Hooker earnings down
By Larry Thomas -- Furniture Today, January 15, 2006
Martinsville, Va. — A steep decline in shipments of its domestically made wood furniture resulted in reduced sales and earnings at Hooker Furniture in fiscal 2005.
The manufacturer and importer of wood and upholstered furniture said sales totaled $341 million for the year ended Nov. 30, down 1.4% from fiscal 2004. Net income of $11.8 million was down 35% from the previous year.
The company said sales of imported wood and metal furniture increased 8.8% to $201.7 million, and sales of its Bradington-Young upholstery unit rose 8.6% to $62.5 million.
But that wasn't enough to offset a 25.5% decline in sales of domestically made furniture, which totaled $76.8 million.
"We are not pleased with our recent sales and earnings, and are taking steps to improve both," said Paul Toms Jr., chairman and CEO. "We have identified targets for improvement in our product lineup, inventory requirements and vendor performance."
The net income figure included $5.3 million in restructuring charges related to the closing of Hooker's Pleasant Garden, N.C., factory last fall.
Toms said the company's financial performance also was hurt by declining consumer confidence and a variety of inventory management and supply chain issues.
"To address our increasingly complex supply chain network, we established a new department of supply chain management and activated comprehensive logistics software and distribution systems," he said. "We expect to be better positioned to realize improvements in the timely flow of products and information, inventory management and vendor management this year and beyond."
In the fourth quarter, sales declined 2.8% to $89.4 million and net income slid 38.4% to $3.4 million.
Toms said the company has seen a slight improvement in incoming order rates in late fall and early winter, but he's projecting that sales for the first quarter will be 3% to 7% below last year's numbers.
| Hooker Furniture | |||
|---|---|---|---|
| Owns Bradington-Young | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 11/30 | 2005 | 2004 | Change |
| (a) Includes pretax restructuring and related asset impairment charges of $5.3 million in the 2005 year, $211,000 in the 2005 quarter, and $1.6 million in the 2004 year. In the 2004 fourth quarter, the company recorded a $369,000 pretax credit on the sale of property. |
|||
| Sales | $89,394,000 | $91,923,000 | (2.8%) |
| Operating income | 5,761,000 | 9,269,000 | (37.8%) |
| Net income (a) | 3,354,000 | 5,447,000 | (38.4%) |
| Earnings per share | 0.28 | 0.46 | (39.1%) |
| 12 months ended 11/30 | 2005 | 2004 | Change |
| Sales | $341,016,000 | $345,944,000 | (1.4%) |
| Operating income | 25,380,000 | 32,770,000 | (22.6%) |
| Net income (a) | 11,827,000 | 18,204,000 | (35.0%) |
| Earnings per share | 1.00 | 1.56 | (35.9%) |
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