Hooker Furniture Reports Double-Digit Sales and Income Gains for Second Quarter

Hooker Furniture Reports Double-Digit Sales and Income Gains for Second
Quarter

MARTINSVILLE, Va., Sept. 4, 2013 (GLOBE NEWSWIRE) -- Hooker Furniture
(Nasdaq:HOFT) today reported net sales of $55.3 million and net income of $1.7
million, or $0.16 per share, for its fiscal 2014 second quarter ended August
4, 2013. Sales increased 10.2%, or $5.1 million, and net income increased
14.4% or $213,000 compared to last year's second quarter. Earnings per share
increased to $0.16 from $0.14 in the comparable period a year ago.

For the fiscal 2014 first half, net sales increased 9.5%, or $9.7 million, to
$111.6 million, and net income increased 52.9%, or $1.3 million, to $3.8
million, or $0.35 per share compared to $0.23 in the prior-year period.

In the second quarter, the net sales gain was driven by higher average selling
prices in casegoods and upholstery and increased unit volume and lower
discounting in the upholstery segment. For the first half, sales increases
were driven by higher average selling prices in both operating segments, along
with increased unit volume in upholstery.

"Given the current business environment, we're gratified to have achieved
sales increases this quarter in both upholstery and casegoods, and a 10%
consolidated sales increase," said Paul B. Toms Jr., chairman and chief
executive officer. "While we entered May with healthy demand and momentum, we
saw demand and retail business progressively slow as we moved through the
summer. We believe the reduction in demand and retail activity in the second
half of the summer compared to the first was typical throughout the furniture
industry," he added.

"Our ability to achieve a consolidated sales increase in the nine to ten
percent range for the third consecutive quarter despite the softer demand this
summer is a reflection of our solid inventory position on best-selling
products, our increased upholstery manufacturing capacity and steady promotion
of what we believe to be our strongest product line in several years," Toms
said.

"We are optimistic about our longer-term future, both with our core business
and our new ventures with the H Contract brand targeting retirement housing
and senior living facilities, and the Homeware online-only brand." Start-up
costs associated with the H Contract and Homeware brands were approximately
$563,000 before tax and $363,000 after tax, or $0.03 per share, in the second
quarter, Toms said. "For the first half, start- up costs were approximately
$1.0 million before tax and $657,000 after tax, or $0.06 per share," he said.
The Company projects start-up costs for the two new initiatives will account
for $0.12 to $0.15 per share for the full 2014 fiscal year.

Fiscal 2014 second quarter highlights (compared to fiscal 2013 second
quarter):

  *Gross profit increased $2.0 million, or 17.7%, to $13.3 million, or 24.0%
    of net sales, from $11.3 million, or 22.5% of net sales. These
    improvements were primarily due to higher sales volume, reduced cost of
    sales as a percentage of net sales for casegoods and reduced upholstery
    manufacturing costs as a percentage of net sales.
  *Selling and administrative expenses increased $1.7 million to $10.6
    million, or 19.2% of net sales, from $8.9 million, or 17.8% of net sales
    due to start-up costs for the H Contract and Homeware brands, and
    increased:
     - bonus expense, due to improved earnings performance;
     - professional services due to increased compliance and regulatory
    costs; and
     - commissions and selling expenses due to increased sales.
  *Operating income increased to 4.8% of net sales, from 4.6%, and increased
    in absolute terms by 13.7%, or $317,000, to $2.6 million, from $2.3
    million.
  *Net income increased $213,000, or 14.4% to $1.7 million, or 3.1% of net
    sales, from $1.5 million, or 2.9% of net sales.

Fiscal 2014 first half highlights (compared to fiscal 2013 first half):

  *Gross profit increased $5 million, or 22.5%, to $27.2 million, or 24.3% of
    net sales, from $22.2 million, or 21.8% of net sales. These changes were
    primarily due to higher sales volume, reduced cost of sales as a
    percentage of net sales for casegoods and reduced upholstery manufacturing
    costs as a percentage of net sales.
  *Selling and administrative expenses increased $3 million, or 16.2%, to
    $21.3 million, or 19.1% of net sales, from $18.3 million, or 18.0% of net
    sales due to start-up costs from H Contract and Homeware and increased:
     - bonus expense, due to improved earnings performance;
     - professional services due to increased compliance and regulatory
    costs; and
     - commissions and selling expenses due to increased sales.
  *Operating income increased as a percentage of net sales to 5.3%, from
    3.8%, and in absolute terms by $2 million or 52.6%, from $3.9 million to
    $5.9 million.
  *Net income increased as a percentage of net sales to 3.4%, from 2.5%, and
    in absolute terms by 52.9%, or $1.3 million, to $3.8 million, or $0.35 per
    share, compared to $2.5 million, or $0.23 per share in the prior year.

Cash, Inventory and Debt

"Although inventory levels have been reduced, they are still a little above
target as we head into the fall selling season," said Toms. "This is a result
of improved delivery from our vendors and demand that has not materialized as
fully as expected. During the second quarter, our level of discounting was
higher than the first quarter, as we became more aggressive in reducing our
inventories of older, slower moving products to make room for new
introductions and best sellers. For the remainder of the fiscal year, we
expect product discounting to be higher than we experienced in the second
quarter. However, the ultimate effect on margins is largely dependent on the
mix of discounted and non-discounted products that we're able to sell over the
second-half of the fiscal year," Toms concluded.

Cash and cash equivalents increased $2.6 million to $29 million as of August
4, 2013, from $26.3 million on February 3, 2013, due principally to:

  *a $2.0 million decrease in accounts receivable, due to higher sales in the
    2013 fourth quarter; and
  *a $1.4 million decrease in inventories due to efforts to match inventory
    to current demand.

The Company had no long-term debt at August 4, 2013 and had $13.0 million
available on its $15.0 million revolving credit facility, net of $2.0 million
reserved for standby letters of credit.

Business Outlook

"The decreased demand at retail as we moved through the summer has made us a
little less bullish than we were coming out of the first quarter. The housing
market has slowed somewhat with rising mortgage rates and housing costs, and
we believe our industry is tied closer to housing than any other metric.
However, other economic indicators are generally positive, with housing
affordability still favorable from a recent historical perspective and with
consumer confidence reaching its highest level since January 2008 in June of
this year. We believe we are positioned well to capitalize quickly on any
upturn in business through our strong inventory position on best-sellers, our
increased production capacity in upholstery, our salable core product line and
new business initiatives to expand our market reach," Toms concluded.

Dividends

At its September 4, 2013 meeting, the Company's board of directors declared a
quarterly cash dividend of $0.10 per share, payable on September 27, 2013, to
shareholders of record at September 13, 2013.

Conference Call Details

Hooker Furniture will present its fiscal 2014 second quarter results via
teleconference and live internet web cast on Wednesday afternoon, September 4,
2013 at 1:00 PM Eastern Time. The dial-in number for domestic callers is
877-665-2466 and the number for international callers is 678-894-3031. 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.

Ranked among the nation's top 10 largest publicly traded furniture sources
based on 2012 shipments to U.S. retailers, Hooker Furniture Corporation is an
89-year old residential wood, metal and upholstered furniture resource.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 companies
include Bradington-Young, a specialist in upscale motion and stationary
leather furniture, and Sam Moore Furniture, a specialist in upscale occasional
chairs, settees, sofas and sectional seating with an emphasis on
cover-to-frame customization.Please visit our websites at
www.hookerfurniture.com, www.bradington-young.com,and www.sammoore.com.

Certain statements made in this report, other than those based on historical
facts, are forward-looking statements. These statements reflect our reasonable
judgment with respect to future events and typically can be identified by the
use of forward-looking terminology such as "believes," "expects," "projects,"
"intends," "plans," "may," "will," "should," "would," "could"or
"anticipates," or the negative thereof, or other variations thereon, or
comparable terminology, or by discussions of strategy.Forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking
statements.Those risks and uncertainties include but are not limited to:(1)
general economic or business conditions, both domestically and
internationally, and instability in the financial and credit markets,
including their potential impact on our (i) sales and operating costs and
access to financing or (ii) customers and suppliers and their ability to
obtain financing or generate the cash necessary to conduct their respective
businesses; (2) disruptions involving our vendors or the transportation and
handling industries, particularly those affecting imported products, including
customs issues, labor stoppages, strikes or slowdowns and the availability of
shipping containers and cargo ships; (3) disruptions affecting our Henry
County, Virginia warehouses and corporate headquarters facilities; (4) price
competition in the furniture industry; (5) changes in domestic and
international monetary policies and fluctuations in foreign currency exchange
rates affecting the price of our imported products and raw materials; (6) 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;
(7) risks associated with the cost of imported goods, including fluctuation in
the prices of purchased finished goods and transportation and warehousing
costs; (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; (9) 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 and environmental
compliance and remediation costs; (10) our ability to successfully implement
our business plan to increase sales and improve financial performance; (11)
the direct and indirect costs associated with the implementation of our
Enterprise Resource Planning system, including costs resulting from
unanticipated disruptions to our business; (12) achieving and managing growth
and change, and the risks associated with new business lines, acquisitions,
restructurings, strategic alliances and international operations; (13) risks
associated with distribution through third-party retailers, such as
non-binding dealership arrangements; (14) capital requirements and costs; (15)
competition from non-traditional outlets, such as catalog and internet
retailers and home improvement centers; (16) changes in consumer preferences,
including increased demand for lower-quality, lower-priced furniture due to
declines in consumer confidence and/or discretionary income available for
furniture purchases and the availability of consumer credit; and (17) higher
than expected costs associated with product quality and safety, including
regulatory compliance costs related to the sale of consumer products and costs
related to defective or non-compliant products. 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.

Table I
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
                                                                
                                  Thirteen Weeks Ended Twenty-Six Weeks Ended
                                  August 4,  July 29,  August 4,   July 29,
                                   2013       2012      2013        2012
                                                                
Net sales                          $55,301  $50,185 $111,596  $101,915
                                                                
Cost of sales                      42,044    38,920   84,423     79,728
                                                                
Gross profit                       13,257    11,265   27,173     22,187
                                                                
Selling and administrative         10,617    8,943    21,299     18,337
expenses
                                                                
Operating income                   2,640     2,322    5,874      3,850
                                                                
Other (expense) income, net        (22)      20       (54)       64
                                                                
Income before income taxes         2,618     2,342    5,820      3,914
                                                                
Income tax expense                 930       868      2,006      1,420
                                                                
Net income                         $1,688   $1,474  $3,814    $2,494
                                                                
Earnings per share:                                              
Basic                              $0.16    $0.14   $0.35     $0.23
Diluted                            $0.16    $0.14   $0.35     $0.23
                                                                
Weighted average shares                                          
outstanding:
Basic                              10,722     10,770    10,719      10,771
Diluted                            10,753     10,789    10,749      10,800



Table II
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

                                  Thirteen Weeks Ended Twenty-Six Weeks Ended
                                  August 4,  July 29,  August 4,   July 29,
                                   2013       2012      2013        2012
                                                                
Net Income                         $1,688   $1,474  $3,814    $2,494
Other comprehensive income:                                      
Amortization of actuarial gains   (27)      (14)     (53)       (29)
Income tax effect on amortization  10        5        19         11
of actuarial gains
Adjustments to net periodic        (17)      (9)      (34)       (18)
benefit cost
                                                                
Comprehensive Income               $1,671   $1,465  $3,780    $2,476
                                                                



Table III
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, including share data)
                                                                 
                                                                 
                                                       August 4,  February 3,
                                                        2013       2013
Assets                                                            
Current assets                                                    
Cash and cash equivalents                               $28,974  $26,342
Accounts receivable, less allowance for                 26,234     28,272
doubtfulaccounts of $1,068 and $1,249, respectively
Inventories                                             48,494     49,872
Prepaid expenses and other current assets               4,687      5,181
Total current assets                                    108,389   109,667
Property, plant and equipment, net                      23,347     22,829
Intangible assets                                       1,257      1,257
Cash surrender value of life insurance policies         18,264     17,360
Other assets                                            4,631     4,710
Total assets                                            $155,888 $155,823
                                                                 
Liabilities and Shareholders' Equity                              
Current liabilities                                               
Trade accounts payable                                  $10,801  $11,620
Accrued salaries, wages and benefits                    3,073      3,316
Other accrued expenses                                  1,549      2,531
Total current liabilities                               15,423    17,467
Deferred compensation                                   7,671      7,311
Total liabilities                                       23,094    24,778
                                                                 
Shareholders' equity                                              
Common stock, no par value, 20,000 shares authorized,
10,753 and 10,746 shares issued and outstanding on each 17,471     17,360
date
Retained earnings                                      115,155    113,483
Accumulated other comprehensive income                  168       202
Total shareholders' equity                              132,794   131,045
Total liabilities and shareholders' equity              $155,888 $155,823



Table IV
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                                 
                                                     Twenty-Six Weeks Ended
                                                     August 4,   July 29,
                                                      2013         2012
Cash flows from operating activities                            
Cash received from customers                        $113,624   $104,093
Cash paid to suppliers and employees                (103,561)    (95,713)
Income taxes (paid)/received, net                   (3,368)      13
Interest (paid)/received, net                       (47)         (20)
Net cash provided by operating activities           6,648        8,373
                                                                 
Cash flows from investing activities                            
Purchase of property, plant and equipment           (1,726)      (2,935)
Proceeds received on notes issued for the sale of    28           18
property
Proceeds from the sale of property and equipment    31           598
Premiums paid on life insurance policies            (715)        (783)
Proceeds received on life insurance policies        516         --
Net cash used in investing activities               (1,866)      (3,102)
                                                                 
Cash flows from financing activities                            
Cash dividends paid                                 (2,150)      (2,159)
Purchase and retirement of common stock             --         (142)
Net cash used in financing activities               (2,150)      (2,301)
                                                                 
Net increase in cash and cash equivalents           2,632        2,970
Cash and cash equivalents at beginning of period    26,342       40,355
Cash and cash equivalents at end of period          $28,974    $43,325
                                                                 
Reconciliation of net income to net cash providedby              
operating activities:
Net income                                          $3,814     $2,494
Depreciation and amortization                       1,186        1,475
Non-cash restricted stock awards and performance     333          160
grants
Provision for doubtful accounts                     (33)         (13)
Deferred income taxes                               (95)         387
(Gain) on disposal of property                      (9)         (39)
(Gain) on insurance policies                        (451)       (460)
Changes in assets and liabilities:                              
Accounts receivable                                 2,071        2,109
Inventories                                         1,378        (1,684)
Prepaid expenses and other current assets           406          774
Trade accounts payable                              (819)        3,427
Accrued salaries, wages and benefits                (243)        (1,534)
Accrued income taxes                                (751)        1,046
Other accrued expenses                              (231)        170
Deferred compensation                               92           61
Net cash provided by operating activities           $6,648     $8,373

CONTACT: Paul B. Toms Jr.
         Chairman and Chief Executive Officer
         Phone: (276) 632-2133, or
         Paul Huckfeldt, Vice President, Chief Financial Officer
         Phone: (276) 632-2133, or
         Kim D. Shaver
         Vice President, Marketing Communications
         Phone: (336) 880-1230

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