Hooker Furniture Corporation (NASDAQ-GS: HOFT) today reported
consolidated net sales of $149.7 million and net income of $10
million, or $0.84 per diluted share, for its fiscal 2021 third
quarter ended November 1, 2020.
Consolidated net sales decreased by 5.4%, or
$8.5 million, compared to the prior year period, while net income
increased 157.5%, or $6.2 million. Earnings per diluted share for
the quarter increased 154.5% from $0.33 a year ago.
“Our third quarter financial performance is
encouraging on many fronts, as the business rebound that began in
mid-May continues to gain momentum,” said Paul B. Toms Jr.,
chairman and chief executive officer. “Consolidated incoming orders
were up 33.8% during the quarter, and our consolidated backlog is
up 87.5%, both compared to a year ago. While we had a small
consolidated sales dip driven by ongoing disruptions in the supply
chain from the COVID-19 pandemic, two of our four segments achieved
sales increases compared to the prior year. Sequentially, we grew
weekly sales throughout the third quarter and reported a $19
million, or 15% consolidated revenue increase in the third quarter
compared to the second quarter,” Toms said.
“Although we are still navigating what we
believe will be short-term disruptions in the supply chain due to
the COVID-19 pandemic, we believe furniture will be an advantaged
sector of the economy, benefitting from a renewed consumer focus on
the home, a strong housing market and less discretionary spending
competition from travel, dining out and entertainment,” Toms said.
“We are adding employees at most locations in order to service the
robust demand for our products.”
“Supply chain bottlenecks in an environment of
surging demand are the greatest business challenge,” Toms said.
“Limitations on supply include scarcity of some raw materials and
components, limited availability of shipping containers and ocean
vessel space, production delays from some import suppliers and the
process of getting our domestic upholstery production ramped back
up after the factories were temporarily closed during the economic
shutdown earlier this year. In addition, we’ve had to work around
some COVID-related employee absences, all while keeping employee
safety a top priority.”
Regarding the pandemic-related challenges, Toms
said, “We are addressing and working through all the supply chain
disruptions and making slow, but steady progress. Our overseas
vendors are increasing capacity and production each month, and all
three of our domestic upholstery divisions were operating at
current full capacity at the end of the third quarter. We are in
the process of expanding capacity with additional personnel
hires.”
“We’re very encouraged by the current historic
levels of orders and backlog; however, due to the current supply
chain issues, orders are not converting to shipments as quickly as
could be expected in the pre-Pandemic environment and we expect
that to continue at least into the fiscal 2022 first quarter,” Toms
continued. “In a normal environment, we’d expect backlog to be one
helpful indicator of sales for the Hooker Branded and Domestic
Upholstery segments and All Other for the upcoming 30-day period
and for the upcoming 90-day period for Home Meridian. However, the
current logistics challenges are slowing order fulfillment,
particularly for Home Meridian whose average order sizes tend to be
larger and more episodic versus orders for the traditional Hooker
businesses, which tend to be smaller and more predictable.
Additionally, Home Meridian orders are programmed out and scheduled
for delivery to its larger accounts further into the future than
usual, which is also contributing to the increased backlog. We
expect these headwinds will continue to impact us and our sales in
Q4, with steady improvements beginning in mid-February 2021 after
the new year holidays in China and Vietnam,” he concluded.
Consolidated operating income increased by $8.0
million or 161.1% as compared to the prior year third quarter. The
Hooker Branded segment reported $7.7 million operating income and
maintained operating margin at a high level. The Home Meridian
segment reported $2.5 million operating income compared to a $4
million operating loss in the prior year third quarter. The
operating loss in the prior year period was due to excess
chargebacks with one major customer, excess inventory and carrying
costs due to customer returns and excess inventory, and inventory
write-downs – all of which either did not reoccur or reoccurred at
much lower or near normal levels. Additionally, tariff costs which
adversely affected prior year results have been mostly mitigated in
the current year through re-sourcing and selected re-pricing
efforts. The Domestic Upholstery segment reported $2.4 million in
operating income for the third quarter, representing solid
improvements compared to operating losses in the first and second
quarter of the current fiscal year at the height of the initial
COVID-19 crisis.
For the fiscal 2021 first nine months,
consolidated net sales were $384.8 million, a decrease of 13.7% or
$61.1 million compared to last year, and net loss was $19 million,
or -$1.61 per diluted share, compared to $0.85 earnings per diluted
share in last year’s first nine months.
The driver for the net loss for the 2021 first
nine months occurred in the first quarter at the depth of the COVID
economic contraction. Due to the material impact of COVID-19 on the
Company’s financial performance, market valuations and other
factors in the 2021 first quarter, the Company determined that an
intangibles asset valuation analysis was appropriate when reporting
2021 first quarter results. As a result, the first-nine months loss
was driven by a $44 million ($33.7 million after tax), non-cash
intangible asset impairment charge in Q1 to write down goodwill and
certain tradenames in the HMI segment, and goodwill in the
Shenandoah division of the Domestic Upholstery segment.
Segment Reporting: Hooker
Branded
Hooker Branded segment net sales increased by
$3.6 million or 8.2% in the fiscal 2021 third quarter compared to
the prior year period. “Both Hooker Casegoods and Hooker Upholstery
had steady sales growth, driven by increased overall demand from
most residential distribution channels, with incoming orders
surging 36% compared to the prior year,” said Jeremy Hoff,
president of Hooker Legacy Brands.
Order backlogs at the end of the quarter were up
159% versus quarter-end in the prior year period.
“The Hooker Branded Segment has been able to
begin to capitalize on exceptional demand due to our ability to
secure manufacturing capacity. Rationalizing our overall assortment
in order to prioritize our top collections has maximized our
ability to ship,” Hoff said. “Despite having disrupted April and
October High Point Markets due to Covid-19, we were able to precut,
ship and start selling four major new collections. Developing and
utilizing new digital marketing strategies enabled us to launch new
products successfully.”
Segment Reporting: Home
Meridian
Home Meridian segment net sales were $73.7
million, down $12 million or 14% compared to the prior year third
quarter, due primarily to lower sales in the Accentrics Home
(“ACH”) and Pulaski Furniture (“PFC”) divisions, which experienced
inventory availability challenges. Sales also declined in the
Samuel Lawrence Hospitality (“SLH”) division, as the hospitality
market has been adversely impacted by the pandemic. The decreases
were partially offset by increased sales with mass merchants and
Club customers.
“Our Q3 revenue decline was primarily the result
of on-going disruptions in our third-party factories and supply
chain,” said Lee Boone, president of Home Meridian.
“Disrupted supply of raw materials, components, labor and limited
availability of shipping containers have all negatively impacted
our ability to produce and ship products. Each of these areas
are sources of potential cost increases, which we are negotiating
with suppliers to minimize.”
“Incoming orders remained very strong in Q3,
exceeding prior year orders by 36%,” Boone said. “These orders were
primarily driven by conventional retailers placing large orders
programmed to ship well into next year. As a result of
significant customer order programming and factory shipping delays,
order backlogs were up 80% over prior year and 53% above the Q2
ending backlog. We are working closely with the factory
owners and logistics suppliers to increase production and shipping
capacity. We expect Q4 shipments to be significantly challenged by
these issues, with steady improvement beginning in the fiscal 2022
first quarter after the Chinese New Year holiday and the Tet New
Year holiday in Vietnam.”
“As expected, customer attendance at the
September High Point Premarket and October High Point Market was
atypical,” Boone added. “Pre-market attendance was up
five-fold, and October market attendance was off about 60%.
Taken together, traffic for the Fall market cycle was down about
40%. Fortunately, we were able to see most of our largest
customers, and we presented virtual markets to many of the
customers who did not visit our High Point showrooms in
person. As a result, our new product introductions pipeline
remains healthy, while focused on a smaller assortment of top
performers. We expect these well-received, fresh new looks to
arrive at retail in late Spring 2021.”
“We are making meaningful progress developing
new designs and marketing plans for the Spring launch of our Scott
Brothers licensed collection. Retail acceptance has been very
enthusiastic for the new “Scott Living” and “Drew and Jonathan
Home” brands. We expect our partnership with Scott Brothers to
drive incremental sales and profits across multiple HMI divisions
beginning in Q2 of next year.”
“Despite sales decreases, HMI gross profit and
operating profit improved significantly both in absolute terms and
as a percentage of net sales, as this segment experienced higher
than expected chargebacks with a major customer as well as excess
tariff and higher warehousing and distribution costs, all during
the prior year, which have now mostly been resolved,” Boone
said.
Segment Reporting: Domestic
Upholstery
Domestic Upholstery net sales increased by
$321,000 or 1.3% in the fiscal 2021 third quarter compared to the
prior year period. In response to reduced orders from the COVID-19
pandemic-related retail shutdown in March/April, Bradington-Young’s
and Shenandoah’s manufacturing plants were temporarily closed in
April, and Sam Moore operated at reduced capacity. Domestic
production facilities gradually resumed operations during the
second quarter, and by the end of the third quarter, all three
divisions were operating at current full capacity. Incoming orders
increased by over 30% compared to the prior year period and led to
an order backlog 100% higher than the prior year third quarter-end.
“We are very pleased that Domestic Upholstery achieved $2.4 million
in operating income, or a 9.6% operating margin for the quarter,”
said Hoff.
Segment Reporting: All
Other
All Other net sales decreased by 9.4% compared
to prior year third quarter due primarily to sales declines at H
Contract, which serves senior living centers that have been
severely impacted by the COVID-19 pandemic. All Other’s incoming
orders decreased by 28% in the third quarter.
Cash, Debt and Inventory
The net loss recorded for the nine-month period
was driven by impairment charges and had no impact on cash flow for
the year. Despite a sales decline in the nine-month period, the
Company generated $67.6 million in cash from operating activities,
distributed $5.7 million in cash dividends to shareholders, and
paid $4.8 million in principal and interest on its term loans. Cash
and cash equivalents stood at $93.9 million at fiscal 2021 third
quarter-end, an increase of $57.8 million compared to the balance
at fiscal 2020 year-end. Additionally, the Company had access to
$25.1 million in cash surrender value of Company-owned life
insurance policies. The Company had $25.7 million in
acquisition-related debt as of the end of the fiscal 2021 third
quarter which is due and payable on February 1, 2021. The Company
expects to re-pay the debt with cash on hand on or before the due
date. Consolidated inventories stood at $64.1 million, compared to
$92.8 million at the end of fiscal 2020 on February 2, 2020.
The Company is in the process of re-building
inventories to fulfill current and expected demand. “Product is
flowing from our overseas suppliers, and inventory-in-transit for
the Hooker Branded segment is approximately double the rate of a
year ago,” said Toms. “Almost immediately upon receipt, incoming
products are shipped out to fulfill orders, so we expect that it
will be late in the second quarter of fiscal 2022 before we
significantly reduce backlogs and actually begin building inventory
again,” he said.
Cash and cash equivalents are expected to
decline as more inventory is received in the coming months. Along
with an aggregate $25.7 million available under its existing
revolver to fund working capital, the Company is confident that its
strong financial condition can weather the expected short-term
impacts of COVID-19.
Outlook
“As we head into the fourth quarter, we are
encouraged by our significant backlog and robust demand from all
residential channels,” said Toms. “We’re making progress with our
supply chain challenges, as our overseas suppliers and own
factories ramp up production to allow us to service this additional
demand.
We are concerned about the recent surge in COVID
infections and hospitalizations but continue to maintain rigorous
safety protocols in all workplaces and are proud that we have had
essentially no workplace spread in any location thus far. Those
employees who can work remotely continue to do so. The safety and
health of our employees remains a top priority.
As we look forward to the next two to three
quarters, we are optimistic and believe we have the backlog, order
velocity and momentum to deliver strong results, despite the
on-going challenges of the COVID-19 pandemic and its impact on our
supply chain,” Toms said.
Dividends
On December 2, 2020, the Company’s board of
directors declared a quarterly cash dividend of $0.18 per share,
payable on December 31, 2020, to shareholders of record at December
16, 2020. This represents a 12.5% increase over the previous
quarterly dividend and the fifth consecutive annual dividend
increase.
Conference Call Details
Hooker Furniture will present its fiscal 2021
third quarter financial results via teleconference and live
internet web cast on Thursday morning, December 10, 2020 at 9:00 AM
Eastern Time. 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 9423979. 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 97th year
of business, is a designer, marketer and importer of casegoods
(wooden and metal furniture), leather-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 2019 shipments to U.S. retailers, according to a
2020 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, Samuel Lawrence Hospitality, a
designer and supplier of hotel furnishings and HMidea, a 2019
start-up that provides better-quality, ready-to-assemble furniture
to mass marketers and e-commerce customers. 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) 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, the
retail environment and our customer base; (2) 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; (3) 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’s 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; (4)
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; (5) 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; (6) 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; (7) 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; (8) difficulties in forecasting demand for our
imported products; (9) 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; (10) disruptions and damage
(including those 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; (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
specifically related to the concentrations of a material part of
our sales and accounts receivable in only a few 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)
achieving and managing growth and change, and the risks associated
with new business lines, acquisitions, restructurings, strategic
alliances and international operations; (16) the impairment of our
long-lived assets, which can result in reduced earnings and net
worth; (17) capital requirements and costs, including the servicing
of our floating-rate term loans; (18) risks associated with
distribution through third-party retailers, such as non-binding
dealership arrangements; (19) the cost and difficulty of marketing
and selling our products in foreign markets; (20) changes in
domestic and international monetary policies and fluctuations in
foreign currency exchange rates affecting the price of our imported
products and raw materials; (21) 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; (22) price competition in the furniture industry; (23)
competition from non-traditional outlets, such as internet and
catalog retailers; (24) 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 and (25) 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 OPERATIONS |
(In thousands, except per share data) |
(Unaudited) |
|
For the |
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
Nov 1, |
|
Nov 3, |
|
Nov 1, |
|
Nov 3, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net sales |
$ |
149,687 |
|
$ |
158,176 |
|
$ |
384,821 |
|
|
$ |
445,942 |
|
|
|
|
|
|
|
|
Cost of sales |
|
116,204 |
|
|
129,777 |
|
|
305,684 |
|
|
|
363,201 |
|
|
|
|
|
|
|
|
Gross profit |
|
33,483 |
|
|
28,399 |
|
|
79,137 |
|
|
|
82,741 |
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
|
19,850 |
|
|
22,810 |
|
|
57,920 |
|
|
|
67,286 |
Goodwill impairment
charges |
|
- |
|
|
- |
|
|
39,568 |
|
|
|
- |
Trade name impairment
charges |
|
- |
|
|
- |
|
|
4,750 |
|
|
|
- |
Intangible asset
amortization |
|
596 |
|
|
596 |
|
|
1,788 |
|
|
|
1,788 |
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
13,037 |
|
|
4,993 |
|
|
(24,889 |
) |
|
|
13,667 |
|
|
|
|
|
|
|
|
Other income, net |
|
158 |
|
|
309 |
|
|
107 |
|
|
|
215 |
Interest expense, net |
|
106 |
|
|
316 |
|
|
433 |
|
|
|
986 |
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
13,089 |
|
|
4,986 |
|
|
(25,215 |
) |
|
|
12,896 |
|
|
|
|
|
|
|
|
Income tax
expense/(benefit) |
|
2,996 |
|
|
1,066 |
|
|
(6,263 |
) |
|
|
2,829 |
|
|
|
|
|
|
|
|
Net income/(loss) |
$ |
10,093 |
|
$ |
3,920 |
|
$ |
(18,952 |
) |
|
$ |
10,067 |
|
|
|
|
|
|
|
|
Earnings/(Loss) per share |
|
|
|
|
|
|
|
Basic |
$ |
0.85 |
|
$ |
0.33 |
|
$ |
(1.61 |
) |
|
$ |
0.85 |
Diluted |
$ |
0.84 |
|
$ |
0.33 |
|
$ |
(1.61 |
) |
|
$ |
0.85 |
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
Basic |
|
11,833 |
|
|
11,789 |
|
|
11,818 |
|
|
|
11,782 |
Diluted |
|
11,939 |
|
|
11,816 |
|
|
11,818 |
|
|
|
11,821 |
|
|
|
|
|
|
|
|
Cash dividends declared per
share |
$ |
0.16 |
|
$ |
0.15 |
|
$ |
0.48 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Table II |
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) |
(In thousands) |
(Unaudited) |
|
For the |
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
Nov 1, |
|
Nov 3, |
|
Nov 1, |
|
Nov 3, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net income/(loss) |
$ |
10,093 |
|
|
$ |
3,920 |
|
|
$ |
(18,952 |
) |
|
$ |
10,067 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Gain on pension plan settlement |
|
- |
|
|
|
(520 |
) |
|
|
- |
|
|
|
(520 |
) |
Income tax effect on settlement |
|
- |
|
|
|
124 |
|
|
|
- |
|
|
|
124 |
|
Amortization of actuarial loss |
|
84 |
|
|
|
37 |
|
|
|
253 |
|
|
|
111 |
|
Income tax effect on amortization |
|
(20 |
) |
|
|
(9 |
) |
|
|
(60 |
) |
|
|
(27 |
) |
Adjustments to net periodic benefit cost |
|
64 |
|
|
|
(368 |
) |
|
|
193 |
|
|
|
(312 |
) |
|
|
|
|
|
|
|
|
Total Comprehensive
Income/(Loss) |
$ |
10,157 |
|
|
$ |
3,552 |
|
|
$ |
(18,759 |
) |
|
$ |
9,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table III |
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
|
|
|
As of |
November 1, |
|
February 2, |
|
|
2020 |
|
|
|
2020 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
93,874 |
|
|
$ |
36,031 |
|
Trade accounts receivable, net |
|
75,297 |
|
|
|
87,653 |
|
Inventories |
|
64,083 |
|
|
|
92,813 |
|
Income tax recoverable |
|
- |
|
|
|
751 |
|
Prepaid expenses and other current assets |
|
4,543 |
|
|
|
4,719 |
|
Total current assets |
|
237,797 |
|
|
|
221,967 |
|
Property, plant and equipment,
net |
|
27,315 |
|
|
|
29,907 |
|
Cash surrender value of life
insurance policies |
|
25,104 |
|
|
|
24,888 |
|
Deferred taxes |
|
14,152 |
|
|
|
2,880 |
|
Operating leases right-of-use
assets |
|
36,322 |
|
|
|
39,512 |
|
Intangible assets, net |
|
26,833 |
|
|
|
33,371 |
|
Goodwill |
|
490 |
|
|
|
40,058 |
|
Other assets |
|
1,244 |
|
|
|
1,125 |
|
Total non-current assets |
|
131,460 |
|
|
|
171,741 |
|
Total assets |
$ |
369,257 |
|
|
$ |
393,708 |
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Current portion of term loans |
$ |
25,741 |
|
|
$ |
5,834 |
|
Trade accounts payable |
|
28,452 |
|
|
|
25,493 |
|
Accrued salaries, wages and benefits |
|
4,491 |
|
|
|
4,933 |
|
Income tax payable |
|
2,015 |
|
|
|
- |
|
Customer deposits |
|
4,319 |
|
|
|
3,351 |
|
Current portion of lease liabilities |
|
6,772 |
|
|
|
6,307 |
|
Other accrued expenses |
|
3,045 |
|
|
|
4,211 |
|
Total current liabilities |
|
74,835 |
|
|
|
50,129 |
|
Long term debt |
|
- |
|
|
|
24,282 |
|
Deferred compensation |
|
11,162 |
|
|
|
11,382 |
|
Lease liabilities |
|
30,937 |
|
|
|
33,794 |
|
Other long-term
liabilities |
|
1,187 |
|
|
|
- |
|
Total long-term
liabilities |
|
43,286 |
|
|
|
69,458 |
|
Total liabilities |
|
118,121 |
|
|
|
119,587 |
|
|
|
|
|
Shareholders’ equity |
|
|
|
Common stock, no par value, 20,000 shares
authorized, 11,887 and 11,838 shares issued
and outstanding on each date |
|
53,055 |
|
|
|
51,582 |
|
Retained earnings |
|
198,601 |
|
|
|
223,252 |
|
Accumulated other comprehensive loss |
|
(520 |
) |
|
|
(713 |
) |
Total shareholders’ equity |
|
251,136 |
|
|
|
274,121 |
|
Total liabilities and shareholders’ equity |
$ |
369,257 |
|
|
$ |
393,708 |
|
|
|
|
|
|
|
|
|
Table IV |
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
For the |
|
Thirty-Nine Weeks Ended |
|
Nov 1, |
|
Nov 3, |
|
|
2020 |
|
|
|
2019 |
|
Operating
Activities: |
|
|
|
Net (loss)/income |
$ |
(18,952 |
) |
|
$ |
10,067 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Goodwill and intangible asset impairment charges |
|
44,318 |
|
|
|
- |
|
Depreciation and amortization |
|
5,052 |
|
|
|
5,260 |
|
Gain on pension settlement |
|
- |
|
|
|
(520 |
) |
Gain on disposal of assets |
|
- |
|
|
|
(271 |
) |
Deferred income tax (benefit) / expense |
|
(10,143 |
) |
|
|
1,461 |
|
Noncash restricted stock and performance awards |
|
1,473 |
|
|
|
891 |
|
Provision for doubtful accounts and sales allowances |
|
4,527 |
|
|
|
1,365 |
|
Gain on life insurance policies |
|
(1,750 |
) |
|
|
(715 |
) |
Changes in assets and liabilities: |
|
|
|
Trade accounts receivable |
|
7,829 |
|
|
|
18,589 |
|
Inventories |
|
28,730 |
|
|
|
1,589 |
|
Income tax recoverable |
|
751 |
|
|
|
(2,348 |
) |
Prepaid expenses and other current assets |
|
620 |
|
|
|
(638 |
) |
Trade accounts payable |
|
2,947 |
|
|
|
(13,456 |
) |
Accrued salaries, wages, and benefits |
|
(441 |
) |
|
|
(2,553 |
) |
Accrued income taxes |
|
2,015 |
|
|
|
(3,159 |
) |
Customer deposits |
|
967 |
|
|
|
10,006 |
|
Operating lease liabilities |
|
797 |
|
|
|
536 |
|
Other accrued expenses |
|
(1,165 |
) |
|
|
350 |
|
Deferred compensation |
|
32 |
|
|
|
156 |
|
Net cash provided by operating activities |
$ |
67,607 |
|
|
$ |
26,610 |
|
|
|
|
|
Investing
Activities: |
|
|
|
Purchases of property and equipment |
|
(642 |
) |
|
|
(4,745 |
) |
Proceeds received on notes from sale of assets |
|
- |
|
|
|
1,465 |
|
Premiums paid on life insurance policies |
|
(519 |
) |
|
|
(558 |
) |
Proceeds received on life insurance policies |
|
1,489 |
|
|
|
- |
|
Net cash provided by/(used in) investing activities |
|
328 |
|
|
|
(3,838 |
) |
|
|
|
|
Financing
Activities: |
|
|
|
Payments for long-term debt |
|
(4,393 |
) |
|
|
(4,393 |
) |
Cash dividends paid |
|
(5,699 |
) |
|
|
(5,316 |
) |
Cash used in financing activities |
|
(10,092 |
) |
|
|
(9,709 |
) |
|
|
|
|
Net increase in cash and cash
equivalents |
|
57,843 |
|
|
|
13,063 |
|
Cash and cash equivalents -
beginning of year |
|
36,031 |
|
|
|
11,435 |
|
Cash and cash equivalents -
end of quarter |
$ |
93,874 |
|
|
$ |
24,498 |
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
Cash paid for income
taxes |
$ |
2,301 |
|
|
$ |
6,754 |
|
Cash paid for interest,
net |
|
365 |
|
|
|
852 |
|
|
|
|
|
Non-cash transactions: |
|
|
|
Increase in lease liabilities
arising from obtaining right-of-use assets |
$ |
2,103 |
|
|
$ |
272 |
|
Increase in property and
equipment through accrued purchases |
|
12 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
Table V |
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES |
NET SALES AND OPERATING INCOME/(LOSS) BY SEGMENT |
(In thousands) |
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
November 1, 2020 |
|
November 3, 2019 |
|
|
November 1, 2020 |
|
November 3, 2019 |
|
|
|
% Net |
|
% Net |
|
|
% Net |
|
% Net |
Net
Sales |
|
Sales |
|
Sales |
|
|
Sales |
|
Sales |
Hooker Branded |
$ |
47,287 |
31.6 |
% |
$ |
43,703 |
|
27.6 |
% |
|
$ |
113,268 |
|
29.4 |
% |
$ |
122,707 |
|
27.5 |
% |
Home Meridian |
|
73,727 |
49.3 |
% |
|
85,776 |
|
54.2 |
% |
|
|
202,560 |
|
52.6 |
% |
|
240,594 |
|
54.0 |
% |
Domestic Upholstery |
|
25,350 |
16.9 |
% |
|
25,029 |
|
15.9 |
% |
|
|
59,640 |
|
15.6 |
% |
|
73,016 |
|
16.3 |
% |
All Other |
|
3,323 |
2.2 |
% |
|
3,668 |
|
2.3 |
% |
|
|
9,353 |
|
2.4 |
% |
|
9,625 |
|
2.2 |
% |
Consolidated |
$ |
149,687 |
100 |
% |
$ |
158,176 |
|
100 |
% |
|
$ |
384,821 |
|
100 |
% |
$ |
445,942 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
income/(loss) |
|
|
|
|
|
|
|
|
|
Hooker Branded |
$ |
7,686 |
16.3 |
% |
$ |
6,188 |
|
14.2 |
% |
|
$ |
15,108 |
|
13.3 |
% |
$ |
15,453 |
|
12.6 |
% |
Home Meridian |
|
2,510 |
3.4 |
% |
|
(3,955 |
) |
-4.6 |
% |
|
|
(26,754 |
) |
-13.2 |
% |
|
(9,013 |
) |
-3.7 |
% |
Domestic Upholstery |
|
2,421 |
9.6 |
% |
|
2,278 |
|
9.1 |
% |
|
|
(14,399 |
) |
-24.1 |
% |
|
5,830 |
|
8.0 |
% |
All Other |
|
420 |
12.6 |
% |
|
482 |
|
13.2 |
% |
|
|
1,156 |
|
12.4 |
% |
|
1,397 |
|
14.5 |
% |
Consolidated |
$ |
13,037 |
8.7 |
% |
$ |
4,993 |
|
3.2 |
% |
|
$ |
(24,889 |
) |
-6.5 |
% |
$ |
13,667 |
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Officer Phone: (276) 632-2133,
or Paul A. Huckfeldt, Senior Vice President,
Finance & Accounting & Chief Financial Officer
Phone: (276) 666-3949
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