Hooker Reports Reduced Sales, Earnings for 2008 First Quarter

June 5, 2007  by in UnCategorized   

By Home Furnishings Business in on June 2007 Hooker Furniture Corp., Martinsville, Va., reported on Wednesday sales of $77.3 million for its 2007 fiscal first quarter, ended April 29; and net income of $4.3 million, or $0.33 per share. Those are decreases of 14.8 percent in sales and 26.5 percent in net income compared to second-quarter 2006, which ended May 31, 2006.

Due to a change in Hooker Furniture’s fiscal year, the company’s 2008 fiscal year began January 29, 2007, and will end February 3, 2008. The company is comparing operating results for the 13-week first quarter of fiscal year 2008 with the 2006 three-month second quarter that ended May 31, 2006 (the “2006 quarter”).

Based on actual shipping days in each period, average daily net sales declined 13.4 percent to $1.2 million per day during the 64 operating days in the 2008 first quarter, compared to $1.4 million per day during the 65 operating days in the 2006 quarter.

Contributing to the decrease in earnings per share was a net increase of 1.2 million shares primarily resulting from the termination of the Company’s Employee Stock Ownership Plan in January 2007, partially offset by stock repurchased since February 2007.

“We knew that the top line would be our biggest challenge this quarter because of continuing weakness at retail,” said Paul B. Toms Jr., chairman, chief executive officer and president. “Even though the sales slump is industrywide, our double-digit decrease in revenues is greater than anticipated and disappointing. While we are on track with many of our operational improvements and cost-cutting goals, the resulting savings were not apparent due to lower than expected sales volume.”

Toms added that Hooker continues to make progress in “positioning the company to be more profitable even in a flat sales environment. Our cost structure improvements are underway and should be more evident in the second half of the year.”

Looking ahead, Toms expected retail conditions to remain sluggish at least through the summer.

“We’re in the challenging position of needing to replace revenues lost from domestically produced wood furniture sales from last year, due to the closing of our domestic wood furniture plants, in a very difficult retail environment,” he said. “However, upholstery sales from Sam Moore will begin to replace sales levels lost by our exit from domestic wood manufacturing. We expect that profitability for fiscal 2008 should improve even in the face of weak business due to the cost-cutting measures the company has implemented and the continued progress in managing our supply chain, warehousing and distribution operations. In addition, a number of expenses that occurred in the second half of the previous year have been eliminated and are not expected to recur in 2008, including restructuring costs, early retirement costs and non-cash ESOP cost.”

Hooker Furniture presented its results for its fiscal 2008 first quarter via teleconference and live Internet Web cast this morning. 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.