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 | 10,746,106 |
(Class of common stock) | (Number of shares) |
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
3
|
|
Item 2.
|
12
|
|
Item 3.
|
25
|
|
Item 4.
|
25
|
|
PART II. OTHER INFORMATION
|
||
Item 2.
|
26
|
|
Item 6.
|
26
|
|
27
|
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 33,052 | $ | 40,355 | ||||
Accounts receivable, less allowance for doubtful accounts
of $1,482 and $1,632, respectively |
29,456 | 25,807 | ||||||
Inventories
|
38,854 | 34,136 | ||||||
Prepaid expenses and other current assets
|
4,593 | 4,194 | ||||||
Total current assets
|
105,955 | 104,492 | ||||||
Property, plant and equipment, net | 22,913 | 21,669 | ||||||
Intangible assets
|
1,257 | 1,257 | ||||||
Cash surrender value of life insurance policies | 17,495 | 16,217 | ||||||
Other assets
|
4,844 | 5,536 | ||||||
Total assets
|
$ | 152,464 | $ | 149,171 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current Liabilities
|
||||||||
Trade accounts payable | $ | 9,404 | $ | 9,233 | ||||
Accrued salaries, wages and benefits | 3,585 | 3,855 | ||||||
Other accrued expenses | 2,728 | 792 | ||||||
Accrued dividends | 1,075 | 1,078 | ||||||
Total current liabilities | 16,792 | 14,958 | ||||||
Deferred compensation | 7,425 | 7,100 | ||||||
Total liabilities | 24,217 | 22,058 | ||||||
Shareholders' equity
|
||||||||
Common stock, no par value, 20,000 shares authorized,
10,746 and 10,793 shares issued and oustanding on each date, respectively
|
17,305 | 17,262 | ||||||
Retained earnings
|
110,860 | 109,742 | ||||||
Accumulated other comprehensive income | 82 | 109 | ||||||
Total shareholders' equity | 128,247 | 127,113 | ||||||
Total liabilities and shareholders' equity | $ | 152,464 | $ | 149,171 |
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 28,
|
October 30,
|
October 28,
|
October 30,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net sales
|
$ | 56,803 | $ | 54,180 | $ | 158,718 | $ | 168,147 | ||||||||
Cost of sales
|
43,243 | 41,443 | 122,971 | 132,214 | ||||||||||||
Gross profit
|
13,560 | 12,737 | 35,747 | 35,933 | ||||||||||||
Selling and administrative expenses
|
9,781 | 10,031 | 28,118 | 29,986 | ||||||||||||
Operating income
|
3,779 | 2,706 | 7,629 | 5,947 | ||||||||||||
Other income, net
|
34 | 117 | 98 | 198 | ||||||||||||
Income before income taxes
|
3,813 | 2,823 | 7,727 | 6,145 | ||||||||||||
Income tax expense
|
1,379 | 563 | 2,799 | 1,716 | ||||||||||||
Net income
|
$ | 2,434 | $ | 2,260 | $ | 4,928 | $ | 4,429 | ||||||||
Earnings per share
|
||||||||||||||||
Basic
|
$ | 0.23 | $ | 0.21 | $ | 0.46 | $ | 0.41 | ||||||||
Diluted
|
$ | 0.23 | $ | 0.21 | $ | 0.46 | $ | 0.41 | ||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
10,723 | 10,762 | 10,755 | 10,762 | ||||||||||||
Diluted
|
10,742 | 10,783 | 10,787 | 10,788 | ||||||||||||
Cash dividends declared per share
|
$ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.30 |
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 28,
|
October 30,
|
October 28,
|
October 30,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net Income
|
$ | 2,434 | $ | 2,260 | $ | 4,928 | $ | 4,429 | ||||||||
Other comprehensive income:
|
||||||||||||||||
Amortization of actuarial gains
|
(14 | ) | (82 | ) | (43 | ) | (244 | ) | ||||||||
Income tax effect on amortization of actuarial gains
|
5 | 31 | 16 | 92 | ||||||||||||
Adjustments to net periodic benefit cost
|
(9 | ) | (51 | ) | (27 | ) | (152 | ) | ||||||||
Comprehensive Income
|
$ | 2,425 | $ | 2,209 | $ | 4,901 | $ | 4,277 |
Thirty-Nine Weeks Ended
|
||||||||
October 28,
|
October 30,
|
|||||||
2012
|
2011
|
|||||||
Cash flows from operating activities
|
||||||||
Cash received from customers
|
$ | 155,192 | $ | 169,581 | ||||
Cash paid to suppliers and employees
|
(153,368 | ) | (146,365 | ) | ||||
Income taxes (paid), net
|
(900 | ) | (1,079 | ) | ||||
Interest (paid)/received, net
|
(28 | ) | 17 | |||||
Net cash provided by operating activities
|
896 | 22,154 | ||||||
Cash flows from investing activities
|
||||||||
Purchase of property, plant and equipment
|
(3,850 | ) | (2,443 | ) | ||||
Proceeds received on notes issued for the sale of property, plant and equipment
|
24 | 26 | ||||||
Proceeds from the sale of property and equipment
|
403 | 125 | ||||||
Premiums paid on company-owned life insurance
|
(870 | ) | (1,112 | ) | ||||
Proceeds received on officers' life insurance
|
- | 560 | ||||||
Net cash used in investing activities
|
(4,293 | ) | (2,844 | ) | ||||
Cash flows from financing activities
|
||||||||
Cash dividends paid
|
(3,235 | ) | (3,235 | ) | ||||
Purchase and retirement of common stock
|
(671 | ) | - | |||||
Net cash used in financing activities
|
(3,906 | ) | (3,235 | ) | ||||
Net (decrease) / increase in cash and cash equivalents
|
$ | (7,303 | ) | $ | 16,075 | |||
Cash and cash equivalents at the beginning of the period
|
40,355 | 16,623 | ||||||
Cash and cash equivalents at the end of the period
|
$ | 33,052 | $ | 32,698 | ||||
Reconciliation of net income to net cash provided by operating activities:
|
||||||||
Net income
|
$ | 4,928 | $ | 4,429 | ||||
Depreciation and amortization
|
2,248 | 1,926 | ||||||
Non-cash restricted stock awards and performance grants
|
300 | (70 | ) | |||||
Provision for doubtful accounts
|
(87 | ) | 170 | |||||
Deferred income taxes
|
260 | 16 | ||||||
(Gain) / loss on disposal of property
|
(45 | ) | 108 | |||||
(Gain) on insurance policies
|
(545 | ) | (461 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Trade accounts receivable
|
(3,562 | ) | 1,096 | |||||
Inventories
|
(4,718 | ) | 14,501 | |||||
Prepaid expenses and other current assets
|
160 | 264 | ||||||
Trade accounts payable
|
171 | (632 | ) | |||||
Accrued salaries, wages, and benefits
|
(270 | ) | (41 | ) | ||||
Accrued income taxes
|
1,636 | 621 | ||||||
Other accrued expenses
|
303 | (164 | ) | |||||
Deferred compensation
|
117 | 391 | ||||||
Net cash provided by operating activties
|
$ | 896 | $ | 22,154 |
§
|
the 2013 fiscal year and comparable terminology mean the fiscal year that began January 30, 2012 and will end February 3, 2013; and
|
§
|
the 2012 fiscal year and comparable terminology mean the fiscal year that began January 31, 2011 and ended January 29, 2012.
|
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Finished furniture
|
$ | 49,106 | $ | 42,656 | ||||
Furniture in process
|
688 | 580 | ||||||
Materials and supplies
|
8,584 | 7,942 | ||||||
Inventories at FIFO
|
58,378 | 51,178 | ||||||
Reduction to LIFO basis
|
(19,524 | ) | (17,042 | ) | ||||
Inventories
|
$ | 38,854 | $ | 34,136 |
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Computer software and hardware
|
$ | 27,892 | $ | 26,347 | ||||
Buildings and land improvements
|
23,680 | 24,501 | ||||||
Machinery and equipment
|
3,650 | 3,708 | ||||||
Leasehold improvements
|
2,675 | 777 | ||||||
Furniture and fixtures
|
1,974 | 1,653 | ||||||
Other
|
702 | 763 | ||||||
Total depreciable property at cost
|
60,573 | 57,749 | ||||||
Less accumulated depreciation
|
40,091 | 41,117 | ||||||
Total depreciable property, net
|
20,482 | 16,632 | ||||||
Land
|
1,152 | 1,357 | ||||||
Construction in progress
|
1,279 | 3,680 | ||||||
Property, plant and equipment, net
|
$ | 22,913 | $ | 21,669 |
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Non-amortizable Intangible Assets
|
||||||||
Trademarks and trade names - Bradington-Young
|
$ | 861 | $ | 861 | ||||
Trademarks and trade names - Sam Moore
|
396 | 396 | ||||||
Total trademarks and tradenames
|
$ | 1,257 | $ | 1,257 |
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Trade accounts receivable
|
$ | 23,748 | $ | 21,261 | ||||
Receivable from factor
|
7,190 | 6,178 | ||||||
Allowance for doubtful accounts
|
(1,482 | ) | (1,632 | ) | ||||
Accounts receivable
|
$ | 29,456 | $ | 25,807 |
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
|||||||||||||||
October 28,
|
October 30,
|
October 28,
|
October 30,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income
|
$ | 2,434 | $ | 2,260 | $ | 4,928 | $ | 4,429 | ||||||||
Less: Unvested participating restricted stock dividends
|
3 | 3 | 3 | 3 | ||||||||||||
Net earnings allocated to unvested participating restricted stock
|
- | - | - | - | ||||||||||||
Earnings available for common shareholders
|
2,431 | 2,257 | 4,925 | 4,426 | ||||||||||||
Weighted average shares outstanding for basic earnings per share
|
10,723 | 10,762 | 10,755 | 10,762 | ||||||||||||
Dilutive effect of unvested restricted stock and RSU awards
|
19 | 21 | 32 | 26 | ||||||||||||
Weighted average shares outstanding for diluted earnings per share
|
10,742 | 10,783 | 10,787 | 10,788 | ||||||||||||
Basic earnings per share
|
$ | 0.23 | $ | 0.21 | $ | 0.46 | $ | 0.41 | ||||||||
Diluted earnings per share
|
$ | 0.23 | $ | 0.21 | $ | 0.46 | $ | 0.41 |
October 28,
|
January 29,
|
|||||||
2012
|
2012
|
|||||||
Accrued salaries, wages and benefits (current portion)
|
$ | 469 | $ | 469 | ||||
Deferred compensation (long-term portion)
|
7,261 | 7,100 | ||||||
Total liability
|
$ | 7,730 | $ | 7,569 |
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 28,
|
October 30,
|
October 28,
|
October 30,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 64 | $ | 131 | $ | 191 | $ | 393 | ||||||||
Interest cost
|
74 | 84 | 223 | 252 | ||||||||||||
Actuarial gain
|
(15 | ) | (81 | ) | (44 | ) | (243 | ) | ||||||||
Net periodic benefit cost
|
$ | 123 | $ | 134 | $ | 370 | $ | 402 |
§
|
the receipt of the non-taxable proceeds from Company-owned life insurance;
|
§
|
a higher level of donations of discontinued inventory items than in the fiscal 2013 third quarter;
|
§
|
the receipt of a non-taxable distribution from our former captive insurance arrangement that did not recur in the fiscal 2013 third quarter; and
|
§
|
a refund of a previously paid IRS penalty.
|
§
|
a lower permanent benefit from officers’ life insurance policies;
|
§
|
a change in our federal deferred tax rate from 35.0% to 34.0%, based on forecasted net income for the periods in which the deferred taxes will be payable;
|
§
|
lower deductions for contributions of discontinued inventory; and
|
§
|
the receipt of a non-taxable distribution from our former captive insurance arrangement in the first nine months of fiscal 2012 that did not recur in the first nine months of fiscal 2013.
|
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
October 28, 2012
|
October 30, 2011
|
|||||||||||||||||||||||||||||
% Net
Sales |
% Net
Sales
|
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||||||||
Net Sales
|
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 36,508 | 64.3 | % | $ | 35,476 | 65.5 | % | $ | 101,447 | 63.9 | % | $ | 111,704 | 66.4 | % | ||||||||||||||||
Upholstery
|
20,295 | 35.7 | % | 18,704 | 34.5 | % | 57,271 | 36.1 | % | 56,443 | 33.6 | % | ||||||||||||||||||||
Consolidated
|
$ | 56,803 | 100.0 | % | $ | 54,180 | 100.0 | % | $ | 158,718 | 100.0 | % | $ | 168,147 | 100.0 | % | ||||||||||||||||
Gross Income &
Margin |
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 9,580 | 26.2 | % | $ | 10,011 | 28.2 | % | $ | 25,154 | 24.8 | % | $ | 27,643 | 24.8 | % | ||||||||||||||||
Upholstery
|
3,980 | 19.6 | % | 2,726 | 14.6 | % | 10,593 | 18.5 | % | 8,290 | 14.7 | % | ||||||||||||||||||||
Consolidated
|
$ | 13,560 | 23.9 | % | $ | 12,737 | 23.5 | % | $ | 35,747 | 22.5 | % | $ | 35,933 | 21.4 | % | ||||||||||||||||
Operating Income
|
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 3,212 | 8.8 | % | $ | 3,460 | 9.8 | % | $ | 6,960 | 6.9 | % | $ | 8,015 | 7.2 | % | ||||||||||||||||
Upholstery
|
567 | 2.8 | % | (754 | ) | -4.0 | % | 669 | 1.2 | % | (2,068 | ) | -3.7 | % | ||||||||||||||||||
Consolidated
|
$ | 3,779 | 6.7 | % | $ | 2,706 | 5.0 | % | $ | 7,629 | 4.8 | % | $ | 5,947 | 3.5 | % | ||||||||||||||||
Depreciation &
Amortization |
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 538 | $ | 433 | $ | 1,421 | $ | 1,282 | ||||||||||||||||||||||||
Upholstery
|
235 | 238 | 827 | 644 | ||||||||||||||||||||||||||||
Consolidated
|
$ | 773 | $ | 671 | $ | 2,248 | $ | 1,926 | ||||||||||||||||||||||||
Capital Expenditures
|
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 617 | $ | 388 | $ | 2,382 | $ | 1,767 | ||||||||||||||||||||||||
Upholstery
|
298 | 184 | 1,468 | 676 | ||||||||||||||||||||||||||||
Consolidated
|
$ | 915 | $ | 572 | $ | 3,850 | $ | 2,443 |
As of
October 28, 2012
|
As of
January 29, 2012
|
|||||||||||||||||||||||||||||||
Total Assets
|
||||||||||||||||||||||||||||||||
Casegoods
|
$ | 120,165 | $ | 119,645 | ||||||||||||||||||||||||||||
Upholstery
|
32,299 | 29,526 | ||||||||||||||||||||||||||||||
Consolidated
|
$ | 152,464 | $ | 149,171 |
§
|
the 2013 fiscal year and comparable terminology mean the fiscal year that began January 30, 2012 and will end February 3, 2013; and
|
§
|
the 2012 fiscal year and comparable terminology mean the fiscal year that began January 31, 2011 and ended January 29, 2012.
|
§
|
consumer confidence;
|
§
|
fashion trends;
|
§
|
availability of consumer credit;
|
§
|
energy and other commodity prices; and
|
§
|
housing and mortgage markets;
|
§
|
disposable income;
|
§
|
housing; and
|
§
|
family size.
|
§
|
Out-of-stock positions on several key imported items, groups and collections negatively impacted sales and profitability, but to a lesser extent during the fiscal 2013 third quarter;
|
§
|
The sourcing transition from some of our vendors in China to vendors in other Asian countries resulted in longer lead times, and shipping delays negatively impacted sales and profitability, but to a lesser extent during the fiscal 2013 third quarter;
|
§
|
Decreased product discounting negatively impacted sales and unit volume in both the casegoods and upholstery segments, but drove gross margin improvement. Product discounting was higher in the comparable prior-year periods in order to reduce excess and slow-moving inventory;
|
§
|
Selling and administrative expenses decreased in absolute terms in both the fiscal 2013 third quarter and first nine months due to a variety of factors, including lower net sales in the nine-month period. As a percentage of net sales, selling and administrative expenses decreased in the fiscal 2013 third quarter primarily due to higher net sales, while remaining essentially flat for the 2013 nine-month period; and
|
§
|
Our upholstery segment first returned to operating profitability in the fiscal 2013 first quarter after reporting operating losses since the fiscal 2009 second quarter. After reporting a small loss in the fiscal 2013 second quarter, the upholstery segment reported operating profits of $567,000 and $669,000, respectively, for the three and nine-month periods just ended.
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
|||||||||||||||
October 28,
|
October 30,
|
October 28,
|
October 30,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of sales
|
76.1 | 76.5 | 77.5 | 78.6 | ||||||||||||
Gross profit
|
23.9 | 23.5 | 22.5 | 21.4 | ||||||||||||
Selling and administrative expenses
|
17.2 | 18.5 | 17.7 | 17.8 | ||||||||||||
Operating income
|
6.7 | 5.0 | 4.8 | 3.5 | ||||||||||||
Other income, net
|
0.1 | 0.2 | 0.1 | 0.1 | ||||||||||||
Income before income taxes
|
6.7 | 5.2 | 4.9 | 3.7 | ||||||||||||
Income tax expense
|
2.4 | 1.0 | 1.8 | 1.0 | ||||||||||||
Net income
|
4.3 | 4.2 | 3.1 | 2.6 |
Thirteen Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 36,508 | 64.3 | % | $ | 35,476 | 65.5 | % | $ | 1,032 | 2.9 | % | ||||||||||||
Upholstery
|
20,295 | 35.7 | % | 18,704 | 34.5 | % | $ | 1,591 | 8.5 | % | ||||||||||||||
Consolidated
|
$ | 56,803 | 100.0 | % | $ | 54,180 | 100.0 | % | $ | 2,623 | 4.8 | % |
Unit Volume
|
FY13 Q3 %
Increase vs. FY12 Q3
|
Average Selling Price
|
FY13 Q3 %
Increase vs. FY12 Q3
|
|||||||
Casegoods
|
-10.2 | % |
Casegoods
|
13.9 | % | |||||
Upholstery
|
1.2 | % |
Upholstery
|
6.7 | % | |||||
Consolidated
|
-7.1 | % |
Consolidated
|
12.3 | % |
Thirteen Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 9,580 | 26.2 | % | $ | 10,011 | 28.2 | % | $ | (431 | ) | -4.3 | % | |||||||||||
Upholstery
|
3,980 | 19.6 | % | 2,726 | 14.6 | % | 1,254 | 46.0 | % | |||||||||||||||
Consolidated
|
$ | 13,560 | 23.9 | % | $ | 12,737 | 23.5 | % | $ | 823 | 6.5 | % |
Thirteen Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 6,369 | 17.4 | % | $ | 6,551 | 18.5 | % | $ | (182 | ) | -2.8 | % | |||||||||||
Upholstery
|
3,412 | 16.8 | % | 3,480 | 18.6 | % | (68 | ) | -2.0 | % | ||||||||||||||
Consolidated
|
$ | 9,781 | 17.2 | % | $ | 10,031 | 18.5 | % | $ | (250 | ) | -2.5 | % |
§
|
lower contribution expense due to lower levels of distressed inventory;
|
§
|
increased amounts billed to our imported upholstery division compared to the prior periods for its share of administrative costs; and
|
§
|
decreased bad debt expense due to favorable collections experience.
|
§
|
bonus expense, due to the accrual of annual profit sharing bonuses and the payment of project-related performance bonuses for our Enterprise Resource Planning (ERP) implementation;
|
§
|
salary expense primarily due to the promotion of an upholstery executive to a casegoods position during the fiscal 2012 third quarter and also due to other salary increases; and
|
§
|
advertising expense due to additional advertising and marketing initiatives aimed at increasing sales.
|
§
|
salary expense due to the previously mentioned executive promotion of an officer from our upholstery segment to a casegoods management position and due to cost reduction efforts undertaken in fiscal 2012;
|
§
|
depreciation expense due to accelerated depreciation expense recorded in fiscal 2012 in conjunction with our move to a new showroom; and
|
§
|
benefits expense due to decreased headcount and lower health claims.
|
§
|
the upholstery segment’s share of Company-wide administrative costs; and
|
§
|
advertising expense due to increased swatch and catalog expense.
|
Thirteen Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 3,212 | 8.8 | % | $ | 3,460 | 9.8 | % | $ | (248 | ) | -7.2 | % | |||||||||||
Upholstery
|
567 | 2.8 | % | (754 | ) | -4.0 | % | 1,321 | 175.2 | % | ||||||||||||||
Consolidated
|
$ | 3,779 | 6.7 | % | $ | 2,706 | 5.0 | % | $ | 1,073 | 39.7 | % |
Thirteen Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Consolidated income tax expense
|
$ | 1,379 | 2.4 | % | $ | 563 | 1.0 | % | $ | 816 | 144.9 | % | ||||||||||||
Effective Tax Rate
|
36.2 | % | 20.0 | % |
§
|
the receipt of the non-taxable proceeds from Company-owned life insurance;
|
§
|
a higher level of donations of discontinued inventory items than in the fiscal 2013 third quarter;
|
§
|
the receipt of a non-taxable distribution from our former captive insurance arrangement that did not recur in the fiscal 2013 third quarter; and
|
§
|
a refund of a previously paid IRS penalty.
|
Thirteen Weeks ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
Net Income
|
% Net
Sales
|
% Net
Sales
|
||||||||||||||||||||||
Consolidated
|
$ | 2,434 | 4.3 | % | $ | 2,259 | 4.2 | % | $ | 175 | 7.7 | % | ||||||||||||
Earnings per share
|
$ | 0.23 | $ | 0.21 |
Thirty-Nine Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 101,447 | 63.9 | % | $ | 111,704 | 66.4 | % | $ | (10,257 | ) | -9.2 | % | |||||||||||
Upholstery
|
57,271 | 36.1 | % | 56,443 | 33.6 | % | $ | 828 | 1.5 | % | ||||||||||||||
Consolidated
|
$ | 158,718 | 100.0 | % | $ | 168,147 | 100.0 | % | $ | (9,429 | ) | -5.6 | % |
Unit Volume
|
FY13 YTD %
Increase vs. FY12 YTD
|
Average Selling Price
|
FY13 YTD%
Increase vs. FY12 YTD
|
|||||||
Casegoods
|
-22.2 | % |
Casegoods
|
15.9 | % | |||||
Upholstery
|
-6.6 | % |
Upholstery
|
8.2 | % | |||||
Consolidated
|
-18.2 | % |
Consolidated
|
14.6 | % |
Thirty-Nine Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 25,154 | 24.8 | % | $ | 27,643 | 24.8 | % | $ | (2,489 | ) | -9.0 | % | |||||||||||
Upholstery
|
10,593 | 18.5 | % | 8,290 | 14.7 | % | 2,303 | 27.8 | % | |||||||||||||||
Consolidated
|
$ | 35,747 | 22.5 | % | $ | 35,933 | 21.4 | % | $ | (186 | ) | -0.5 | % |
Thirty-Nine Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 18,194 | 17.9 | % | $ | 19,628 | 17.6 | % | $ | (1,434 | ) | -7.3 | % | |||||||||||
Upholstery
|
9,924 | 17.3 | % | 10,358 | 18.4 | % | (434 | ) | -4.2 | % | ||||||||||||||
Consolidated
|
$ | 28,118 | 17.7 | % | $ | 29,986 | 17.8 | % | $ | (1,868 | ) | -6.2 | % |
§
|
increased amounts billed to our imported upholstery division compared to prior periods for its share of administrative costs;
|
§
|
lower contribution expense due to lower levels of distressed inventory;
|
§
|
lower sales and design commissions due to lower net sales; and
|
§
|
reduced advertising and sample expenses due to cost cutting measures.
|
§
|
salary expense primarily due to the executive promotion mentioned previously and other salary increases;
|
§
|
benefits expense, due primarily to an insurance gain on Company-owned life insurance in the prior-year period, due to the death of a former executive, which reduced benefits expense for that period;
|
§
|
bonus expense, due to the reversal of an accrual for officers’ long-term performance grant awards in the comparable prior-year period; and
|
§
|
professional services, due to additional fees for several corporate initiatives.
|
§
|
salary expense, due to the executive promotion mentioned above and cost reduction efforts undertaken in fiscal 2012;
|
§
|
benefits expense due to decreased headcount and lower health claims; and
|
§
|
sample and advertising expenses, due to cost-cutting measures.
|
Thirty-Nine Weeks Ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 6,960 | 6.9 | % | $ | 8,015 | 7.2 | % | $ | (1,055 | ) | -13.2 | % | |||||||||||
Upholstery
|
669 | 1.2 | % | (2,068 | ) | -3.7 | % | 2,737 | 132.3 | % | ||||||||||||||
Consolidated
|
$ | 7,629 | 4.8 | % | $ | 5,947 | 3.5 | % | $ | 1,682 | 28.3 | % |
Thirty-Nine Weeks ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Consolidated income tax expense
|
$ | 2,799 | 1.8 | % | $ | 1,716 | 1.0 | % | $ | 1,083 | 63.1 | % | ||||||||||||
Effective Tax Rate
|
36.2 | % | 27.9 | % |
§
|
a lower permanent benefit from officers’ life insurance policies;
|
§
|
a change in our federal deferred tax rate from 35.0% to 34.0%, based on forecasted net income for the periods in which the deferred taxes will be payable;
|
§
|
lower deductions for contributions of discontinued inventory; and
|
§
|
the receipt of a non-taxable distribution from our former captive insurance arrangement in the first nine months of fiscal 2012 that did not recur in the first nine months of fiscal 2013.
|
Thirty-Nine Weeks ended
|
||||||||||||||||||||||||
October 28, 2012
|
October 30, 2011
|
$ Change
|
% Change
|
|||||||||||||||||||||
Net Income
|
% Net
Sales
|
% Net
Sales
|
||||||||||||||||||||||
Consolidated
|
$ | 4,928 | 3.1 | % | $ | 4,429 | 2.6 | % | $ | 499 | 11.3 | % | ||||||||||||
Earnings per share
|
$ | 0.46 | $ | 0.41 |
§
|
pursuing additional distribution channels;
|
§
|
controlling costs;
|
§
|
adjusting our product pricing on our main-line products in order to improve margins;
|
§
|
achieving proper inventory levels, while optimizing product availability on best-selling items;
|
§
|
sourcing product from more competitive locales and from more quality conscious sourcing partners;
|
§
|
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.
|
Balance Sheet and Working Capital
|
||||||||||||
October 28, 2012
|
January 29, 2012
|
$ Change
|
||||||||||
Total Assets
|
$ | 152,464 | $ | 149,171 | $ | 3,293 | ||||||
Cash
|
$ | 33,052 | $ | 40,355 | $ | (7,303 | ) | |||||
Trade Receivables
|
29,456 | 25,807 | 3,649 | |||||||||
Inventories
|
38,854 | 34,136 | 4,718 | |||||||||
Prepaid Expenses & Other
|
4,593 | 4,194 | 399 | |||||||||
Total Current Assets
|
$ | 105,955 | $ | 104,492 | $ | 1,463 | ||||||
Trade accounts payable
|
$ | 9,404 | $ | 9,233 | $ | 171 | ||||||
Accrued salaries, wages and benefits
|
3,585 | 3,855 | (270 | ) | ||||||||
Other accrued expenses
|
3,803 | 1,870 | 1,933 | |||||||||
Total current liabilities
|
$ | 16,792 | $ | 14,958 | $ | 1,834 | ||||||
Net working capital
|
$ | 89,163 | $ | 89,534 | $ | (371 | ) | |||||
Working capital ratio
|
6.3 to 1
|
7.0 to 1
|
§
|
inventory, due to re-stocking efforts;
|
§
|
trade accounts receivable due to increased sales; and
|
§
|
property, plant and equipment, due to the remodeling of our showroom which debuted at the spring 2012 International Home Furnishings Market and continued investment in our ERP system.
|
2012
|
2011
|
|||||||
Net cash provided by operating activities
|
$ | 896 | $ | 22,154 | ||||
Net cash used in investing activities
|
(4,293 | ) | (2,844 | ) | ||||
Net cash used in financing activities
|
(3,906 | ) | (3,235 | ) | ||||
Net decrease in cash and cash equivalents
|
$ | (7,303 | ) | $ | 16,075 |
§
|
maintain a tangible net worth of at least $95.0 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 or (ii) customers and suppliers and their ability to obtain financing or generate the cash necessary to conduct their respective businesses;
|
§
|
supply, transportation and distribution disruptions, particularly those affecting imported products, including the availability of shipping containers and cargo ships;
|
§
|
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;
|
§
|
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;
|
§
|
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 changes in 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;
|
§
|
the direct and indirect costs associated with the implementation of our Enterprise Resource Planning system, including costs resulting from unanticipated disruptions to our business;
|
§
|
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 catalog 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 or non-compliant products; and
|
§
|
achieving and managing growth and change, and the risks associated with acquisitions, restructurings, strategic alliances and international operations.
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased As Part of Publicly Announced Program
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under The Program
|
|||||||||||||
$ | 12,239,583 | |||||||||||||||
July 30, 2012 - September 2, 2012
|
30,000 | $ | 11.64 | 30,000 | 11,890,457 | |||||||||||
September 3, 2012 - September 30, 2012
|
5,300 | 11.62 | 35,300 | 11,828,888 | ||||||||||||
October 1, 2012 - October 28, 2012
|
- | - | - | 11,828,888 | ||||||||||||
Total
|
35,300 | $ | 11.63 | 35,300 |
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, as amended (See Exhibit 3.1)
|
|
4.2
|
Amended and Restated Bylaws of the Company (See Exhibit 3.2)
|
|
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 October 28, 2012, formatted in Extensible Business Reporting Language (“XBRL”): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income (iv) condensed consolidated statements of cash flows, and (v) the notes to the condensed consolidated financial statements, tagged as blocks of text.
|
Date: December 5, 2012
|
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.
|
10. Segment Information (Detail) - Schedule of Segment Reporting Information (USD $)
In Thousands, unless otherwise specified |
Oct. 28, 2012
|
Jan. 29, 2012
|
---|---|---|
Total Assets | ||
Total assets | $ 152,464 | $ 149,171 |
Casegoods [Member]
|
||
Total Assets | ||
Total assets | 120,165 | 119,645 |
Upholstery [Member]
|
||
Total Assets | ||
Total assets | $ 32,299 | $ 29,526 |
B"'KFM!HX8?ULUY87D9K:Z_!-:`6W?*^F";[*
MXK'7;XA/JI=I7=Z:119LP+\Z>7?Z]?B?H#&"ZS8]1PFZ'6:`B9N\M&"K_>EH
MI2VE!>^U]:P[U6;.6T\J^JI`I:VB5/0IXS1);6V^4DO1W9!E5<]$5\O]C&<)
MZID1]S8@UM>F0VY:SU"YDIDCWH1Y57#U]*Y>B_D-"DSL(OO4]%SH8_B0U<-9
MR%I#\!TZY-Y$%YK:[V8=LII?OEUKAK$R/P\@YAMC3#W#6D<:4X(]X)">^#
M<>@DW<+5Z+Z$$K+-YZ`ZC`MRIRS Y)BN^\*'+%?S
M'[?N7?3,1$=)'JWXT_CQ"AI,)T\^VX8L>`E:;L_C>*#
M\0.$C+=?FX87XN%W]OV-.4Z!SG/"PE$GZD!5'ORS9R^JEZPN)[ZWLU[B>$^:
M^10P-N;=L,5/]L5W+'[HV<.UU+LON/.S/XB[ UE?^!88'C@*TLL:DWY#.&PI!;)3%:?1[$\3)4BU6
M@9`*;M0&+P0G[[0!#!F"@S@9X#GD!@8\!P6$P'/`>I9/62L"%064',6HKUCX
(;=LK
MY>K`Q$D#AC`X*L0E,%'BW9E/I-)F3%H\PP(4R`5#YERT(K^U(
M`+M<(2<=EBH']3$0.J"J@)PB-3D*806DBCD,_/O?QJU17MB`3CL9YL4OBF"8
MIQQ.`,RV(AC4$7.(N;HG&QCF=_[#_'ZKCS090IC?$P`UK(#B40@K(%7,8>#'
M_!Z`V1`/@-E6!(,Z8JX2\;`F`AP#QVB)!(ZI%'/(4U*9KM3;*O$LIH8N=^+S
M_2W]IFC:!Q9M=ORBD[FMZ=R)K^F3Z;)0T%9,.F7"I'1#">P;!9&:'(6P;U+%
M7(/-6F6W\6]9=FS;CVAPE-M14.7!!;ZJ2*@MPVW#:,&,T84>AH%M16"]$'.(
MN;JGA#!C.__5E"^"/9,UX5?(Q,'"U=HED$^#J:,B4I.C$*9.JIB#A4,^[<3R
M(9^&8>!@Z,T^+F5UW[Y[UA<8.6K=>SZ]5Y_2:,?\RVI/VD*"JH.MP&V5.C`.
M=0.-(4-E6"UH@F23Z;"`6+7EI&E'%9()=?3;LFXGZ$JDWX*N-&0"74%7T+5I
M_19TI2$3Z`JZ@JY-Z[>@*PV90%?0]=C;631/O]'.!]/Z\RGPIYY]SGN!'[S6
M_NOZ^NW;=^]^R+_7!R;U-[8),Q:[A.617XT\O[!;"WZZ-D/VY/NV,*U?>6)_
M7:]D"\B];KE>\([+#Y$J=R&M7[/O3K3&9/\=22D.4YU^J]<>UNZM2MC^MGXM
MJXE64`U4JU>G6[UYT!'J!;'N_EU#F`"$ET>J;:\O"KSP+IC*EU@Q7K]4=
M],L5J,EWGN/?C`V(\?WWKS,/[QGWZ(W\2K.
MR^3@/RZ/8KHLO&-?F#=E'UBD33V''^CQI[-I:)]I%K\T_L7D%Y8Q^.,=EZ;3
M_F7J&FW=N/>-X:T5Q3_^L=B$^S
\`6_`
M&_`&O`%OJ*@V^URV>E^EU#K$`K/%3ZN=B0L\MZ&WQ*R4WJ#>"I>-J\W>6^H'
M+7=855M3X5"[CZ;"H;A^53M&RQB-)!N;"Q7HK%U:@A`H(INT3J>*R46C2\%6
M,ML@$YL-F(,HHF5S32*%L)76#5(03V+;MSJI,6KUC+[(A`!^DO1#N#FX.;@Y
MN#D)M`30`#0`#4!KC)8`&H`&H`%HC=$20`/0`#0`K3%:`F@`&H`&H,FNY>QS
M`K7[,A'9Q?++G4YP[7O)PS\S8G:AU3Z2+;(L>L\57U\E?#+,M=-L?_K@L@+/
MU6M7E48IP+V$3'G&7KN4>L]H=?M=^1^\(_I+@Z:TWJ2*N80@9E71Y]"I0TVA
MV,BI0R.U;*X9I!"V$KN^;(L'CU>D]F%WU-('NM!P`'TRAS"L&ZP;K-L!DH%?
M),(3_`*_P*\#)`._2(0G^`5^@5\'2`9^D0A/\`O\`K\.D`S\(A&>X!?X!7X=
M(!GX=;26L\_%JQYGGYD/+HL__O'5-#Q_,LW)ZT_6,[.G+KM]_,2>QLR+[MC$
M#R+'>WKO/?K!V(P
^]RGBU[4Z#`L^Q9HOCK$QB/(/DQL2GAUY*6N#
M*Q_MXCZRNJ(BK4J_#6LRW/MOV$?3J>HN&,/=NY!_]LO\WG/[>)?T\HK:K0^R
M>T_*Z6>]Y\=7WQX"=_;S_P]02P,$%`````@`.'.%04SJ/*9$#@``Q*X``!4`
M'`!H;V9T+3(P,3(Q,#(X7V-A;"YX;6Q55`D``[N?OU"[G[]0=7@+``$$)0X`
M``0Y`0``[5U;<^(X%G[?JOT/;.9EM[88R#VDNKN*A"2=;I*P))F>2TU-&5L$
M=1N+EFPN^?4KR39@D'R5,*1G7H8F1M_Q^70NNAV]^U>U6KD!#L"&"ZQ*;U:!
ME_]VA_^I5"N7:#AZ-&'EUG'I7TT7C@']SAD#3/]-_SYPW=%YK3:93'XVZ:/$
MA!@0Y&$3$/9%I5K]4&'__?,?[QC()08,XKSRA>*T@%FI'U?V&^?U@_/#L\KS
MTV7EH+Y_X/^(_L*&SK>>04!E.K0=\GYO"6S:P_;/"+_4#NKUPUKXX)[_Y/F4
M?1%Y?G+(G]YO-!HU_M?YHP2*'J3-[M=^O6L_F@,P-*K0(:[AF`R`P'/"OVPC
MTW`A