, 2023 |
|
July 31, 2023 |
|
|
July 30, 2023 |
|
July 31, 2023 |
|
|
|
|
|
%
Net |
|
% Net |
|
|
%
Net |
|
% Net |
|
Net
sales |
|
|
Sales |
|
Sales |
|
|
Sales |
|
Sales |
|
Hooker Branded |
|
$ |
34,685 |
|
35.4 |
% |
$ |
52,817 |
|
34.5 |
% |
|
$ |
76,576 |
|
34.9 |
% |
$ |
95,047 |
|
31.7 |
% |
|
Home Meridian |
|
|
28,911 |
|
29.6 |
% |
|
59,048 |
|
38.6 |
% |
|
|
70,832 |
|
32.3 |
% |
|
121,133 |
|
40.3 |
% |
|
Domestic Upholstery |
|
|
30,892 |
|
31.6 |
% |
|
38,326 |
|
25.1 |
% |
|
|
65,996 |
|
30.0 |
% |
|
79,546 |
|
26.5 |
% |
|
All Other |
|
|
3,318 |
|
3.4 |
% |
|
2,717 |
|
1.8 |
% |
|
|
6,217 |
|
2.8 |
% |
|
4,497 |
|
1.5 |
% |
|
Consolidated |
|
$ |
97,806 |
|
100 |
% |
$ |
152,908 |
|
100 |
% |
|
$ |
219,621 |
|
100 |
% |
$ |
300,223 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
|
|
|
|
|
|
|
|
|
Hooker Branded |
|
$ |
3,223 |
|
9.3 |
% |
$ |
6,072 |
|
11.5 |
% |
|
$ |
5,524 |
|
7.2 |
% |
$ |
10,214 |
|
10.7 |
% |
|
Home Meridian |
|
|
(3,336 |
) |
-11.5 |
% |
|
(991 |
) |
-1.7 |
% |
|
|
(5,454 |
) |
-7.7 |
% |
|
(4,085 |
) |
-3.4 |
% |
|
Domestic Upholstery |
|
|
724 |
|
2.3 |
% |
|
1,713 |
|
4.5 |
% |
|
|
2,051 |
|
3.1 |
% |
|
4,465 |
|
5.6 |
% |
|
All Other |
|
|
662 |
|
20.0 |
% |
|
497 |
|
18.3 |
% |
|
|
1,128 |
|
18.1 |
% |
|
621 |
|
13.8 |
% |
|
Consolidated |
|
$ |
1,273 |
|
1.3 |
% |
$ |
7,291 |
|
4.8 |
% |
|
$ |
3,249 |
|
1.5 |
% |
$ |
11,215 |
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, contact: Paul A. Huckfeldt, Senior Vice
President & Chief Financial Officer, Phone: (276) 666-3949
Hooker Furnishings (NASDAQ:HOFT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hooker Furnishings (NASDAQ:HOFT)
Historical Stock Chart
From Apr 2023 to Apr 2024