Virginia | 54-0251350 |
(State or other jurisdiction of incorporation or organization) | (IRS employer identification no.) |
Large accelerated Filer ¨ | Accelerated filer x |
Non-accelerated Filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Common stock, no par value | 10,793,233 |
(Class of common stock) | (Number of shares) |
PART I. FINANCIAL INFORMATION
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||
Item 1.
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3
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|
Item 2.
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12
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Item 3.
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21
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Item 4.
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21
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|
PART II. OTHER INFORMATION
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||
Item 6.
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22
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23
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(Unaudited)
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||||||||
July 31,
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January 30,
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|||||||
2011
|
2011
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|||||||
Assets
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||||||||
Current Assets
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||||||||
Cash and cash equivalents
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$ | 30,427 | $ | 16,623 | ||||
Accounts receivable, less allowance for doubtful accounts of $1,828 and $2,082, respectively
|
26,414 | 27,670 | ||||||
Inventories
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42,108 | 57,438 | ||||||
Prepaid expenses and other current assets
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5,018 | 4,965 | ||||||
Total current assets
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103,967 | 106,696 | ||||||
Property, plant and equipment, net
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21,279 | 20,663 | ||||||
Intangible assets
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3,072 | 3,072 | ||||||
Cash surrender value of life insurance policies
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15,482 | 15,026 | ||||||
Other assets
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5,017 | 4,954 | ||||||
Total assets
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$ | 148,817 | $ | 150,411 | ||||
Liabilities and Shareholders' Equity
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||||||||
Current Liabilities
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||||||||
Trade accounts payable
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$ | 9,386 | $ | 11,785 | ||||
Accrued salaries, wages and benefits
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2,816 | 3,426 | ||||||
Other accrued expenses
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2,284 | 1,111 | ||||||
Accrued dividends
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1,078 | 1,077 | ||||||
Total current liabilities
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15,564 | 17,399 | ||||||
Deferred compensation
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6,533 | 6,242 | ||||||
Total liabilities
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22,097 | 23,641 | ||||||
Shareholders' equity
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||||||||
Common stock, no par value, 20,000 shares authorized,
10,793 and 10,782 shares issued and outstanding on each date, respectively
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17,200 | 17,161 | ||||||
Retained earnings
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109,013 | 109,000 | ||||||
Accumulated other comprehensive income
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507 | 609 | ||||||
Total shareholders' equity
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126,720 | 126,770 | ||||||
Total liabilities and shareholders' equity
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$ | 148,817 | $ | 150,411 |
Thirteen Weeks Ended
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Twenty-Six Weeks Ended
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|||||||||||||||
July 31,
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August 1,
|
July 31,
|
August 1,
|
|||||||||||||
2011
|
2010
|
2011
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2010
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|||||||||||||
Net sales
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$ | 55,574 | $ | 53,377 | $ | 113,967 | $ | 104,730 | ||||||||
Cost of sales
|
43,411 | 41,421 | 90,771 | 80,505 | ||||||||||||
Casualty loss
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- | 183 | - | 2,208 | ||||||||||||
Insurance recovery
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- | (183 | ) | - | (1,708 | ) | ||||||||||
Total cost of sales
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43,411 | 41,421 | 90,771 | 81,005 | ||||||||||||
Gross profit
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12,163 | 11,956 | 23,196 | 23,725 | ||||||||||||
Selling and administrative expenses
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9,669 | 10,387 | 19,955 | 20,450 | ||||||||||||
Operating income
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2,494 | 1,569 | 3,241 | 3,275 | ||||||||||||
Other income, net
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27 | 44 | 81 | 56 | ||||||||||||
Income before income taxes
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2,521 | 1,613 | 3,322 | 3,331 | ||||||||||||
Income tax expense
|
875 | 435 | 1,153 | 1,079 | ||||||||||||
Net income
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$ | 1,646 | $ | 1,178 | $ | 2,169 | $ | 2,252 | ||||||||
Earnings per share
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||||||||||||||||
Basic
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$ | 0.15 | $ | 0.11 | $ | 0.20 | $ | 0.21 | ||||||||
Diluted
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$ | 0.15 | $ | 0.11 | $ | 0.20 | $ | 0.21 | ||||||||
Weighted average shares outstanding:
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||||||||||||||||
Basic
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10,761 | 10,757 | 10,761 | 10,757 | ||||||||||||
Diluted
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10,784 | 10,768 | 10,785 | 10,767 | ||||||||||||
Cash dividends declared per share
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$ | 0.10 | $ | 0.10 | $ | 0.20 | $ | 0.20 |
Twenty-Six Weeks Ended
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||||||||
July 31,
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August 1,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities
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||||||||
Cash received from customers
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$ | 115,290 | $ | 102,047 | ||||
Cash paid to suppliers and employees
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(96,924 | ) | (107,059 | ) | ||||
Insurance proceeds received on casualty loss
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- | 1,350 | ||||||
Income taxes paid, net
|
(115 | ) | (1,863 | ) | ||||
Interest received / (paid), net
|
20 | (54 | ) | |||||
Net cash provided by / (used in) operating activities
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18,271 | (5,579 | ) | |||||
Cash flows from investing activities
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||||||||
Purchase of property, plant and equipment
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(1,871 | ) | (382 | ) | ||||
Proceeds received on notes issued for the sale of property, plant and equipment
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17 | 18 | ||||||
Proceeds from the sale of property and equipment
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3 | - | ||||||
Premiums paid on company-owned life insurance
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(1,020 | ) | (1,195 | ) | ||||
Proceeds received on officers' life insurance
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560 | 1,102 | ||||||
Net cash used in investing activities
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(2,311 | ) | (457 | ) | ||||
Cash flows from financing activities
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||||||||
Cash dividends paid
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(2,156 | ) | (2,155 | ) | ||||
Net cash used in financing activities
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(2,156 | ) | (2,155 | ) | ||||
Net increase / (decrease) in cash and cash equivalents
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$ | 13,804 | $ | (8,191 | ) | |||
Cash and cash equivalents at the beginning of the period
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16,623 | 37,995 | ||||||
Cash and cash equivalents at the end of the period
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$ | 30,427 | $ | 29,804 | ||||
Reconciliation of net income to net cash provided by / (used in) operating activities:
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||||||||
Net income
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$ | 2,169 | $ | 2,252 | ||||
Depreciation and amortization
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1,255 | 1,500 | ||||||
Non-cash restricted stock awards and performance grants
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(101 | ) | 34 | |||||
Provision for doubtful accounts
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705 | 100 | ||||||
Deferred income taxes
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(346 | ) | (787 | ) | ||||
Gain on disposal of property
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(3 | ) | - | |||||
Changes in assets and liabilities:
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||||||||
Trade accounts receivable
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551 | (1,551 | ) | |||||
Inventories
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15,330 | (10,779 | ) | |||||
Prepaid expenses and other current assets
|
279 | (792 | ) | |||||
Trade accounts payable
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(2,399 | ) | 3,249 | |||||
Accrued salaries, wages, and benefits
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(448 | ) | 609 | |||||
Accrued income taxes
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1,384 | 3 | ||||||
Other accrued expenses
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(373 | ) | (41 | ) | ||||
Deferred compensation
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268 | 624 | ||||||
Net cash provided by / (used in) operating activities
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$ | 18,271 | $ | (5,579 | ) |
§
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the 2012 fiscal year and comparable terminology mean the fiscal year that began January 31, 2011 and will end January 29, 2012; and
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§
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the 2011 fiscal year and comparable terminology mean the fiscal year that began February 1, 2010 and ended January 30, 2011.
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July 31,
|
January 30,
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|||||||
2011
|
2011
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|||||||
Finished furniture
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$ | 49,320 | $ | 63,201 | ||||
Furniture in process
|
570 | 639 | ||||||
Materials and supplies
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8,462 | 9,065 | ||||||
Inventories at FIFO
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58,352 | 72,905 | ||||||
Reduction to LIFO basis
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16,244 | 15,467 | ||||||
Inventories
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$ | 42,108 | $ | 57,438 |
July 31,
|
January 30,
|
|||||||
2011
|
2011
|
|||||||
Buildings and land improvements
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$ | 24,265 | $ | 23,784 | ||||
Machinery and equipment
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3,677 | 3,469 | ||||||
Furniture and fixtures
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27,834 | 27,615 | ||||||
Other
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4,218 | 4,163 | ||||||
Total depreciable property at cost
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59,994 | 59,031 | ||||||
Less accumulated depreciation
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42,390 | 41,169 | ||||||
Total depreciable property, net
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17,604 | 17,862 | ||||||
Land
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1,357 | 1,357 | ||||||
Construction in progress
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2,318 | 1,444 | ||||||
Property, plant and equipment, net
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$ | 21,279 | $ | 20,663 |
July 31,
|
January 30,
|
|||||||
2011
|
2011
|
|||||||
Non-amortizable Intangible Assets
|
||||||||
Trademarks and trade names - Bradington-Young
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$ | 2,676 | $ | 2,676 | ||||
Trademarks and trade names - Sam Moore
|
396 | 396 | ||||||
Total trademarks and tradenames
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$ | 3,072 | $ | 3,072 |
July 31,
|
January 30,
|
|||||||
2011
|
2011
|
|||||||
Trade accounts receivable
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$ | 21,959 | $ | 24,540 | ||||
Receivable from factor
|
6,283 | 5,212 | ||||||
Allowance for doubtful accounts
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(1,828 | ) | (2,082 | ) | ||||
Accounts receivable
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$ | 26,414 | $ | 27,670 |
Thirteen Weeks Ended
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Twenty-Six Weeks Ended
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|||||||||||||||
July 31,
|
August 1,
|
July 31,
|
August 1,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
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$ | 1,646 | $ | 1,178 | $ | 2,169 | $ | 2,252 | ||||||||
Portion of accumulated acturial gain on supplemental
retirement income plan reclassified to deferred
compensation expense |
(82 | ) | (59 | ) | (164 | ) | (119 | ) | ||||||||
Other comprehensive loss before tax
|
(82 | ) | (59 | ) | (164 | ) | (119 | ) | ||||||||
Income tax benefit
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31 | 22 | 62 | 45 | ||||||||||||
Other comprehensive loss, net of tax
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(51 | ) | (37 | ) | (102 | ) | (74 | ) | ||||||||
Comprehensive net income
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$ | 1,595 | $ | 1,141 | $ | 2,067 | $ | 2,178 |
Thirteen Weeks Ended
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Twenty-Six Weeks Ended
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|||||||||||||||
July 31,
|
August 1,
|
July 31,
|
August 1,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
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$ | 1,646 | $ | 1,178 | $ | 2,169 | $ | 2,252 | ||||||||
Less: Unvested participating restricted stock dividends
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4 | 2 | 5 | 4 | ||||||||||||
Earnings available for common shareholders
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1,642 | 1,176 | 2,164 | 2,248 | ||||||||||||
Weighted average shares outstanding for basic earnings per share
|
10,761 | 10,757 | 10,761 | 10,757 | ||||||||||||
Dilutive effect of unvested restricted stock awards
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23 | 11 | 23 | 10 | ||||||||||||
Weighted average shares outstanding for diluted earnings per share
|
10,784 | 10,768 | 10,785 | 10,767 | ||||||||||||
Basic earnings per share
|
$ | 0.15 | $ | 0.11 | $ | 0.20 | $ | 0.21 | ||||||||
Diluted earnings per share
|
$ | 0.15 | $ | 0.11 | $ | 0.20 | $ | 0.21 |
July 31,
|
January 30,
|
|||||||
2011
|
2011
|
|||||||
Accrued salaries, wages and benefits (current portion)
|
$ | 435 | $ | 435 | ||||
Deferred compensation (long-term portion)
|
6,533 | 6,102 | ||||||
Total liability
|
$ | 6,968 | $ | 6,537 |
Thirteen Weeks Ended
|
Twenty-Six Weeks Ended
|
|||||||||||||||
July 31,
|
August 1,
|
July 31,
|
August 1,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 131 | $ | 146 | $ | 262 | $ | 292 | ||||||||
Interest cost
|
84 | 85 | 168 | 170 | ||||||||||||
Actuarial gain
|
(81 | ) | (59 | ) | (162 | ) | (118 | ) | ||||||||
Net periodic benefit cost
|
$ | 134 | $ | 172 | $ | 268 | $ | 344 |
§
|
An increase of 3.5% due to non-taxable life insurance proceeds received in the second quarter of fiscal 2011;
|
§
|
An increase of 2.1% due to a large, one-time donation of appreciated property during fiscal 2011;
|
§
|
An increase of 1.7% due to the successful abatement of a prior year tax penalty in fiscal 2011;
|
§
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An increase of 0.8% in projected state income tax expense for fiscal 2012; and
|
§
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A decrease of 0.8% due to the accrual of an anticipated distribution from our captive insurance arrangement in fiscal 2012.
|
§
|
An increase of 1.6% due to non-taxable life insurance proceeds received in fiscal 2011;
|
§
|
An increase of 0.8% due to the successful abatement of a prior year tax penalty in fiscal 2011;
|
§
|
A decrease of 0.8% due to the accrual of an anticipated distribution from the Company’s captive insurance arrangement in fiscal 2012; and
|
§
|
An increase of 0.4% in projected state income tax expense for fiscal 2012.
|
§
|
the 2012 fiscal year and comparable terminology mean the fiscal year that began January 31, 2011 and will end January 29, 2012; and
|
§
|
the 2011 fiscal year and comparable terminology mean the fiscal year that began February 1, 2010 and ended January 30, 2011.
|
§
|
consumer confidence,
|
§
|
fashion trends,
|
§
|
availability of consumer credit,
|
§
|
energy and other commodity prices and
|
§
|
housing and mortgage markets,
|
§
|
disposable income,
|
§
|
housing changes, and
|
§
|
change in family size.
|
§
|
Net sales increased 4.1% and 8.8% for the three and six-month periods ended July 31, 2011, respectively, reflecting increased order rates.
|
§
|
Gross margins decreased compared to both fiscal 2011 periods, primarily due to increased product discounting and higher returns and allowances.
|
§
|
Selling and administrative expenses decreased in absolute terms compared to both fiscal year 2011 periods, primarily as a result of:
|
o
|
decreased salaries and employee related costs,
|
o
|
lower bad debts expense and
|
o
|
lower depreciation and amortization expense,
|
o
|
partially offset by higher sales commissions and increased advertising supplies expense due to higher sales.
|
Thirteen Weeks Ended
|
Twenty-Six Weeks Ended
|
|||||||||||||||
July 31,
|
August 1,
|
July 31,
|
August 1,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of sales
|
78.1 | 77.6 | 79.6 | 76.8 | ||||||||||||
Casualty loss
|
- | 0.3 | - | 2.1 | ||||||||||||
Insurance recovery
|
- | (0.3 | ) | - | (1.6 | ) | ||||||||||
Total cost of sales
|
78.1 | 77.6 | 79.6 | 77.4 | ||||||||||||
Gross profit
|
21.9 | 22.4 | 20.4 | 22.7 | ||||||||||||
Selling and administrative expenses
|
17.4 | 19.5 | 17.5 | 19.5 | ||||||||||||
Operating income
|
4.5 | 2.9 | 2.8 | 3.1 | ||||||||||||
Other income, net
|
- | 0.1 | 0.1 | 0.1 | ||||||||||||
Income before income taxes
|
4.5 | 3.0 | 2.9 | 3.3 | ||||||||||||
Income tax expense
|
1.6 | 0.8 | 1.0 | 1.0 | ||||||||||||
Net income
|
3.0 | 2.2 | 1.9 | 2.2 |
§
|
Lower bad debt expense due to adjustments in our accounts receivables reserves to reflect favorable collection trends;
|
§
|
Lower salary expense, due to realignments in our officer group; and
|
§
|
Lower depreciation and amortization expense primarily due to decreased information systems spending on our legacy systems in anticipation of our current Enterprise Resource Planning (ERP) project.
|
§
|
Higher sales commissions due to increased sales; and
|
§
|
Higher advertising supplies expense to support sales growth.
|
§
|
An increase of 3.5% due to non-taxable life insurance proceeds received in the second quarter of fiscal 2011;
|
§
|
An increase of 2.1% due to a large, one-time donation of appreciated property during fiscal 2011;
|
§
|
An increase of 1.7% due to the successful abatement of a prior-year tax penalty in fiscal 2011;
|
§
|
An increase of 0.8% in projected state income tax expense for fiscal 2012; and
|
§
|
A decrease of 0.8% due to the accrual of an anticipated distribution from our captive insurance arrangement in fiscal 2012.
|
§
|
Lower bad debt expense due to adjustments in our accounts receivable reserves to reflect favorable collection trends;
|
§
|
Lower salary related costs, due to:
|
o
|
an insurance gain of $610,000 on Company-owned life insurance due to the death of a former executive during the fiscal 2012 first quarter;
|
o
|
realignments in our officer group; and
|
o
|
reversal of the accrual for long term incentive bonuses during the first quarter of fiscal 2012; and
|
§
|
Lower depreciation and amortization expense primarily due to decreased information systems spending on our legacy systems in anticipation of our current ERP project.
|
§
|
An increase of 1.6% due to non-taxable life insurance proceeds received in fiscal 2011;
|
§
|
An increase of 0.8% due to the successful abatement of a prior year tax penalty in fiscal 2011;
|
§
|
A decrease of 0.8% due to the accrual of an anticipated distribution from the Company’s captive insurance arrangement in fiscal 2012; and
|
§
|
An increase of 0.4% in projected state income tax expense for fiscal 2012.
|
Thirteen Weeks Ended
|
Twenty-Six Weeks Ended
|
|||||||||||||||||||||||||||||||
July 31, 2011
|
August 1, 2010
|
July 31, 2011
|
August 1, 2010
|
|||||||||||||||||||||||||||||
Millions of
$
|
% of Division Net Sales
|
Millions of
$
|
% of Division Net Sales
|
Millions of
$
|
% of Division Net Sales
|
Millions of
$
|
% of Division Net Sales
|
|||||||||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||||||||||
Casegoods
|
36.5 | 34.5 | 76.2 | 67.1 | ||||||||||||||||||||||||||||
Upholstery
|
19.1 | 18.9 | 37.7 | 37.6 | ||||||||||||||||||||||||||||
Total
|
55.6 | 53.4 | 114.0 | 104.7 | ||||||||||||||||||||||||||||
Gross Profit
|
||||||||||||||||||||||||||||||||
Casegoods
|
9.0 | 24.7 | % | 9.3 | 27.1 | % | 17.6 | 23.1 | % | 18.7 | 27.9 | % | ||||||||||||||||||||
Upholstery
|
3.2 | 16.6 | % | 2.6 | 13.8 | % | 5.6 | 14.8 | % | 5.0 | 13.3 | % | ||||||||||||||||||||
Total
|
12.2 | 21.9 | % | 12.0 | 22.4 | % | 23.2 | 20.4 | % | 23.7 | 22.7 | % | ||||||||||||||||||||
Operating Income (loss)
|
||||||||||||||||||||||||||||||||
Casegoods
|
2.7 | 7.5 | % | 2.3 | 6.6 | % | 4.6 | 6.0 | % | 5.0 | 7.5 | % | ||||||||||||||||||||
Upholstery
|
(0.2 | ) | -1.3 | % | (0.7 | ) | -3.7 | % | (1.3 | ) | -3.5 | % | (1.7 | ) | -4.6 | % | ||||||||||||||||
Total
|
2.5 | 4.5 | % | 1.6 | 2.9 | % | 3.2 | 2.8 | % | 3.3 | 3.1 | % |
§
|
higher than typical levels of product discounting, primarily in the fiscal 2012 third quarter, as we continue to rationalize our product offerings and work to sell excess inventory;
|
§
|
higher prices for imported goods from Asia, primarily due to wage inflation in China and the strengthening Chinese currency; and
|
§
|
higher prices on many raw materials used in domestic manufacturing, including increased leather costs and increased prices for other commodities, such as cotton and steel.
|
§
|
controlling costs;
|
§
|
adjusting our product pricing on our main-line products in order to stabilize margins;
|
§
|
achieving proper inventory levels, while optimizing product availability on best-selling items;
|
§
|
pursuing additional distribution channels and offering an array of new products and designs, which we believe will help generate additional sales; and
|
§
|
upgrading and refining our information systems capabilities to support our business.
|
§
|
maintain a tangible net worth of at least $108.0 million;
|
§
|
limit capital expenditures to no more than $15.0 million during any fiscal year; and
|
§
|
maintain a ratio of funded debt to EBITDA not exceeding 2.0:1.0.
|
§
|
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, (ii) customers and suppliers and their ability to obtain financing or generate the cash necessary to conduct their respective businesses;
|
§
|
price competition in the furniture industry;
|
§
|
changes in domestic and international monetary policies and fluctuations in foreign currency exchange rates affecting the price of our imported products and raw materials;
|
§
|
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;
|
§
|
risks associated with the cost of imported goods, including fluctuation in the prices of purchased finished goods and transportation and warehousing costs;
|
§
|
supply, transportation and distribution disruptions, particularly those affecting imported products, including the availability of shipping containers and cargo ships;
|
§
|
adverse political acts or developments in, or affecting, the international markets from which we import products, including duties or tariffs imposed on those products;
|
§
|
risks associated with domestic manufacturing operations, including fluctuations in capacity utilization and the prices and availability of key raw materials as well as transportation, warehousing and domestic labor costs and environmental compliance and remediation costs;
|
§
|
our ability to successfully implement our business plan to increase sales and improve financial performance;
|
§
|
risks associated with distribution through third-party retailers, such as non-binding dealership arrangements;
|
§
|
capital requirements and costs;
|
§
|
competition from non-traditional outlets, such as catalogs and internet retailers and home improvement centers;
|
§
|
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;
|
§
|
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 products;
|
§
|
the direct and indirect costs associated with the implementation of our Enterprise Resource Planning system, including costs resulting from unanticipated disruptions to our business; and
|
§
|
achieving and managing growth and change, and the risks associated with acquisitions, restructurings, strategic alliances and international operations.
|
3.1
|
Amended and Restated Articles of Incorporation of the Company, as amended March 28, 2003 (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q (SEC File No. 000-25349) for the quarter ended February 28, 2003)
|
3.2
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-Q (SEC File No. 000-25349) for the quarter ended August 31, 2006)
|
4.1
|
Amended and Restated Articles of Incorporation of the Company (See Exhibit 3.1)
|
|
|
4.2
|
Amended and Restated Bylaws of the Company (See Exhibit 3.2)
|
10.1*+
|
Summary of Annual Base Salary and Cash Incentive Compensation for Named Executive Officers [(incorporated by reference to the Company’s Forms 8-K (SEC File No. 000-25349) filed with the SEC on April 25, 2011 and August 26, 2011)]
|
10.2*+
|
|
31.1*
|
|
31.2*
|
|
32.1*
|
|
101*#
|
The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2011, formatted in Extensible Business Reporting Language (“XBRL”): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of cash flows, and (iv) the notes to the condensed consolidated financial statements, tagged as blocks of text
|
____________
|
*Filed herewith
|
§
|
$20,000 retainer for service on the Board; plus
|
§
|
$5,000 for the independent lead director; plus
|
§
|
$8,500 for serving on the Audit Committee and $4,000 for serving on each of the Compensation and Nominating and Corporate Governance Committees; plus
|
§
|
an additional $5,000 for the Chair of the Audit Committee, $4,000 for the Chair of the Compensation Committee and $3,000 for the Chair of the Nominating and Corporate Governance Committee.
|
Non-Employee Director
|
Restricted Stock Grant
(# of shares)
|
|||
W. Christopher Beeler, Jr.
|
2,111 | |||
John L. Gregory, III
|
2,060 | |||
E. Larry Ryder
|
1,017 | |||
Mark F. Schreiber
|
1,857 | |||
David G. Sweet
|
2,009 | |||
Henry G. Williamson, Jr.
|
2,111 |
Date: September 7, 2011
|
By: /s/Paul B. Toms, Jr.
|
a.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
b.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $)
In Thousands |
Jul. 31, 2011
|
Jan. 30, 2011
|
---|---|---|
Allowance for doubtful accounts (in Dollars) | $ 1,828 | $ 2,082 |
Common stock, shares authorized | 20,000 | 20,000 |
Common stock, shares issued | 10,793 | 10,782 |
Common stock, shares oustanding | 10,793 | 10,782 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2011
|
Aug. 01, 2010
|
Jul. 31, 2011
|
Aug. 01, 2010
|
|
Net sales | $ 55,574 | $ 53,377 | $ 113,967 | $ 104,730 |
Cost of sales | 43,411 | 41,421 | 90,771 | 80,505 |
Casualty loss | Â | 183 | Â | 2,208 |
Insurance recovery | Â | (183) | Â | (1,708) |
Total cost of sales | 43,411 | 41,421 | 90,771 | 81,005 |
Gross profit | 12,163 | 11,956 | 23,196 | 23,725 |
Selling and administrative expenses | 9,669 | 10,387 | 19,955 | 20,450 |
Operating income | 2,494 | 1,569 | 3,241 | 3,275 |
Other income, net | 27 | 44 | 81 | 56 |
Income before income taxes | 2,521 | 1,613 | 3,322 | 3,331 |
Income tax expense | 875 | 435 | 1,153 | 1,079 |
Net income | $ 1,646 | $ 1,178 | $ 2,169 | $ 2,252 |
Earnings per share | Â | Â | Â | Â |
Basic (in Dollars per share) | $ 0.15 | $ 0.11 | $ 0.20 | $ 0.21 |
Diluted (in Dollars per share) | $ 0.15 | $ 0.11 | $ 0.20 | $ 0.21 |
Weighted average shares outstanding: | Â | Â | Â | Â |
Basic (in Shares) | 10,761 | 10,757 | 10,761 | 10,757 |
Diluted (in Shares) | 10,784 | 10,768 | 10,785 | 10,767 |
Cash dividends declared per share (in Dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
MD
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end
Document And Entity Information
|
6 Months Ended | |
---|---|---|
Jul. 31, 2011
|
Sep. 06, 2011
|
|
Document and Entity Information [Abstract] | Â | Â |
Entity Registrant Name | Hooker Furniture Corp | Â |
Document Type | 10-Q | Â |
Current Fiscal Year End Date | --01-31 | Â |
Entity Common Stock, Shares Outstanding | Â | 10,793,233 |
Amendment Flag | false | Â |
Entity Central Index Key | 0001077688 | Â |
Entity Current Reporting Status | Yes | Â |
Entity Voluntary Filers | No | Â |
Entity Filer Category | Accelerated Filer | Â |
Entity Well-known Seasoned Issuer | No | Â |
Document Period End Date | Jul. 31, 2011 | |
Document Fiscal Year Focus | 2012 | Â |
Document Fiscal Period Focus | Q2 | Â |
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7. Earnings Per Share
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] |
7.
Earnings Per
Share
Since
2006, we have issued restricted stock awards to non-employee
members of the board of directors under our stock incentive
plan and expect to continue to grant these awards to
non-employee board members. These awards vest if
the director remains on the board through a 36-month service
period and may vest earlier upon certain events specified in
the plan. As of July 31, 2011 and January 30, 2011 there were
31,795 shares and 20,630 shares, respectively, of unvested
restricted stock outstanding, net of forfeitures and vested
shares on each date. Restricted shares awarded
that have not yet vested are considered when computing
diluted earnings per share.
The
following table sets forth the computation of basic and
diluted earnings per share:
|
12. Subsequent Events
|
6 Months Ended |
---|---|
Jul. 31, 2011
|
|
Subsequent Events [Text Block] |
12.
Subsequent
Events
We
have evaluated events that occurred subsequent to July 31,
2011 through the issuance date of our condensed consolidated
financial statements as of that date and for the periods then
ended.
Dividends
At
its September 6, 2011 meeting, our board of directors
declared a quarterly cash dividend of $0.10 per share,
payable on November 25, 2011 to shareholders of record at
November 10, 2011.
Casualty
Loss
Over
the weekend of August 8, 2011, an automatic fire protection
sprinkler accidently operated and flooded a section of one of
our leased warehouse facilities in Martinsville, Va. Repair
and restoration efforts are essentially complete and
we estimate the costs associated with this loss
will approximate $250,000. We expect to record a casualty
loss for this amount during our fiscal 2012 third
quarter.
|
3. Property, Plant and Equipment
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2011
|
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Property, Plant and Equipment Disclosure [Text Block] |
3.
Property, Plant
and Equipment
|
9. Employee Benefit Plans
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2011
|
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Pension and Other Postretirement Benefits Disclosure [Text Block] |
9.
Employee Benefit
Plans
We
maintain a supplemental retirement income plan
(“SRIP”) for certain former and current
executives. The liability for the SRIP at July 31, 2011 and
January 30, 2011 was $7.0 million and $6.5 million,
respectively, and is shown in our condensed consolidated
balance sheets as follows:
Components of net periodic benefit cost for the SRIP are included in our condensed consolidated statements of operations under selling and administrative expenses:
|
10. Income Taxes
|
6 Months Ended | ||||||||||||||||||
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Jul. 31, 2011
|
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Income Tax Disclosure [Text Block] | 10.
Income
Taxes
We
recorded income tax expense of $875,000 for the fiscal 2012
second quarter compared to $435,000 for the prior year second
quarter. The effective tax rates for the fiscal
2012 and 2011 second quarters were 34.7% and 26.9%,
respectively. Our effective tax rate was
atypically low during the fiscal 2011 second quarter and
increased during the fiscal 2012 second quarter compared to
the prior-year period, primarily due to the following
percentage point changes in our effective tax rate:
We recorded income
tax expense of $1.2 million in the first half of fiscal 2012
compared to $1.1 million for the same period last
year. The effective income tax rates for the first
half of fiscal years 2012 and 2011 were 34.7% and 32.4%,
respectively. Our effective tax rate increased during the
fiscal 2012 first half compared to the prior-year period,
primarily due to the following percentage point
changes in our effective tax rate:
|
8. Long Term Debt
|
6 Months Ended |
---|---|
Jul. 31, 2011
|
|
Long-term Debt [Text Block] |
8.
Long Term
Debt
As
of July 31, 2011, we had an aggregate $13.1 million available
under our $15.0 million revolving credit facility to fund
working capital needs. Standby letters of credit
in the aggregate amount of $1.9 million, used to
collateralize certain insurance arrangements and for imported
product purchases, were outstanding under our revolving
credit facility as of July 31, 2011. There were no
additional borrowings outstanding under the revolving credit
facility on July 31, 2011. Any principal
outstanding under the revolving credit facility is due July
31, 2013.
|
1. Preparation of Interim Financial Statements
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jul. 31, 2011
|
|||||
Quarterly Financial Information [Text Block] |
1.
Preparation of
Interim Financial Statements
The
condensed consolidated financial statements of Hooker
Furniture Corporation and subsidiaries (referred to as
“we,” “us,” “our,”
“Hooker” or the “Company”) have been
prepared in accordance with the rules and regulations of the
Securities and Exchange Commission
(“SEC”). In the opinion of management,
these statements include all adjustments necessary for a fair
statement of the results of all interim periods reported
herein. All such adjustments are of a normal
recurring nature. Certain information and footnote
disclosures prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”) are
condensed or omitted pursuant to SEC rules and
regulations. However, we believe that the
disclosures made are adequate for a fair presentation of our
results of operations and financial
position. Operating results for the interim
periods reported herein may not be indicative of the results
expected for the fiscal year. These financial
statements should be read in conjunction with the audited
consolidated financial statements and accompanying notes
included in our annual report on Form 10-K for the fiscal
year ended January 30, 2011.
The
preparation of financial statements in conformity with GAAP
requires us to make estimates and assumptions that affect
both the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from our estimates.
The
financial statements contained herein are being filed as part
of a quarterly report on Form 10-Q covering the thirteen-week
period (also referred to as “three months,”
“three-month period,” “quarter,”
“second quarter” or “quarterly
period”) that began May 2, 2011 and twenty-six week
period (also referred to as “six months,”
“six-month period,” or “first half”)
that began on January 31, 2011, both ended on July 31,
2011. These financial statements also include the
thirteen-week period that began May 3, 2010 and the
twenty-six week period that began February 1, 2010, both
ended on August 1, 2010.
References
in these notes to the condensed consolidated financial
statements of the Company to:
|
4. Intangible Assets
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2011
|
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Intangible Assets Disclosure [Text Block] | 4.
Intangible
Assets
|
5. Accounts Receivable
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2011
|
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Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 5.
Accounts
Receivable
“Receivable
from factor” represents amounts due with respect to
factored accounts receivable. We factor substantially all of
our upholstery division accounts receivable without recourse
to us.
Under
our factoring agreement, invoices for upholstery products are
generated and transmitted to our customers, with copies to
the factor on a daily basis, as products are shipped to our
upholstery customers. The factor collects the
amounts due and remits collected funds, less factoring fees,
to us semi-weekly. We retain ownership of the accounts
receivable until the invoices are 90 days past due. At that
time, the factor pays us the net invoice amount, less
factoring fees, and takes ownership of the accounts
receivable. The factor is then entitled to collect the
invoices on its own behalf and retain any subsequent
remittances. The invoiced amounts are reported as accounts
receivable on our condensed consolidated balance sheets when
the merchandise is shipped to our customer until payment is
received from the factor.
A
limited number of our upholstery accounts receivable are
factored with recourse to us. The amounts of these
receivables at July 31, 2011 and January 30, 2011 were
$142,000 and $27,000, respectively. If the factor is unable
to collect the amounts due, invoices are returned to us for
collection. We include an estimate for these potentially
uncollectible receivables in our calculation of our allowance
for doubtful accounts.
|
6. Other Comprehensive Income
|
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Jul. 31, 2011
|
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Comprehensive Income (Loss) Note [Text Block] |
6.
Other
Comprehensive Income
|
2. Inventories
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Jul. 31, 2011
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Inventory Disclosure [Text Block] |
2. Inventories
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11. Accounting Pronouncements
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6 Months Ended |
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Jul. 31, 2011
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Description of New Accounting Pronouncements Not yet Adopted [Text Block] |
11. Accounting
Pronouncements
On
June 16, 2011 the Financial Accounting Standards Board issued
Accounting Standards Update (ASU) 2011-05: Comprehensive
Income (Topic 220): Presentation of Comprehensive
Income. This ASU will change the way we present
comprehensive income. We currently present comprehensive
income in the notes to our condensed consolidated financial
statements during interim periods (see Note 6, Other
Comprehensive Income, above) and as a component of the
statement of changes in shareholder’s equity in our
annual financial statements. This update eliminates the
option of presenting other comprehensive income in the
statement of changes in shareholder’s equity and
requires that an entity present the components of net income
and comprehensive income in either in a single continuous
statement of comprehensive income or in two separate but
consecutive financial statements. The provisions of ASU
2011-05 are to be applied retrospectively and are effective
for fiscal years beginning after December 15, 2011, including
both interim and annual periods thereafter. ASU 2011-05 is
effective for us beginning with our fiscal 2013 first quarter
ending April 29, 2012. This ASU will only affect
our financial statement presentation; consequently, there
will be no impact to our consolidated balances sheets or
consolidated statements of operations other than the way in
which we present comprehensive income. We are currently
evaluating the presentation options allowed under this
update.
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