Virginia
|
54-0251350
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
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
|
10,739,230
|
(Class of common stock)
|
(Number of shares)
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PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
3
|
|
Item 2.
|
12
|
|
Item 3.
|
22
|
|
Item 4.
|
23
|
|
PART II. OTHER INFORMATION
|
||
Item 6.
|
24
|
|
25
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May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 28,728 | $ | 26,342 | ||||
Accounts receivable, less allowance for doubtful accounts of
$1,085 and $1,249, respectively
|
26,435 | 28,272 | ||||||
Inventories
|
46,506 | 49,872 | ||||||
Prepaid expenses and other current assets
|
2,652 | 3,569 | ||||||
Deferred taxes
|
1,572 | 1,612 | ||||||
Total current assets
|
105,893 | 109,667 | ||||||
Property, plant and equipment, net
|
23,125 | 22,829 | ||||||
Intangible assets
|
1,257 | 1,257 | ||||||
Cash surrender value of life insurance policies
|
17,720 | 17,360 | ||||||
Deferred taxes
|
4,434 | 4,379 | ||||||
Other assets
|
331 | 331 | ||||||
Total assets
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$ | 152,760 | $ | 155,823 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current Liabilities
|
||||||||
Trade accounts payable
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$ | 9,224 | $ | 11,620 | ||||
Accrued salaries, wages and benefits
|
2,604 | 3,316 | ||||||
Other accrued expenses
|
1,241 | 2,531 | ||||||
Total current liabilities
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13,069 | 17,467 | ||||||
Deferred compensation
|
7,557 | 7,311 | ||||||
Total liabilities
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20,626 | 24,778 | ||||||
Shareholders' equity
|
||||||||
Common stock, no par value, 20,000 shares authorized,
10,746 shares issued and outstanding on each date, respectively
|
17,407 | 17,360 | ||||||
Retained earnings
|
114,542 | 113,483 | ||||||
Accumulated other comprehensive income
|
185 | 202 | ||||||
Total shareholders' equity
|
132,134 | 131,045 | ||||||
Total liabilities and shareholders' equity
|
$ | 152,760 | $ | 155,823 |
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net sales
|
$ | 56,295 | $ | 51,730 | ||||
Cost of sales
|
42,379 | 40,808 | ||||||
Gross profit
|
13,916 | 10,922 | ||||||
Selling and administrative expenses
|
10,682 | 9,394 | ||||||
Operating income
|
3,234 | 1,528 | ||||||
Other (expense) income, net
|
(32 | ) | 44 | |||||
Income before income taxes
|
3,202 | 1,572 | ||||||
Income tax expense
|
1,076 | 552 | ||||||
Net income
|
$ | 2,126 | $ | 1,020 | ||||
Earnings per share
|
||||||||
Basic
|
$ | 0.20 | $ | 0.09 | ||||
Diluted
|
$ | 0.20 | $ | 0.09 | ||||
Weighted average shares outstanding:
|
||||||||
Basic
|
10,717 | 10,772 | ||||||
Diluted
|
10,747 | 10,794 | ||||||
Cash dividends declared per share
|
$ | 0.10 | $ | 0.10 |
For the
|
||||||||
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net Income
|
$ | 2,126 | $ | 1,020 | ||||
Other comprehensive income:
|
||||||||
Amortization of actuarial gain net of tax of $10 and $6, respectively
|
(17 | ) | (9 | ) | ||||
Adjustments to net periodic benefit cost
|
(17 | ) | (9 | ) | ||||
Comprehensive Income
|
$ | 2,109 | $ | 1,011 |
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Cash flows from operating activities
|
||||||||
Cash received from customers
|
$ | 58,134 | $ | 53,631 | ||||
Cash paid to suppliers and employees
|
(51,992 | ) | (42,548 | ) | ||||
Income taxes paid, net
|
(2,115 | ) | (14 | ) | ||||
Interest paid, net
|
(34 | ) | (8 | ) | ||||
Net cash provided by operating activities
|
3,993 | 11,061 | ||||||
Cash flows from investing activities
|
||||||||
Purchase of property, plant and equipment
|
(880 | ) | (2,211 | ) | ||||
Proceeds received on notes issued for the sale of property, plant and equipment
|
14 | 9 | ||||||
Proceeds from the sale of property and equipment
|
8 | 30 | ||||||
Premiums paid on company-owned life insurance
|
(190 | ) | (187 | ) | ||||
Proceeds received on company-owned life insurance
|
516 | - | ||||||
Net cash used in investing activities
|
(532 | ) | (2,359 | ) | ||||
Cash flows from financing activities
|
||||||||
Cash dividends paid
|
(1,075 | ) | (1,079 | ) | ||||
Net cash used in financing activities
|
(1,075 | ) | (1,079 | ) | ||||
Net increase in cash and cash equivalents
|
$ | 2,386 | $ | 7,623 | ||||
Cash and cash equivalents at the beginning of the period
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26,342 | 40,355 | ||||||
Cash and cash equivalents at the end of the period
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$ | 28,728 | $ | 47,978 | ||||
Reconciliation of net income to net cash provided by operating activities:
|
||||||||
Net income
|
$ | 2,126 | $ | 1,020 | ||||
Depreciation and amortization
|
584 | 595 | ||||||
Non-cash restricted stock awards and performance grants
|
229 | 58 | ||||||
Provision for doubtful accounts
|
75 | 160 | ||||||
Deferred income taxes
|
(5 | ) | 5 | |||||
Gain on disposal of property
|
(8 | ) | (13 | ) | ||||
Gain on insurance policies
|
(135 | ) | (126 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Trade accounts receivable
|
1,762 | 1,690 | ||||||
Inventories
|
3,366 | 3,612 | ||||||
Prepaid expenses and other current assets
|
832 | 450 | ||||||
Trade accounts payable
|
(2,876 | ) | 4,182 | |||||
Accrued salaries, wages, and benefits
|
(712 | ) | (1,199 | ) | ||||
Accrued income taxes
|
(1,034 | ) | 533 | |||||
Other accrued expenses
|
(256 | ) | 100 | |||||
Deferred compensation
|
45 | (6 | ) | |||||
Net cash provided by operating activties
|
$ | 3,993 | $ | 11,061 |
1.
|
Preparation of Interim Financial Statements
|
§
|
the 2014 fiscal year and comparable terminology mean the fiscal year that began February 4, 2013 and will end February 2, 2014; and
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§
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the 2013 fiscal year and comparable terminology mean the fiscal year that began January 30, 2012 and ended February 3, 2013.
|
2.
|
Inventories
|
May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
Finished furniture
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$ | 55,210 | $ | 58,584 | ||||
Furniture in process
|
822 | 688 | ||||||
Materials and supplies
|
8,618 | 8,478 | ||||||
Inventories at FIFO
|
64,650 | 67,750 | ||||||
Reduction to LIFO basis
|
(18,144 | ) | (17,878 | ) | ||||
Inventories
|
$ | 46,506 | $ | 49,872 |
Depreciable Lives
|
May 5,
|
February 3,
|
|||||||||||
(In years)
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2013
|
2013
|
|||||||||||
Computer software and hardware
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3 | - | 10 | $ | 22,259 | $ | 22,203 | ||||||
Buildings and land improvements
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15 | - | 30 | 23,687 | 23,680 | ||||||||
Machinery and equipment
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10 | 3,717 | 3,663 | ||||||||||
Leasehold improvements
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5 | 2,783 | 2,697 | ||||||||||
Furniture and fixtures
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3 | - | 8 | 1,999 | 1,989 | ||||||||
Other
|
5 | 703 | 703 | ||||||||||
Total depreciable property at cost
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55,148 | 54,936 | |||||||||||
Less accumulated depreciation
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35,066 | 34,559 | |||||||||||
Total depreciable property, net
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20,082 | 20,377 | |||||||||||
Land
|
1,152 | 1,152 | |||||||||||
Construction-in-progress
|
1,891 | 1,300 | |||||||||||
Property, plant and equipment, net
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$ | 23,125 | $ | 22,829 |
May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
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 |
May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
Trade accounts receivable
|
$ | 19,887 | $ | 22,712 | ||||
Receivable from factor
|
7,633 | 6,809 | ||||||
Allowance for doubtful accounts
|
(1,085 | ) | (1,249 | ) | ||||
Accounts receivable
|
$ | 26,435 | $ | 28,272 |
May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
Restricted shares
|
29,063 | 29,063 | ||||||
Restricted stock units
|
32,353 | 32,353 | ||||||
61,416 | 61,416 |
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net income
|
$ | 2,126 | $ | 1,020 | ||||
Less: Unvested participating restricted stock dividends
|
3 | 2 | ||||||
Net earnings allocated to unvested participating restricted stock
|
6 | 2 | ||||||
Earnings available for common shareholders
|
2,117 | 1,016 | ||||||
Weighted average shares outstanding for basic earnings per share
|
10,717 | 10,772 | ||||||
Dilutive effect of unvested restricted stock and RSU awards
|
30 | 22 | ||||||
Weighted average shares outstanding for diluted earnings per share
|
10,747 | 10,794 | ||||||
Basic earnings per share
|
$ | 0.20 | $ | 0.09 | ||||
Diluted earnings per share
|
$ | 0.20 | $ | 0.09 |
May 5,
|
February 3,
|
|||||||
2013
|
2013
|
|||||||
Accrued salaries, wages and benefits (current portion)
|
$ | 379 | $ | 379 | ||||
Deferred compensation (long-term portion)
|
7,110 | 7,056 | ||||||
Total liability
|
$ | 7,489 | $ | 7,435 |
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net periodic benefit cost
|
||||||||
Service cost
|
$ | 64 | $ | 64 | ||||
Interest cost
|
73 | 74 | ||||||
Actuarial gain
|
(26 | ) | (15 | ) | ||||
Net periodic benefit cost
|
$ | 111 | $ | 124 |
Thirteen Weeks Ended
|
||||||||||||||||
May 5, 2013
|
April 29, 2012
|
|||||||||||||||
% Net Sales
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% Net Sales
|
|||||||||||||||
Net Sales
|
||||||||||||||||
Casegoods
|
$ | 35,444 | 63.0 | % | $ | 32,745 | 63.3 | % | ||||||||
Upholstery
|
20,851 | 37.0 | % | 18,985 | 36.7 | % | ||||||||||
Consolidated
|
$ | 56,295 | 100.0 | % | $ | 51,730 | 100.0 | % | ||||||||
Gross Profit & Margin
|
||||||||||||||||
Casegoods
|
$ | 9,998 | 28.2 | % | $ | 7,448 | 22.8 | % | ||||||||
Upholstery
|
3,918 | 18.8 | % | 3,474 | 18.3 | % | ||||||||||
Consolidated
|
$ | 13,916 | 24.7 | % | $ | 10,922 | 21.1 | % | ||||||||
Operating Income & Margin
|
||||||||||||||||
Casegoods
|
$ | 2,566 | 7.2 | % | $ | 1,376 | 4.2 | % | ||||||||
Upholstery
|
668 | 3.2 | % | 152 | 0.8 | % | ||||||||||
Consolidated
|
$ | 3,234 | 5.7 | % | $ | 1,528 | 3.0 | % | ||||||||
Capital Expenditures
|
||||||||||||||||
Casegoods
|
$ | 678 | $ | 1,364 | ||||||||||||
Upholstery
|
202 | 847 | ||||||||||||||
Consolidated
|
$ | 880 | $ | 2,211 | ||||||||||||
Depreciation & Amortization
|
||||||||||||||||
Casegoods
|
$ | 381 | $ | 408 | ||||||||||||
Upholstery
|
203 | 187 | ||||||||||||||
Consolidated
|
$ | 584 | $ | 595 | ||||||||||||
As of May 5, 2013
|
% Total
|
As of February 3, 2013
|
% Total
|
|||||||||||||
Total Assets
|
Assets
|
Assets
|
||||||||||||||
Casegoods
|
$ | 121,944 | 79.8 | % | $ | 124,509 | 79.9 | % | ||||||||
Upholstery
|
30,816 | 20.2 | % | 31,314 | 20.1 | % | ||||||||||
Consolidated
|
$ | 152,760 | 100.0 | % | $ | 155,823 | 100.0 | % |
§
|
the 2014 fiscal year and comparable terminology mean the fiscal year that began February 4, 2013 and will end February 2, 2014; and
|
§
|
the 2013 fiscal year and comparable terminology mean the fiscal year that began January 30, 2012 and ended February 3, 2013.
|
§
|
consumer confidence;
|
§
|
fashion trends;
|
§
|
availability of consumer credit;
|
§
|
energy and other commodity prices; and
|
§
|
housing and mortgage markets;
|
§
|
disposable income;
|
§
|
household formation and turnover; and
|
§
|
family size.
|
§
|
Consolidated net sales increased in the high single digits due to:
|
o
|
lower product discounting in our casegoods segment; and
|
o
|
higher average selling prices in both operating segments, partially offset by lower unit volume in our casegoods segment.
|
§
|
Gross profit increased due to increased sales volume in both segments, as well as:
|
o
|
lower product discounting and lower cost of goods sold due to moderating product costs; and
|
o
|
lower domestic manufacturing costs as a percent of sales in our upholstery segment, due to cost reduction initiatives and improved overhead utilization resulting from increased sales volume.
|
§
|
Selling and administrative expenses increased due to increased sales and a variety of other factors, including start-up costs for our H Contract and Homeware divisions; and
|
§
|
Our casegoods segment nearly doubled operating profitability from $1.4 million in the 2013 first quarter to $2.6 million in the fiscal 2014 first quarter.
|
§
|
Our upholstery segment reported operating profitability of $668,000 for the fiscal 2014 first quarter compared to an operating profit of $152,000 for the fiscal 2013 first quarter.
|
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net sales
|
100.0 | % | 100.0 | % | ||||
Cost of sales
|
75.3 | 78.9 | ||||||
Gross profit
|
24.7 | 21.1 | ||||||
Selling and administrative expenses
|
19.0 | 18.2 | ||||||
Operating income
|
5.7 | 3.0 | ||||||
Other (expense) income, net
|
0.0 | 0.1 | ||||||
Income before income taxes
|
5.7 | 3.0 | ||||||
Income tax expense
|
1.9 | 1.1 | ||||||
Net income
|
3.8 | 2.0 |
Thirteen Weeks Ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 35,444 | 63.0 | % | $ | 32,745 | 63.3 | % | $ | 2,699 | 8.2 | % | ||||||||||||
Upholstery
|
20,851 | 37.0 | % | 18,985 | 36.7 | % | $ | 1,866 | 9.8 | % | ||||||||||||||
Consolidated
|
$ | 56,295 | 100.0 | % | $ | 51,730 | 100.0 | % | $ | 4,565 | 8.8 | % |
Unit Volume
|
FY14 Q1 %
Increase vs. FY13 Q1
|
Average Selling Price
|
FY14 Q1 %
Increase vs. FY13 Q1
|
||||||
Casegoods
|
-4.7 | % |
Casegoods
|
13.3 | % | ||||
Upholstery
|
1.0 | % |
Upholstery
|
8.8 | % | ||||
Consolidated
|
-3.0 | % |
Consolidated
|
12.0 | % |
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 9,998 | 28.2 | % | $ | 7,448 | 22.8 | % | $ | 2,550 | 34.2 | % | ||||||||||||
Upholstery
|
3,918 | 18.8 | % | 3,474 | 18.3 | % | 444 | 12.8 | % | |||||||||||||||
Consolidated
|
$ | 13,916 | 24.7 | % | $ | 10,922 | 21.1 | % | $ | 2,994 | 27.4 | % |
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 7,432 | 21.0 | % | $ | 6,072 | 18.5 | % | $ | 1,360 | 22.4 | % | ||||||||||||
Upholstery
|
3,250 | 15.6 | % | 3,322 | 17.5 | % | (72 | ) | -2.2 | % | ||||||||||||||
Consolidated
|
$ | 10,682 | 19.0 | % | $ | 9,394 | 18.2 | % | $ | 1,288 | 13.7 | % |
§
|
start-up costs for our H Contract and Homeware divisions;
|
§
|
an increase in bonus expense due to improved earnings performance as compared to the prior-year quarter;
|
§
|
an increase in furniture disposals eligible to be deducted as contributions for income tax purposes; and
|
§
|
a smaller decrease in bad debt expense as a result of the reduction of our allowance for doubtful accounts in the prior year quarter because of favorable collections experience.
|
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Casegoods
|
$ | 2,566 | 7.2 | % | $ | 1,376 | 4.2 | % | $ | 1,190 | 86.5 | % | ||||||||||||
Upholstery
|
668 | 3.2 | % | 152 | 0.8 | % | 516 | 339.5 | % | |||||||||||||||
Consolidated
|
$ | 3,234 | 5.7 | % | $ | 1,528 | 3.0 | % | $ | 1,706 | 111.6 | % |
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Consolidated
|
$ | (32 | ) | 0.0 | % | $ | 44 | 0.1 | % | $ | (76 | ) | -172.7 | % |
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Consolidated income tax expense
|
$ | 1,076 | 1.9 | % | $ | 552 | 1.1 | % | $ | 524 | 94.9 | % | ||||||||||||
Effective Tax Rate
|
33.6 | % | 35.1 | % |
Thirteen weeks ended
|
||||||||||||||||||||||||
May 5, 2013
|
April 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net
Sales
|
% Net
Sales
|
|||||||||||||||||||||||
Consolidated
|
$ | 2,126 | 3.8 | % | $ | 1,020 | 2.0 | % | $ | 1,106 | 108.4 | % | ||||||||||||
Earnings per share
|
$ | 0.20 | $ | 0.09 |
§
|
pursuing additional distribution channels, including through our new H Contract and Homeware initiatives;
|
§
|
controlling costs;
|
§
|
adjusting our product pricing on our main-line products in order to mitigate inflation and improve margins;
|
§
|
achieving proper inventory levels, while optimizing product availability on best-selling items;
|
§
|
sourcing product from more competitive locations 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
|
||||||||||||
May 5, 2013
|
February 3, 2013
|
$ Change
|
||||||||||
Total Assets
|
$ | 152,760 | $ | 155,823 | $ | (3,063 | ) | |||||
Cash
|
$ | 28,728 | $ | 26,342 | $ | 2,386 | ||||||
Trade Receivables
|
26,435 | 28,272 | (1,837 | ) | ||||||||
Inventories
|
46,506 | 49,872 | (3,366 | ) | ||||||||
Prepaid Expenses & Other
|
4,224 | 5,181 | (957 | ) | ||||||||
Total Current Assets
|
$ | 105,893 | $ | 109,667 | $ | (3,774 | ) | |||||
Trade accounts payable
|
$ | 9,224 | $ | 11,620 | $ | (2,396 | ) | |||||
Accrued salaries, wages and benefits
|
2,604 | 3,316 | (712 | ) | ||||||||
Other accrued expenses
|
1,241 | 2,531 | (1,290 | ) | ||||||||
Total current liabilities
|
$ | 13,069 | $ | 17,467 | $ | (4,398 | ) | |||||
Net working capital
|
$ | 92,824 | $ | 92,200 | $ | 624 | ||||||
Working capital ratio
|
8.1 to 1
|
6.3 to 1
|
Thirteen Weeks Ended
|
||||||||
May 5,
|
April 29,
|
|||||||
2013
|
2012
|
|||||||
Net cash provided by operating activities
|
$ | 3,993 | $ | 11,061 | ||||
Net cash used in investing activities
|
(532 | ) | (2,359 | ) | ||||
Net cash used in financing activities
|
(1,075 | ) | (1,079 | ) | ||||
Net increase in cash and cash equivalents
|
$ | 2,386 | $ | 7,623 |
§
|
A $15.0 million unsecured revolving credit facility, up to $3.0 million of which can be used to support letters of credit;
|
§
|
A floating interest rate, adjusted monthly, based on LIBOR, plus an applicable margin based on the ratio of our funded debt to our EBITDA (each as defined in the agreement);
|
§
|
A quarterly unused commitment fee, based on our ratio of funded debt to EBITDA; and
|
§
|
No pre-payment penalty.
|
§
|
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.
|
§
|
allows us to outsource the administrative burden of the credit and collections functions for our upholstery operations;
|
§
|
allows us to transfer the collection risk associated with the majority of our domestic upholstery receivables to the factor; and
|
§
|
provides us with an additional, potential source of short-term liquidity.
|
§
|
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;
|
§
|
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;
|
§
|
disruptions affecting our Henry County, Virginia warehouses and corporate headquarters facilities;
|
§
|
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;
|
§
|
achieving and managing growth and change, and the risks associated with new business lines, acquisitions, restructurings, strategic alliances and international operations
|
§
|
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; and
|
§
|
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.
|
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)
|
|
10.1*
|
||
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 May 5, 2013, formatted in Extensible Business Reporting Language (“XBRL”): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of income, (iii) condensed consolidated statements of comprehensive income (iv) condensed consolidated statements of cash flows, and (v) the notes to the condensed consolidated financial statements
|
|
*Filed herewith
|
|
#Management contract or compensatory plan
|
|
+Under Rule 406T of Regulation S-T, this exhibit is deemed not filed or part of a registration statement or prospectus for
|
|
purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18
|
|
of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under those sections.
|
HOOKER FURNITURE CORPORATION | |||
Date: June 12, 2013
|
By:
|
/s/ Paul A. Huckfeldt | |
Paul A. Huckfeldt | |||
Vice President – Finance and
Accounting and Chief Financial Officer
|
|||
·
|
Entry into the Contract & Internet Distribution Channels – Since last summer Hooker has been developing two new businesses. These initiatives have included the design of new products, the identification of potential customers, and development of new operating processes. To accomplish those tasks the company is hiring new personnel as well as leveraging existing manufacturing, sourcing, and administrative human resources and systems.
|
·
|
Response to the Prop 65 Notice of Violation – In late February Hooker was served with a Notice of Violation to California’s Proposition 65, which contends that the company has not provided sufficient warning to consumers of the existence of cancer-causing substances in its products.
|
1.
|
For the contract and internet distribution projects, I will continue to assist the Hooker teams in (a) designing/developing internal manufacturing and administrative processes and (b) identifying/developing external sources for services, components, and products necessary for the efficient supply of the new products to the company’s customers.
|
2.
|
For the Prop 65 project, I will continue to assist Hooker’s Compliance team in coordinating the defense. This effort will involve regular communication with the attorneys at Sedgwick Law, development of the response to the plaintiff’s attorney, and regular reporting to Hooker management as the case proceeds to resolution.
|
|
Date: June 12, 2013 | By: |
/s/ Paul B. Toms, Jr.
Paul B. Toms, Jr.
Chairman and Chief Executive Officer
|
|
Date: June 12, 2013 | ||
By: | /s/ Paul A. Huckfeldt | |
Paul A. Huckfeldt
Vice President - Finance and
Accounting and Chief Financial Officer
|
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.
|
Date: June 12, 2013 | By: |
/s/ Paul B. Toms, Jr.
Paul B. Toms, Jr.
Chairman and Chief Executive Officer
|
By: | /s/ Paul A. Huckfeldt | |
Paul A. Huckfeldt
Vice President - Finance and
Accounting and Chief Financial Officer
|
11. Subsequent Events
|
3 Months Ended |
---|---|
May 05, 2013
|
|
Subsequent Events [Text Block] |
11.
Subsequent Events
Dividends
At
its June 3, 2013 meeting, our board of directors declared a
quarterly cash dividend of $0.10 per share, payable on June
28, 2013 to shareholders of record at June 14, 2013.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
May 05, 2013
|
Apr. 29, 2012
|
|
Net sales | $ 56,295 | $ 51,730 |
Cost of sales | 42,379 | 40,808 |
Gross profit | 13,916 | 10,922 |
Selling and administrative expenses | 10,682 | 9,394 |
Operating income | 3,234 | 1,528 |
Other (expense) income, net | (32) | 44 |
Income before income taxes | 3,202 | 1,572 |
Income tax expense | 1,076 | 552 |
Net income | $ 2,126 | $ 1,020 |
Earnings per share | ||
Basic (in Dollars per share) | $ 0.20 | $ 0.09 |
Diluted (in Dollars per share) | $ 0.20 | $ 0.09 |
Weighted average shares outstanding: | ||
Basic (in Shares) | 10,717 | 10,772 |
Diluted (in Shares) | 10,747 | 10,794 |
Cash dividends declared per share (in Dollars per share) | $ 0.10 | $ 0.10 |
4. Intangible Assets
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 05, 2013
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Intangible Assets Disclosure [Text Block] |
4. Intangible
Assets
|
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10. Segment Information (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 05, 2013
|
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Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following table presents segment information for each of the following thirteen-week periods:
|
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Reconciliation of Assets from Segment to Consolidated [Table Text Block] | The following table presents segment information for each of the following thirteen-week periods:
|
2. Inventories (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 05, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] |
|
10. Segment Information (Detail) - Assets from Segments to Consolidated (USD $)
In Thousands, unless otherwise specified |
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Total Assets (in Dollars) | $ 152,760 | $ 155,823 |
% of Total Assets | 100.00% | 100.00% |
Casegoods [Member]
|
||
Total Assets (in Dollars) | 121,944 | 124,509 |
% of Total Assets | 79.80% | 79.90% |
Upholstery [Member]
|
||
Total Assets (in Dollars) | $ 30,816 | $ 31,314 |
% of Total Assets | 20.20% | 20.10% |
3. Property, Plant and Equipment (Detail) - Property, Plant and Equipment (USD $)
|
3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 05, 2013
|
Feb. 03, 2013
|
May 05, 2013
Computer Software and Hardware [Member]
|
Feb. 03, 2013
Computer Software and Hardware [Member]
|
May 05, 2013
Computer Software and Hardware [Member]
Minimum [Member]
|
May 05, 2013
Computer Software and Hardware [Member]
Maximum [Member]
|
May 05, 2013
Building and Building Improvements [Member]
|
Feb. 03, 2013
Building and Building Improvements [Member]
|
May 05, 2013
Building and Building Improvements [Member]
Minimum [Member]
|
May 05, 2013
Building and Building Improvements [Member]
Maximum [Member]
|
May 05, 2013
Machinery and Equipment [Member]
|
Feb. 03, 2013
Machinery and Equipment [Member]
|
May 05, 2013
Machinery and Equipment [Member]
Maximum [Member]
|
May 05, 2013
Leasehold Improvements [Member]
|
Feb. 03, 2013
Leasehold Improvements [Member]
|
May 05, 2013
Leasehold Improvements [Member]
Maximum [Member]
|
May 05, 2013
Furniture and Fixtures [Member]
|
Feb. 03, 2013
Furniture and Fixtures [Member]
|
May 05, 2013
Furniture and Fixtures [Member]
Minimum [Member]
|
May 05, 2013
Furniture and Fixtures [Member]
Maximum [Member]
|
May 05, 2013
Property, Plant and Equipment, Other Types [Member]
|
Feb. 03, 2013
Property, Plant and Equipment, Other Types [Member]
|
May 05, 2013
Property, Plant and Equipment, Other Types [Member]
Maximum [Member]
|
|
Depreciable Lives (In years) | 3 years | 10 years | 15 years | 30 years | 10 years | 5 years | 3 years | 8 years | 5 years | ||||||||||||||
Depreciable property at cost | $ 55,148,000 | $ 54,936,000 | $ 22,259,000 | $ 22,203,000 | $ 23,687,000 | $ 23,680,000 | $ 3,717,000 | $ 3,663,000 | $ 2,783,000 | $ 2,697,000 | $ 1,999,000 | $ 1,989,000 | $ 703,000 | $ 703,000 | |||||||||
Less accumulated depreciation | 35,066,000 | 34,559,000 | |||||||||||||||||||||
Total depreciable property, net | 20,082,000 | 20,377,000 | |||||||||||||||||||||
Land | 1,152,000 | 1,152,000 | |||||||||||||||||||||
Construction-in-progress | 1,891,000 | 1,300,000 | |||||||||||||||||||||
Property, plant and equipment, net | $ 23,125,000 | $ 22,829,000 |
3. Property, Plant and Equipment (Detail) (USD $)
|
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Construction in Progress, Gross | $ 1,891,000 | $ 1,300,000 |
Ongoing ERP Conversion Efforts [Member]
|
||
Construction in Progress, Gross | 919,000 | |
Various Other Projects [Member]
|
||
Construction in Progress, Gross | $ 972,000 |
8. Employee Benefit Plans (Detail) - Schedule of Amounts Recognized in Balance Sheets (USD $)
In Thousands, unless otherwise specified |
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Accrued salaries, wages and benefits (current portion) | $ 2,604 | $ 3,316 |
Deferred compensation (long-term portion) | 7,557 | 7,311 |
Supplemental Employee Retirement Plan, Defined Benefit [Member]
|
||
Accrued salaries, wages and benefits (current portion) | 379 | 379 |
Deferred compensation (long-term portion) | 7,110 | 7,056 |
Total liability | $ 7,489 | $ 7,435 |
6. Earnings Per Share (Detail) - Schedule of Restricted Stock and Restricted Stock Units
In Thousands, unless otherwise specified |
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Restricted shares | 29,063 | 29,063 |
Restricted stock units | 32,353 | 32,353 |
61,416 | 61,416 |
2. Inventories (Detail) - Schedule of Inventory (USD $)
In Thousands, unless otherwise specified |
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Finished furniture | $ 55,210 | $ 58,584 |
Furniture in process | 822 | 688 |
Materials and supplies | 8,618 | 8,478 |
Inventories at FIFO | 64,650 | 67,750 |
Reduction to LIFO basis | (18,144) | (17,878) |
Inventories | $ 46,506 | $ 49,872 |
2. Inventories
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 05, 2013
|
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Inventory Disclosure [Text Block] |
|
5. Accounts Receivable
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 05, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 domestically produced upholstery accounts receivable
without recourse to us.
Under
our factoring agreement, invoices for domestically produced
upholstery products are generated and transmitted to our
customers, with copies to the factor on a daily basis, as
products are shipped to our 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,
generally when the merchandise is shipped to our customer
until payment is received from the factor.
A
limited number of our accounts receivable for our
domestically produced upholstery are factored with recourse
to us. The amounts of these receivables at May 5, 2013 and
February 3, 2013 were $245,000 and $130,000, respectively. If
the factor is unable to collect the amounts due, invoices are
returned to us for collection. We include an estimate of
potentially uncollectible receivables in our calculation of
our allowance for doubtful accounts.
|
3. Property, Plant and Equipment
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 05, 2013
|
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Property, Plant and Equipment Disclosure [Text Block] |
3. Property, Plant
and Equipment
At
May 5, 2013, construction-in-progress consisted of $919,000
of expenses related to our ongoing ERP conversion efforts and
$972,000 related to various other projects to enhance our
facilities and operations.
|
4. Intangible Assets (Detail) - Schedule of Intangible Assets (USD $)
In Thousands, unless otherwise specified |
May 05, 2013
|
Feb. 03, 2013
|
---|---|---|
Total trademarks and tradenames | $ 1,257 | $ 1,257 |
Bradington-Young [Member] | Upholstery [Member]
|
||
Trademarks and trade names | 861 | 861 |
Sam Moore [Member] | Upholstery [Member]
|
||
Trademarks and trade names | $ 396 | $ 396 |
6. Earnings Per Share (Detail) - Schedule of Earnings Per Share (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
May 05, 2013
|
Apr. 29, 2012
|
|
Net income | $ 2,126 | $ 1,020 |
Less: Unvested participating restricted stock dividends | 3 | 2 |
Net earnings allocated to unvested participating restricted stock | 6 | 2 |
Earnings available for common shareholders | $ 2,117 | $ 1,016 |
Weighted average shares outstanding for basic earnings per share (in Shares) | 10,717 | 10,772 |
Dilutive effect of unvested restricted stock and RSU awards (in Shares) | 30 | 22 |
Weighted average shares outstanding for diluted earnings per share (in Shares) | 10,747 | 10,794 |
Basic earnings per share (in Dollars per share) | $ 0.20 | $ 0.09 |
Diluted earnings per share (in Dollars per share) | $ 0.20 | $ 0.09 |