Hooker Furnishings Studies Gross sales & Earnings for 2022 Fiscal

MARTINSVILLE, Va., April 13, 2022 (GLOBE NEWSWIRE) — Hooker Furnishings Company (NASDAQ-GS: HOFT) right this moment reported consolidated internet gross sales of $593.6 million for its 2022 fiscal yr ended January 30, 2022, a $53.5 million, or 9.9%, improve in comparison with a yr in the past.

The income achieve was pushed by gross sales will increase of over 20% in each the Hooker Branded and Home Upholstery segments in comparison with the prior yr, partially offset by a 1.2% gross sales lower within the Dwelling Meridian phase (“HMI”).

Consolidated internet earnings for the fiscal yr was $11.7 million, or $0.97 per diluted share, as in comparison with a internet lack of $10.4 million or ($0.88) per diluted share within the prior yr interval. Consolidated working earnings for the present yr was $14.8 million in comparison with a $14.4 million working loss within the prior yr interval. The prior yr working loss was pushed by a $44.3 million ($33.7 million internet of tax) non-cash intangible property impairment cost.

“We efficiently mitigated a large number of macroeconomic challenges for a lot of the yr on the Hooker legacy facet of the enterprise and for the primary half at Dwelling Meridian. We have been capable of develop gross sales, stay worthwhile and undertake transformative strategic initiatives for the long-term growth of the enterprise,” mentioned Jeremy Hoff, chief govt officer. “Notably through the first half of the yr, when all segments achieved double-digit gross sales will increase, we have been capable of higher meet historic ranges of demand with the correct merchandise and stock readiness,” he added. “HMI was extra rapidly and severely impacted by rising freight prices, diminished vessel house and the Covid-related manufacturing facility shutdowns which started in August,” Hoff concluded.

Macroeconomic challenges the Firm confronted in fiscal 2022 included hovering ocean freight prices and delivery bottlenecks all year long, materials and element elements inflation, and staffing and foam shortages. “Over the course of the final 18 months, transportation prices have roughly tripled, considerably rising our price of imported items offered,” Hoff mentioned.

“We have been capable of mitigate many of those dynamics till late summer season, when the sudden COVID-related shutdown of our Asian factories started and continued by way of many of the remainder of the fiscal yr,” Hoff mentioned. “Whereas incoming orders and backlogs remained traditionally excessive, this lack of manufacturing capability considerably diminished our provide of imported merchandise, which impacted Dwelling Meridian instantly and even started to trigger out of inventory points and low stock receipts at Hooker Branded within the 4^th quarter, regardless of that phase’s US warehousing mannequin,” he mentioned.

Consequently, the Firm reported a 13.2% consolidated gross sales lower within the fourth quarter that started on November 1, 2021 and ended January 30, 2022. Fourth quarter consolidated gross sales have been $134.8 million, with the decline pushed by a 23.7%, or $18.9 million, income lower at HMI and an 11.8%, or $5.8 million, gross sales decline at Hooker Branded. These decrease gross sales have been barely offset by a $3.2 million or 13.5%, improve in Home Upholstery gross sales through the fourth quarter.

Over the previous few months, our Asian suppliers have begun to ramp up manufacturing once more and are “at the moment working at round 85% to 90% capability and bettering weekly,” Hoff mentioned, including that “Whereas we anticipate that manufacturing of imported items will attain 100% capability someday through the first quarter of fiscal 2023, as we forecasted final quarter, we gained’t really feel the complete influence of upper manufacturing till the second quarter.”

Additionally within the 2022 fourth quarter, the Firm reported a consolidated working lack of $5.3 million, in comparison with $10.5 million of working earnings within the prior yr interval. Internet loss for the fourth quarter of fiscal 2022 was $4.0 million, or ($0.33) per diluted share, as in comparison with a internet earnings of $8.5 million, or $0.71 per diluted share, within the fourth quarter of fiscal 2021.

Pushed by a $12.0 million working loss at HMI, contributing components within the Firm’s fourth quarter consolidated internet loss included stock unavailability because of the Asian manufacturing facility shutdowns, excessive freight prices, a decline in ecommerce and hospitality furnishings gross sales and the Firm’s deliberate exit from unprofitable companies and channels. “Chargebacks from the Golf equipment channel that we’re exiting and one-time order cancellation prices as we wind down our ready-to-assemble (RTA) furnishings enterprise at HMI had a mixed price of over $5 million,” Hoff mentioned.

Phase Reporting: Hooker Branded

For the 2022 fiscal yr, internet gross sales elevated by $38.3 million, or 23.5%, at Hooker Branded, in comparison with the prior fiscal yr. The income beneficial properties are attributed to a stronger product portfolio, efficient provide chain and logistics administration and strong client demand.

“Hooker Branded managed nicely by way of some turbulent financial circumstances, attaining double-digit gross sales beneficial properties and elevated profitability for the yr, regardless of shedding gross sales momentum within the fourth quarter when stock outages attributable to the Asian manufacturing facility shutdowns caught up with us,” Hoff mentioned.

By the top of fiscal 2022, the vast majority of shipments within the Hooker Branded phase carried value will increase applied in July 2021 to mitigate increased ocean freight and product prices we had skilled to that time. Nonetheless, gross sales quantity declined within the fourth quarter attributable to diminished stock availability, leading to decrease working earnings in comparison with the fiscal 2021 fourth quarter.

Incoming orders elevated by 24.2% in comparison with the prior yr interval when enterprise dramatically rebounded from the preliminary Covid disaster. Backlog remained traditionally excessive and almost doubled as in comparison with the prior yr finish when backlog was already at a excessive stage, with a part of that improve being attributable to decrease shipments within the fourth quarter.

Phase Reporting: Dwelling Meridian

The Dwelling Meridian phase’s internet gross sales decreased by 1.2% in comparison with the prior yr interval attributable to decreased unit quantity as the results of COVID-related manufacturing facility shutdowns in Vietnam and Malaysia, which led to decrease shipments.

For the fiscal 2022 fourth quarter, the HMI phase’s gross sales decreased by $18.9 million or 23.7% as in comparison with the prior yr fourth quarter. Gross sales will increase within the first and second quarters of fiscal 2022 at HMI have been offset by the gross sales quantity loss through the second half of the yr.

Pushed by increased freight prices, exit prices from the RTA furnishings class, and vital chargebacks from the Golf equipment distribution channel, HMI reported a $21.3 million working loss for the yr. Larger freight prices adversely impacted gross margin by roughly 530 bps in fiscal 2022 and have been the first driver of elevated product prices. Present and anticipated future freight prices, which may have an hostile impact on potential revenue margins prompted us to rethink our entry into the RTA furnishings class. Consequently, HMI exited the RTA furnishings class and incurred one-time order cancellation prices of $2.6 million in fiscal 2022. As well as, attributable to continued poor profitability and extra chargebacks of $2.9 million, HMI made the choice to exit the Golf equipment channel and incurred one-time order cancellation prices of $900,000.

Though these actions adversely affected our earnings and partially resulted in an working loss, “We consider these actions enable us to deal with extra worthwhile companies and steady channels to drive long-term progress,” Hoff mentioned. “We’re now positioning our working capital and assets on stable companies like Pulaski, Samuel Lawrence, ACH and PRI with a purpose to be in inventory in our new 800,000-square-foot Georgia warehouse to service rising channels corresponding to brick and mortar retailers, the inside design commerce and ecommerce, whereas nonetheless rising our main companions,” Hoff mentioned.

Phase Reporting: Home Upholstery

The Home Upholstery phase’s internet gross sales elevated by $18.6 million, or 22.2%, in fiscal 2022 attributable to double-digit gross sales will increase in any respect three divisions of the phase. For the fiscal 2022 fourth quarter, Home Upholstery internet gross sales elevated by $3.2 million or 13.5%. Home Upholstery achieved a year-over-year gross sales improve throughout each quarter of the 2022 fiscal yr.

Nonetheless, gross margin decreased as in comparison with the prior yr and pre-pandemic ranges as this phase confronted manufacturing constraints which adversely impacted profitability, together with foam shortages early within the yr, increased uncooked materials and freight prices, and labor shortages and inefficiencies. The phase reported working earnings of $4.3 million, or a 4.2% working margin, as in comparison with a $12.4 million working loss within the prior yr, which was attributable to $16.4 million non-cash intangible property impairment cost. Incoming orders elevated by 38%, and this phase completed the yr with an order backlog 122% increased than the prior yr, when backlog ranges have been already at a historic excessive. Our manufacturing capability is rising weekly, which is able to assist us tackle this increased backlog.

Phase Reporting: All Different

All Different internet gross sales elevated by $197,000 or 1.7% as in comparison with the prior fiscal yr, due principally to a gross sales improve at Life-style Manufacturers, a enterprise began in fiscal 2019 focused on the inside design channel. Though this enterprise continues to be small, internet gross sales to the rising inside designer channel elevated almost 80% in comparison with the prior fiscal yr.

For the fiscal 2022 fourth quarter, All Different internet gross sales elevated by $1 million or 46.1% as H Contract internet gross sales elevated by 44.2%, which offset the gross sales decreases within the first three quarters. H Contract’s incoming orders elevated by 27% in fiscal 2022 and completed the yr with backlog 126% increased than prior yr finish.

Money, Debt and Stock

“Whereas inventories are nonetheless not at optimum ranges attributable to service demand and backlogs, now we have vital stock in transit and count on our stock ranges to enhance incrementally through the first quarter of fiscal 2023 and dramatically within the second quarter,” Hoff mentioned.

Money and money equivalents stood at $69.4 million at fiscal 2022 year-end, a rise of $3.5 million in comparison with the steadiness on the fiscal 2021 year-end due primarily to assortment of accounts receivable. Throughout fiscal 2022, the Firm used a portion of the $19.2 million generated from operations and $372,000 in life insurance coverage proceeds to pay $8.8 million in money dividends to our shareholders, and $6.7 million in capital expenditures, totally on our newly opened Georgia distribution middle and enhancements of different amenities and techniques.

Outlook

“Incoming orders and backlogs proceed to be robust in most divisions,” mentioned Hoff. “We’re involved about ongoing world logistics constraints and financial headwinds affecting the patron that might influence short-term demand, corresponding to inflation, excessive gasoline costs and the conflict in Ukraine.

As we talked about earlier, we count on manufacturing capability of our Asian suppliers to enhance considerably, reaching 100% capability sooner or later through the first quarter, though the complete monetary influence of this enchancment in stock readiness gained’t be felt till the second quarter. We stay optimistic that long-term developments will proceed to profit us, corresponding to demand for housing, the renewed and sustainable deal with dwelling interiors and exteriors, and the Millennial technology coming into their prime incomes and family formation years. We have been additionally very inspired by the lately concluded Spring Excessive Level market. Attendance was up considerably in comparison with each the Fall 2021 and June 2021 markets, extra according to pre-pandemic ranges. New merchandise have been very nicely acquired with main placements throughout all manufacturers, together with new placements of Dwelling Meridian’s licensed merchandise. 

Whereas now we have labored by way of a broad spectrum of challenges through the previous yr, our crew has continued to deal with a number of strategic progress initiatives, a lot of which we count on will positively influence us within the subsequent 6 to 12 months,” Hoff mentioned. “One such initiative is the mixing of Sundown West, a number one producer of outside furnishings, which we acquired on February 1^st of this yr. The acquisition instantly positioned Hooker within the rising outside furnishings phase of the business with probably the most revered manufacturers within the class and offers Sundown West entry to our East Coast distribution system, our Excessive Level showroom and retail and inside design buyer base. We have been happy with the robust reception Sundown West acquired at its latest Excessive Level market debut. As we combine Sundown West and transfer previous the present headwinds, we count on quicker progress from Sundown West than our present companies because it is ready to leverage the complete capabilities of our group,” Hoff concluded.

Convention Name Particulars

Hooker Furnishings will current its fiscal 2022 fourth quarter and year-end monetary outcomes through teleconference and stay web net forged on Wednesday morning, April 13, 2022 at 9:00 AM Jap Time. The dial-in quantity for home callers is 877.665.2466 and the quantity for worldwide callers is 678.894.3031. The convention ID quantity is 5331177. The decision will probably be concurrently net forged and archived for replay on the Firm’s website at www.hookerfurnishings.com within the Investor Relations part.

Hooker Furnishings Company, in its 98th yr of enterprise, is a designer, marketer and importer of casegoods (picket and steel furnishings), leather-based furnishings and fabric-upholstered furnishings for the residential, hospitality and contract markets. The Firm additionally domestically manufactures premium residential customized leather-based and customized fabric-upholstered furnishings. It’s ranked among the many nation’s largest publicly traded furnishings sources, based mostly on 2020 shipments to U.S. retailers, in accordance with a 2021 survey by a number one commerce publication. Main casegoods product classes embody dwelling leisure, dwelling workplace, accent, eating, and bed room furnishings within the upper-medium value factors offered underneath the Hooker Furnishings model. Hooker’s residential upholstered seating product strains embody Bradington-Younger, a specialist in upscale movement and stationary leather-based furnishings, Sam Moore Furnishings, a specialist in upscale occasional chairs, settees, sofas and sectional seating with an emphasis on cover-to-frame customization, Hooker Upholstery, imported upholstered furnishings focused on the upper-medium price-range and Shenandoah Furnishings, an upscale upholstered furnishings firm specializing in personal label sectionals, modulars, sofas, chairs, ottomans, benches, beds and eating chairs within the upper-medium value factors for way of life specialty retailers. The H Contract product line provides upholstered seating and casegoods to upscale senior residing amenities. The Dwelling Meridian division addresses extra reasonable value factors and channels of distribution not at the moment served by different Hooker Furnishings divisions or manufacturers. Dwelling Meridian’s manufacturers embody Accentrics Dwelling, dwelling furnishings centered round an eclectic mixture of distinctive items and supplies that provide a recent tackle dwelling style, Pulaski Furnishings, casegoods overlaying the entire design spectrum in a variety of bed room, eating room, accent and show cupboards at medium value factors, Samuel Lawrence Furnishings, value-conscious choices in bed room, eating room, dwelling workplace and youth furnishings, Prime Sources, value-conscious imported leather-based upholstered furnishings, and Samuel Lawrence Hospitality, a designer and provider of lodge furnishings. The Sundown West division is a designer and producer of snug, fashionable and high-quality outside furnishings. Hooker Furnishings Company’s company places of work and fabric manufacturing amenities are positioned in Virginia and North Carolina, with showrooms in Excessive Level, N.C., Las Vegas, N.V. and Ho Chi Minh Metropolis, Vietnam. The corporate operates distribution facilities in North Carolina, Virginia, Georgia, California, China and Vietnam. Please go to our web sites hookerfurnishings.com, hookerfurniture.com, bradington-young.com, sammoore.com, hcontractfurniture.com, homemeridian.com, pulaskifurniture.com, accentricshome.com, slh-co.com and sunsetwestusa.com.

Sure statements made on this launch, aside from these based mostly on historic details, could also be forward-looking statements. Ahead-looking statements replicate our affordable judgment with respect to future occasions and usually might be recognized by means of forward-looking terminology corresponding to “believes,” “expects,” “tasks,” “intends,” “plans,” “might,” “will,” “ought to,” “would,” “might” or “anticipates,” or the destructive thereof, or different variations thereon, or comparable terminology, or by discussions of technique. Ahead-looking statements are topic to dangers and uncertainties that might trigger precise outcomes to vary materially from these within the forward-looking statements. These dangers and uncertainties embody however usually are not restricted to: (1) disruptions involving our distributors or the transportation and dealing with industries, significantly these affecting imported merchandise from Vietnam, China, and Malaysia, together with customs points, labor stoppages, strikes or slowdowns and the provision and value of delivery containers and cargo ships; (2) the impact and penalties of the coronavirus (COVID-19) pandemic or future pandemics on a variety of issues together with however not restricted to U.S. and native economies; our enterprise operations and continuity; the well being and productiveness of our workers; and the influence on our world provide chain, inflation, the retail setting and our buyer base; (3) normal financial or enterprise circumstances, each domestically and internationally, and instability within the monetary and credit score markets, together with their potential influence on our (i) gross sales and working prices and entry to financing or (ii) prospects and suppliers and their means to acquire financing or generate the money essential to conduct their respective companies; (4) hostile political acts or developments in, or affecting, the worldwide markets from which we import merchandise, together with duties or tariffs imposed on these merchandise by overseas governments or the U.S. authorities, such because the prior U.S. administration’s imposition of a 25% tariff on sure items imported into the US from China together with virtually all furnishings and furnishings elements manufactured in China, which continues to be in impact, with the potential for extra or elevated tariffs sooner or later; (5) dangers related to our reliance on offshore sourcing and the price of imported items, together with fluctuation within the costs of bought completed items, ocean freight prices, together with the value and availability of delivery containers, vessels and home trucking, and warehousing prices and the danger {that a} disruption in our offshore suppliers might adversely have an effect on our means to well timed fill buyer orders; (6) dangers related to home manufacturing operations, together with fluctuations in capability utilization and the costs and availability of key uncooked supplies, in addition to adjustments in transportation, warehousing and home labor prices, availability of expert labor, and environmental compliance and remediation prices; (7) the dangers associated to the latest Sundown West acquisition together with integration prices, sustaining Sundown West’s present buyer relationships, the lack of key workers from Sundown West, the disruption of ongoing companies or inconsistencies in requirements, controls, procedures and insurance policies throughout the enterprise which might adversely have an effect on our inner management or data techniques and the prices of bringing them into compliance and failure to comprehend advantages anticipated from the acquisition; (8) adjustments in U.S. and overseas authorities laws and within the political, social and financial climates of the nations from which we supply our merchandise; (9) difficulties in forecasting demand for our imported merchandise; (10) dangers related to product defects, together with increased than anticipated prices related to product high quality and security, and regulatory compliance prices associated to the sale of client merchandise and prices associated to faulty or non-compliant merchandise, together with product legal responsibility claims and prices to recall faulty merchandise and the hostile results of destructive media protection; (11) disruptions and injury (together with these attributable to climate) affecting our Virginia, Georgia, North Carolina or California warehouses, our Virginia or North Carolina administrative amenities, our North Carolina and Las Vegas showrooms or our consultant places of work or warehouses in Vietnam and China; (12) dangers related to our newly leased warehouse house in Georgia, together with dangers related to our transfer to and occupation of the ability, together with data techniques, entry to warehouse labor and the shortcoming to comprehend anticipated price financial savings; (13) the dangers particularly associated to the concentrations of a cloth a part of our gross sales and accounts receivable in only some prospects, together with the lack of a number of giant prospects by way of enterprise consolidations, failures or different causes, or the lack of vital gross sales applications with main prospects; (14) our incapacity to gather quantities owed to us or vital delays in accumulating such quantities; (15) the interruption, inadequacy, safety breaches or integration failure of our data techniques or data know-how infrastructure, associated service suppliers or the web or different associated points together with unauthorized disclosures of confidential data or insufficient ranges of cyber-insurance or dangers not coated by cyber- insurance coverage; (16) the direct and oblique prices and time spent by our associates related to the implementation of our Enterprise Useful resource Planning system (“ERP”), together with prices ensuing from unanticipated disruptions to our enterprise; (17) attaining and managing progress and alter, and the dangers related to new enterprise strains, acquisitions, together with the number of appropriate acquisition targets, restructurings, strategic alliances and worldwide operations; (18) the impairment of our long-lived property, which can lead to diminished earnings and internet price; (19) capital necessities and prices; (20) dangers related to distribution by way of third-party retailers, corresponding to non-binding dealership preparations; (21) the price and problem of selling and promoting our merchandise in overseas markets; (22) adjustments in home and worldwide financial insurance policies and fluctuations in overseas forex alternate charges affecting the value of our imported merchandise and uncooked supplies; (23) the cyclical nature of the furnishings business, which is especially delicate to adjustments in client confidence, the quantity of shoppers’ earnings obtainable for discretionary purchases, and the provision and phrases of client credit score; (24) value competitors within the furnishings business; (25) competitors from non-traditional shops, corresponding to web and catalog retailers; (26) adjustments in client preferences, together with elevated demand for lower-quality, lower-priced furnishings and (27) different dangers and uncertainties described underneath Half I, Merchandise 1A. “Threat Elements” within the Firm’s Annual Report on Type 10-Ok for the fiscal yr ended January 31, 2021. Any forward-looking assertion that we make speaks solely as of the date of that assertion, and we undertake no obligation, besides as required by regulation, to replace any forward-looking statements whether or not on account of new data, future occasions or in any other case and you shouldn’t count on us to take action.

For extra data, contact:
Jeremy R. Hoff, Chief Govt Officer and Director
Telephone: (276) 632-2133, or
Paul A. Huckfeldt, Senior Vice President, Finance & Accounting & Chief Monetary Officer
Telephone: (276) 666-3949