UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended October 30, 2022 Commission file number 000-25349 HOOKER FURNISHINGS CORPORATION (Exact name of registrant as specified in its charter) Virginia 54-0251350 (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) 440 East Commonwealth Boulevard, Martinsville, VA 24112 (A ...

Hooker Furnishings Corporation (NASDAQ:HOFT) Q3 2023 Earnings Conference Call December 8, 2022 9:00 AM ET Company Participants Jeremy Hoff - Chief Executive Officer Paul Huckfeldt - Senior Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti Operator Greetings ladies and gentlemen, and welcome to the Hooker Furnishings quarterly investor conference call reporting its operating results for its fiscal 2023 third quarter. At this time, all participants are in ...

Hooker Furnishings Corporation (NASDAQ:HOFT) Q2 2023 Earnings Conference Call September 8, 2022 9:00 AM ET Company Participants Paul Huckfeldt - Senior Vice President and Chief Financial Officer Jeremy Hoff - Chief Executive Officer Conference Call Participants Anthony Lebiedzinski - Sidoti JP Geygan - Global Value Investment Corp John Deysher - Pinnacle Value Fund Operator Good day and thank you for standing by. Welcome to the Hooker Furnishings Second Quarter 2023 Earnings Webcast. [Operator Instructions] ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION HOOKER FURNISHINGS CORPORATION (Exact name of registrant as specified in its charter) Virginia 54-0251350 (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) 440 East Commonwealth Boulevard, Martinsville, VA 24112 Washington, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 31, 2022 Commission file number 000-25349 (Addr ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the thirteen weeks ended May 1, 2022, and comparative periods, including balance sheets, statements of operations, comprehensive income, cash flows, and stockholders' equity, along with detailed notes on accounting policies, acquisitions, and segment information [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Condensed Consolidated Balance Sheet Highlights (In thousands) | Item | May 1, 2022 | January 30, 2022 | | :-------------------------------- | :---------- | :--------------- | | Cash and cash equivalents | $10,100 | $69,366 | | Inventories | $107,681 | $75,023 | | Goodwill | $15,516 | $490 | | Total assets | $387,071 | $374,559 | | Total current liabilities | $66,978 | $56,937 | | Total liabilities | $124,809 | $113,431 | | Total shareholders' equity | $262,262 | $261,128 | - Cash and cash equivalents decreased significantly from **$69.4 million** to **$10.1 million**, primarily due to the Sunset West acquisition and increased inventory levels[8](index=8&type=chunk) - Inventories increased by **$32.6 million**, reflecting a build-up of stock[8](index=8&type=chunk) - Goodwill saw a substantial increase from **$0.49 million** to **$15.5 million**, largely attributable to the Sunset West acquisition[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Condensed Consolidated Statements of Operations Highlights (Thirteen Weeks Ended, In thousands, except per share data) | Item | May 1, 2022 | May 2, 2021 | % Change | | :-------------------------- | :---------- | :---------- | :------- | | Net sales | $147,314 | $162,861 | -9.5% | | Gross profit | $29,459 | $33,582 | -12.3% | | Operating income | $3,923 | $12,243 | -68.0% | | Net income | $3,182 | $9,443 | -66.3% | | Basic EPS | $0.27 | $0.79 | -65.8% | | Diluted EPS | $0.26 | $0.78 | -66.7% | | Cash dividends declared per share | $0.20 | $0.18 | +11.1% | - Net sales decreased by **9.5%** year-over-year, primarily due to declines in the Home Meridian and Hooker Branded segments[10](index=10&type=chunk) - Operating income and net income saw significant declines of **68.0%** and **66.3%** respectively, reflecting lower sales and increased expenses[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Condensed Consolidated Statements of Comprehensive Income (Thirteen Weeks Ended, In thousands) | Item | May 1, 2022 | May 2, 2021 | | :-------------------------- | :---------- | :---------- | | Net income | $3,182 | $9,443 | | Adjustments to net periodic benefit cost | $(14) | $76 | | Total comprehensive income | $3,168 | $9,519 | - Total comprehensive income decreased by **66.7%** year-over-year, consistent with the decline in net income[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Condensed Consolidated Statements of Cash Flows Highlights (Thirteen Weeks Ended, In thousands) | Activity | May 1, 2022 | May 2, 2021 | | :----------------------------------- | :---------- | :---------- | | Net cash (used in)/provided by operating activities | $(30,018) | $238 | | Net cash used in investing activities | $(26,860) | $(2,343) | | Cash used in financing activities | $(2,388) | $(2,140) | | Net decrease in cash and cash equivalents | $(59,266) | $(4,245) | | Cash and cash equivalents - end of quarter | $10,100 | $61,596 | - Operating activities shifted from providing **$0.238 million** cash in Q1 FY22 to using **$30.0 million** in Q1 FY23, primarily due to a significant increase in inventories[16](index=16&type=chunk) - Investing activities used **$26.9 million**, largely driven by **$25.9 million** for acquisitions (Sunset West)[16](index=16&type=chunk) - Overall, cash and cash equivalents decreased by **$59.3 million** during the quarter[16](index=16&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Consolidated Statements of Stockholders' Equity Highlights (In thousands, except per share data) | Item | January 30, 2022 | May 1, 2022 | | :----------------------------------- | :--------------- | :---------- | | Common Stock Amount | $53,295 | $53,649 | | Retained Earnings | $207,884 | $208,678 | | Accumulated Other Comprehensive Income (loss) | $(51) | $(65) | | Total Shareholders' Equity | $261,128 | $262,262 | - Total shareholders' equity increased slightly from **$261.1 million** to **$262.3 million**, primarily due to net income partially offset by cash dividends and other comprehensive loss[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Preparation of Interim Financial Statements](index=8&type=section&id=1.%20Preparation%20of%20Interim%20Financial%20Statements) - The condensed consolidated financial statements are prepared in accordance with SEC rules and GAAP, including all normal recurring adjustments[20](index=20&type=chunk) - The 2023 fiscal year began January 31, 2022, and ended May 1, 2022, for the thirteen-week period[21](index=21&type=chunk)[25](index=25&type=chunk) - The company acquired substantially all assets of Sunset West on January 31, 2022, for **$23.9 million** cash and **$2 million** escrow, with results included in the Domestic Upholstery segment[22](index=22&type=chunk)[23](index=23&type=chunk) [2. Recently Adopted Accounting Policies](index=8&type=section&id=2.%20Recently%20Adopted%20Accounting%20Policies) - No new accounting pronouncements were adopted in the 2023 fiscal year, and none are expected to have a material effect[24](index=24&type=chunk) [3. Acquisition](index=9&type=section&id=3.%20Acquisition) - The Sunset West acquisition was accounted for using the acquisition method, recording assets and liabilities at fair value, with excess purchase price recorded as goodwill[26](index=26&type=chunk) Sunset West Acquisition Purchase Price and Fair Value Estimates (In thousands) | Item | Amount | | :------------------------------------ | :------- | | Cash paid for assets acquired | $23,909 | | Escrow | $2,003 | | Fair value of earnout | $766 | | **Total purchase price** | **$26,678** | | Intangible assets (customer relationships, trade name) | $11,451 | | Goodwill | $15,026 | - Goodwill of **$15.0 million** is attributable to growth opportunities and expected synergies, and is expected to be tax deductible[29](index=29&type=chunk) - Identifiable intangible assets include **$10.4 million** for customer relationships (10-year amortization) and **$1.1 million** for the trade name (12-year amortization)[30](index=30&type=chunk) - Sunset West contributed **$7.9 million** in net sales and **$0.861 million** in operating income (including **$0.282 million** intangible amortization) to the Domestic Upholstery segment in Q1 FY23[30](index=30&type=chunk) [4. Accounts Receivable](index=10&type=section&id=4.%20Accounts%20Receivable) Trade Accounts Receivable, Net (In thousands) | Item | May 1, 2022 | January 30, 2022 | | :-------------------------- | :---------- | :--------------- | | Gross accounts receivable | $92,072 | $83,027 | | Customer allowances | $(6,900) | $(7,284) | | Allowance for doubtful accounts | $(2,150) | $(2,016) | | **Trade accounts receivable** | **$83,022** | **$73,727** | [5. Inventories](index=10&type=section&id=5.%20Inventories) Inventories (In thousands) | Item | May 1, 2022 | January 30, 2022 | | :-------------------- | :---------- | :--------------- | | Finished furniture | $120,110 | $89,066 | | Furniture in process | $2,692 | $2,314 | | Materials and supplies | $15,108 | $13,179 | | Inventories at FIFO | $137,910 | $104,559 | | Reduction to LIFO basis | $(30,229) | $(29,536) | | **Inventories** | **$107,681** | **$75,023** | [6. Property, Plant and Equipment](index=10&type=section&id=6.%20Property,%20Plant%20and%20Equipment) Property, Plant and Equipment, Net (In thousands) | Item | May 1, 2022 | January 30, 2022 | | :-------------------------------- | :---------- | :--------------- | | Total depreciable property, net | $25,585 | $26,480 | | Land | $1,077 | $1,077 | | Construction-in-progress | $946 | $501 | | **Property, plant and equipment, net** | **$27,608** | **$28,058** | [7. Cloud Computing Hosting Arrangement](index=10&type=section&id=7.%20Cloud%20Computing%20Hosting%20Arrangement) - The company is implementing a common Enterprise Resource Planning (ERP) system, capitalizing implementation costs as internal-use software[34](index=34&type=chunk) Capitalized ERP Implementation Costs (In thousands) | Item | Amount | | :-------------------------- | :------- | | Balance at January 30, 2022 | $3,228 | | Costs capitalized during the period | $1,331 | | **Balance at May 1, 2022** | **$4,559** | [8. Fair Value Measurements](index=11&type=section&id=8.%20Fair%20Value%20Measurements) - Fair value measurements use a three-tier hierarchy (Level 1, 2, 3)[35](index=35&type=chunk) - Company-owned life insurance is measured at fair value on a recurring basis using Level 2 inputs[35](index=35&type=chunk) Company-Owned Life Insurance Fair Value (In thousands) | Date | Level 2 Fair Value | | :---------------- | :----------------- | | May 1, 2022 | $27,183 | | January 30, 2022 | $26,479 | [9. Intangible Assets](index=11&type=section&id=9.%20Intangible%20Assets) Non-amortizable Intangible Assets (In thousands) | Item | January 30, 2022 | Acquisition | May 1, 2022 | | :-------------------------------- | :--------------- | :---------- | :---------- | | Goodwill - Shenandoah Furniture | $490 | $- | $490 | | Goodwill - Sunset West | $- | $15,026 | $15,026 | | Total Goodwill | $490 | $15,026 | $15,516 | | Total non-amortizable assets | $8,397 | $15,026 | $23,423 | Amortizable Intangible Assets (In thousands) | Item | January 30, 2022 | Acquisition | Amortization | May 1, 2022 | | :-------------------- | :--------------- | :---------- | :----------- | :---------- | | Customer Relationships | $15,348 | $10,401 | $(841) | $24,908 | | Trademarks | $598 | $1,050 | $(37) | $1,611 | | **Totals** | **$15,946** | **$11,451** | **$(878)** | **$26,519** | - Amortization expense is expected to be approximately **$2.6 million** for the remainder of fiscal 2023[37](index=37&type=chunk) [10. Leases](index=12&type=section&id=10.%20Leases) Lease Costs (Thirteen Weeks Ended, In thousands) | Item | May 1, 2022 | May 2, 2021 | | :-------------------- | :---------- | :---------- | | Total operating lease cost | $2,662 | $2,076 | | Operating cash outflows | $2,829 | $1,992 | Operating Leases Right-of-Use Assets and Liabilities (In thousands) | Item | May 1, 2022 | January 30, 2022 | | :-------------------------------- | :---------- | :--------------- | | Total operating leases right-of-use assets | $52,700 | $51,854 | | Total operating lease liabilities | $54,718 | $54,041 | - The company has an additional lease for a showroom in High Point, NC, commencing Fall 2022, with estimated future minimum rental commitments of approximately **$23.7 million** over 10 years[40](index=40&type=chunk) [11. Long-Term Debt](index=13&type=section&id=11.%20Long-Term%20Debt) - As of May 1, 2022, the company had **$27.9 million** available under its **$35 million** revolving credit facility[41](index=41&type=chunk) - Standby letters of credit totaling **$7.1 million** were outstanding, but no additional borrowings were outstanding under the facility[41](index=41&type=chunk) [12. Earnings Per Share](index=13&type=section&id=12.%20Earnings%20Per%20Share) - The company issues restricted stock awards, RSUs, and PSUs to encourage retention and increase shareholder value[43](index=43&type=chunk) Earnings Per Share Calculation (Thirteen Weeks Ended, In thousands, except per share data) | Item | May 1, 2022 | May 2, 2021 | | :------------------------------------------ | :---------- | :---------- | | Net income | $3,182 | $9,443 | | Earnings available for common shareholders | $3,138 | $9,383 | | Weighted average shares outstanding (basic) | 11,866 | 11,833 | | Weighted average shares outstanding (diluted) | 11,949 | 11,972 | | Basic earnings per share | $0.27 | $0.79 | | Diluted earnings per share | $0.26 | $0.78 | [13. Income Taxes](index=14&type=section&id=13.%20Income%20Taxes) Income Tax Expense and Effective Tax Rate (Thirteen Weeks Ended, In thousands) | Item | May 1, 2022 | May 2, 2021 | | :-------------------- | :---------- | :---------- | | Income tax expense | $991 | $2,773 | | Effective tax rate | 23.7% | 22.7% | [14. Segment Information](index=14&type=section&id=14.%20Segment%20Information) - The company is organized into three reportable segments: Hooker Branded, Home Meridian, Domestic Upholstery, and 'All Other'[49](index=49&type=chunk)[52](index=52&type=chunk) - Segment reporting changes for fiscal 2023 first quarter include reclassifying H Contract seating products to Sam Moore and including Sunset West results in the Domestic Upholstery segment[50](index=50&type=chunk)[51](index=51&type=chunk) Net Sales by Segment (Thirteen Weeks Ended, In thousands) | Segment | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | | :------------------ | :---------- | :---------- | :---------- | :---------- | | Hooker Branded | $42,230 | 28.7% | $51,339 | 31.5% | | Home Meridian | $62,085 | 42.1% | $84,411 | 51.8% | | Domestic Upholstery | $41,220 | 28.0% | $25,420 | 15.7% | | All Other | $1,779 | 1.2% | $1,691 | 1.0% | | **Consolidated** | **$147,314** | **100%** | **$162,861** | **100.0%** | Operating Income/(Loss) by Segment (Thirteen Weeks Ended, In thousands) | Segment | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | | :------------------ | :---------- | :---------- | :---------- | :---------- | | Hooker Branded | $4,142 | 9.8% | $9,442 | 18.4% | | Home Meridian | $(3,095) | -5.0% | $866 | 1.0% | | Domestic Upholstery | $2,752 | 6.7% | $1,731 | 6.8% | | All Other | $124 | 7.0% | $204 | 12.1% | | **Consolidated** | **$3,923** | **2.7%** | **$12,243** | **7.5%** | Net Sales by Product Type (Thirteen Weeks Ended, In thousands) | Product Type | May 1, 2022 | % Total | May 2, 2021 | % Total | | :----------- | :---------- | :------ | :---------- | :------ | | Casegoods | $74,192 | 50% | $97,959 | 60% | | Upholstery | $73,122 | 50% | $64,902 | 40% | | **Total** | **$147,314** | **100%** | **$162,861** | **100%** | [15. Subsequent Events](index=16&type=section&id=15.%20Subsequent%20Events) - On June 1, 2022, the board declared a quarterly cash dividend of **$0.20 per share**, payable June 30, 2022[56](index=56&type=chunk) - On June 6, 2022, the Board of Directors authorized the repurchase of up to **$20 million** of the company's common shares[57](index=57&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the first quarter of fiscal 2023, discussing net sales, profitability, segment performance, orders and backlog, liquidity, capital resources, and future outlook, while also outlining forward-looking statements and associated risks [Forward-Looking Statements](index=17&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[60](index=60&type=chunk)[63](index=63&type=chunk) - Key risks include reliance on offshore sourcing, COVID-19 impact, general economic conditions, tariffs, domestic manufacturing issues, Sunset West acquisition integration, supply chain disruptions, ERP implementation, and market competition[61](index=61&type=chunk)[65](index=65&type=chunk) [Quarterly Reporting](index=19&type=section&id=Quarterly%20Reporting) - This report covers the unaudited condensed consolidated financial statements for the thirteen-week period ended May 1, 2022 (fiscal 2023 first quarter), compared to the prior year period[66](index=66&type=chunk)[70](index=70&type=chunk) [Overview](index=20&type=section&id=Overview) - Hooker Furnishings Corporation designs, markets, and imports casegoods, leather, and fabric-upholstered furniture, and domestically manufactures premium custom furniture[71](index=71&type=chunk) - Segment reporting changes include reclassifying H Contract seating products to Sam Moore and integrating Sunset West into the Domestic Upholstery segment[73](index=73&type=chunk)[74](index=74&type=chunk) - Orders and backlog are generally good indicators of sales momentum, but current supply chain issues (shipping containers, vessel space, vendor capacity) are slowing order conversion to shipments[75](index=75&type=chunk)[77](index=77&type=chunk) [Orders and Backlog](index=21&type=section&id=Orders%20and%20Backlog) Order Backlog (In thousands) | Reporting Segment | May 1, 2022 | January 30, 2022 | May 2, 2021 | | :------------------ | :---------- | :--------------- | :---------- | | Hooker Branded | $76,562 | $68,925 | $41,007 | | Home Meridian | $120,844 | $167,968 | $191,767 | | Domestic Upholstery | $79,018 | $67,068 | $43,985 | | All Other | $6,153 | $6,148 | $3,704 | | **Consolidated** | **$282,577** | **$310,109** | **$280,463** | - Consolidated order backlog decreased by **$27.5 million (8.9%)** from fiscal 2022 year-end but increased by **$2.1 million (0.8%)** compared to the prior year first quarter end[79](index=79&type=chunk) - Hooker Branded and Domestic Upholstery segments saw increased backlogs due to supply chain disruptions and production delays, while Home Meridian's backlog decreased due to exiting the Clubs channel and adjustments to programmed orders[79](index=79&type=chunk) [Executive Summary-Results of Operations](index=21&type=section&id=Executive%20Summary-Results%20of%20Operations) - Consolidated net sales for Q1 FY23 decreased by **$15.5 million (9.5%)** year-over-year, driven by declines in Home Meridian and Hooker Branded, partially offset by strong Domestic Upholstery sales[80](index=80&type=chunk) - Consolidated operating income was **$3.9 million (2.7% of net sales)**, down from **$12.2 million (7.5%)** in the prior year, and net income was **$3.2 million ($0.26 diluted EPS)**, down from **$9.4 million ($0.78 diluted EPS)**[80](index=80&type=chunk) [Review](index=21&type=section&id=Review) - Hooker Branded net sales decreased by **17.7%** due to inventory unavailability caused by COVID-related lockdowns in Vietnam, but quarter-end backlog was **11%** higher than fiscal 2022 year-end[82](index=82&type=chunk) - Home Meridian net sales decreased by **26.4%** due to lower direct container sales, exit from the unprofitable Clubs channel, and decreased e-commerce demand, resulting in an operating loss[83](index=83&type=chunk) - Domestic Upholstery net sales increased by **62.2%** due to organic growth and the addition of Sunset West sales, with operating income higher than the prior year despite material cost inflation[84](index=84&type=chunk) - Cash and cash equivalents decreased by **$59.3 million** to **$10.1 million**, primarily due to a **$30.1 million** increase in inventory and **$26 million** for the Sunset West acquisition[85](index=85&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) [Fiscal 2023 First Quarter Compared to Fiscal 2022 First Quarter](index=23&type=section&id=Fiscal%202023%20First%20Quarter%20Compared%20to%20Fiscal%202022%20First%20Quarter) Consolidated Net Sales by Segment (Thirteen Weeks Ended, In thousands) | Segment | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | $ Change | % Change | | :------------------ | :---------- | :---------- | :---------- | :---------- | :------- | :------- | | Hooker Branded | $42,230 | 28.7% | $51,339 | 31.5% | $(9,109) | -17.7% | | Home Meridian | $62,085 | 42.1% | $84,411 | 51.8% | $(22,326) | -26.4% | | Domestic Upholstery | $41,220 | 28.0% | $25,420 | 15.7% | $15,800 | 62.2% | | All Other | $1,779 | 1.2% | $1,691 | 1.0% | $88 | 5.2% | | **Consolidated** | **$147,314** | **100%** | **$162,861** | **100%** | **$(15,547)** | **-9.5%** | Consolidated Gross Profit and Margin by Segment (Thirteen Weeks Ended, In thousands) | Segment | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | $ Change | % Change | | :------------------ | :---------- | :---------- | :---------- | :---------- | :------- | :------- | | Hooker Branded | $13,240 | 31.4% | $17,212 | 33.5% | $(3,972) | -23.1% | | Home Meridian | $6,305 | 10.2% | $10,135 | 12.0% | $(3,830) | -37.8% | | Domestic Upholstery | $9,354 | 22.7% | $5,638 | 22.2% | $3,716 | 65.9% | | All Other | $560 | 31.5% | $597 | 35.3% | $(37) | -6.2% | | **Consolidated** | **$29,459** | **20.0%** | **$33,582** | **20.6%** | **$(4,123)** | **-12.3%** | Consolidated Operating Profit/(Loss) and Margin by Segment (Thirteen Weeks Ended, In thousands) | Segment | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | $ Change | % Change | | :------------------ | :---------- | :---------- | :---------- | :---------- | :------- | :------- | | Hooker Branded | $4,142 | 9.8% | $9,442 | 18.4% | $(5,300) | -56.1% | | Home Meridian | $(3,095) | -5.0% | $866 | 1.0% | $(3,961) | -457.4% | | Domestic Upholstery | $2,752 | 6.7% | $1,731 | 6.8% | $1,021 | 59.0% | | All Other | $124 | 7.0% | $204 | 12.1% | $(80) | -39.2% | | **Consolidated** | **$3,923** | **2.7%** | **$12,243** | **7.5%** | **$(8,320)** | **-68.0%** | Consolidated Net Income and Diluted EPS (Thirteen Weeks Ended, In thousands, except per share data) | Item | May 1, 2022 | % Net Sales | May 2, 2021 | % Net Sales | $ Change | % Change | | :---------------------- | :---------- | :---------- | :---------- | :---------- | :------- | :------- | | Consolidated Net Income | $3,182 | 2.2% | $9,443 | 5.8% | $(6,261) | -66.3% | | Diluted earnings per share | $0.26 | | $0.78 | | | | [COVID-19](index=26&type=section&id=COVID-19) - The company continues to monitor COVID-19 information, with administrative staff telecommuting, stepped-up facility cleaning, and medical plan coverage for testing, treatment, and vaccinations[100](index=100&type=chunk) - More administrative staff are returning to the office, and domestic/limited international travel has resumed with adjusted protocols[101](index=101&type=chunk) [Outlook](index=26&type=section&id=Outlook) - Demand is leveling off from previous unsustainable levels, but the company expects improved shipping positions and cash balances by the end of Q2 FY23 due to incoming inventory[102](index=102&type=chunk) - Inflationary pressures, including higher interest rates, are affecting consumers, particularly at lower price points[103](index=103&type=chunk) - The company continues to face near-record ocean freight rates, a strained global supply chain, port congestion, and raw material inflation, managed through surcharges, price increases, and resourcing[103](index=103&type=chunk) - Strategic initiatives include entry into the outdoor furniture market (Sunset West), expanding into interior design, launching Pulaski Upholstery, and focusing on profitable distribution channels[104](index=104&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=27&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) [Cash Flows – Operating, Investing and Financing Activities](index=27&type=section&id=Cash%20Flows%20%E2%80%93%20Operating,%20Investing%20and%20Financing%20Activities) Net Cash Flows (Thirteen Weeks Ended, In thousands) | Activity | May 1, 2022 | May 2, 2021 | | :----------------------------------- | :---------- | :---------- | | Net cash (used in)/provided by operating activities | $(30,018) | $238 | | Net cash used in investing activities | $(26,860) | $(2,343) | | Cash used in financing activities | $(2,388) | $(2,140) | | **Net decrease in cash and cash equivalents** | **$(59,266)** | **$(4,245)** | - Cash was used to build inventory, fund the Sunset West acquisition (**$26 million**), pay cash dividends (**$2.4 million**), and for capital expenditures (**$0.83 million**)[105](index=105&type=chunk) [Liquidity, Financial Resources and Capital Expenditures](index=27&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Expenditures) - Financial resources include available cash, expected cash flow from operations, available lines of credit, and cash surrender value of company-owned life insurance[107](index=107&type=chunk) - These resources are believed sufficient to meet business requirements and dividend payments through fiscal 2023 and the foreseeable future[107](index=107&type=chunk) [Loan Agreements and Revolving Credit Facility](index=27&type=section&id=Loan%20Agreements%20and%20Revolving%20Credit%20Facility) - The company has a **$35 million** revolving credit facility with Bank of America, expiring February 1, 2026, with a **$10 million** sublimit for letters of credit[108](index=108&type=chunk)[109](index=109&type=chunk) - Financial covenants include maintaining a funded debt to EBITDA ratio not exceeding **2.00:1.00**, a fixed charge coverage ratio of at least **1.25:1.00**, and limiting capital expenditures to **$15.0 million** annually[111](index=111&type=chunk) - As of May 1, 2022, **$27.9 million** was available, with **$7.1 million** in standby letters of credit. An **$8 million** draw in early Q2 FY23 for inventory was partially repaid (**$4 million**) by mid-May[113](index=113&type=chunk)[114](index=114&type=chunk) [Share Repurchase Authorization](index=28&type=section&id=Share%20Repurchase%20Authorization) - On June 6, 2022, the Board authorized the repurchase of up to **$20 million** of common shares, with no expiration date[115](index=115&type=chunk) [Expected Term Loan Proceeds](index=28&type=section&id=Expected%20Term%20Loan%20Proceeds) - The company is in the process of securing a **$25 million** term loan with Bank of America to replenish cash used for the Sunset West acquisition, expected to close within 30-60 days[116](index=116&type=chunk) [Capital Expenditures](index=29&type=section&id=Capital%20Expenditures) - The company expects to spend approximately **$5 million** in capital expenditures for the remainder of fiscal 2023, including **$2.5 million** for showroom renovations[117](index=117&type=chunk) - Showroom renovations aim to maximize interior design traffic, showcase Sunset West products, and support Home Meridian's new 'Portfolio' sales program[117](index=117&type=chunk) [Enterprise Resource Planning Project](index=29&type=section&id=Enterprise%20Resource%20Planning%20Project) - An ERP system upgrade is underway, with implementation expected in legacy Hooker divisions and Sunset West in H2 FY23, followed by Home Meridian[118](index=118&type=chunk) - Approximately **$3 million** is anticipated to be spent on the ERP project for the remainder of the year, in addition to significant associate time[118](index=118&type=chunk) [Dividends](index=29&type=section&id=Dividends) - On June 1, 2022, a quarterly cash dividend of **$0.20 per share** was declared, payable on June 30, 2022[119](index=119&type=chunk) [Critical Accounting Policies](index=29&type=section&id=Critical%20Accounting%20Policies) - There have been no material changes to the company's critical accounting policies and estimates from the 2022 Annual Report[120](index=120&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's exposure to various market risks, including interest rate fluctuations, raw material price volatility (especially for wood, fabric, and foam, and the impact of Russian Birch shortage), and foreign currency exchange rate changes, and how these risks are managed [Interest Rate Risk](index=29&type=section&id=Interest%20Rate%20Risk) - Borrowings under the revolving credit facility bear interest based on LIBOR plus **1.0%**, exposing the company to interest rate changes[122](index=122&type=chunk) - As of May 1, 2022, there was no outstanding balance under the revolving credit facility, other than **$7.1 million** reserved for standby letters of credit[122](index=122&type=chunk) [Raw Materials Price Risk](index=29&type=section&id=Raw%20Materials%20Price%20Risk) - The company is exposed to price risk from raw materials in domestic upholstery manufacturing, primarily wood, fabric, and petroleum-based foam products[123](index=123&type=chunk) - A shortage of Russian Birch plywood, a key material for one division, has led to finding alternative, higher-cost sources[123](index=123&type=chunk) [Currency Risk](index=29&type=section&id=Currency%20Risk) - The company generally negotiates firm, USD-denominated pricing with foreign suppliers for imported products, typically for at least one year[124](index=124&type=chunk) - A decline in the U.S. Dollar's value could increase imported product prices beyond negotiated periods, potentially impacting sales volume or profit margins[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures as of May 1, 2022, confirming their effectiveness, and notes the exclusion of the newly acquired Sunset West operations from the scope of the Sarbanes-Oxley Section 404 report for the current fiscal year [Evaluation of Disclosure Controls and Procedures](index=30&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that disclosure controls and procedures were effective as of May 1, 2022, providing reasonable assurance for timely and accurate information disclosure[126](index=126&type=chunk) [Changes in Internal Control over Financial Reporting](index=30&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - Sunset West's operations will be excluded from the scope of the Sarbanes-Oxley Section 404 report on internal controls for the year ending January 29, 2023, as permitted by SEC guidance[127](index=127&type=chunk) - No other material changes in internal control over financial reporting occurred during the fiscal quarter ended May 1, 2022[128](index=128&type=chunk) PART II. OTHER INFORMATION [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Form 10-Q, including corporate governance documents, certifications, and interactive data files - Exhibits include Articles of Incorporation, Bylaws, Rule 13a-14(a) Certifications, Rule 13a-14(b) Certification, and Interactive Data Files (Inline XBRL)[131](index=131&type=chunk) [Signature](index=32&type=section&id=Signature) This section contains the official signature block, confirming the due authorization and filing of the report by the registrant - The report was signed on June 9, 2022, by Paul A. Huckfeldt, Chief Financial Officer and Senior Vice President – Finance and Accounting[133](index=133&type=chunk)[135](index=135&type=chunk)

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 2023 were reported at $147 million, a decrease of $15.5 million or 9.5% compared to the same period last year, primarily due to sales declines in the Home Meridian and Hooker Branded segments caused by supply chain disruptions [4][5] - Net income for the quarter was $3.2 million or $0.26 per diluted share, down from $9.4 million or $0.78 per diluted share a year ago [5] Business Line Data and Key Metrics Changes - **Hooker Branded Segment**: Net sales decreased by $9 million or 17.5% year-over-year, driven by casegoods inventory unavailability due to factory shutdowns in Vietnam [12] - **Home Meridian Segment**: Net sales decreased by $22 million or 26% compared to the prior year, impacted by supply chain disruptions and the exit from the unprofitable Clubs channel [15] - **Domestic Upholstery Segment**: Continued strong performance with net sales increasing by $15.8 million or 62% year-over-year, attributed to strong sales at Bradington Young, Sam Moore, and Shenandoah, along with the addition of Sunset West's sales [17] Market Data and Key Metrics Changes - Backlogs at the end of Q1 2023 were reported at 283 million, slightly up from 280 million a year ago, indicating sustained demand despite recent order cancellations [29] - Order backlogs in the Home Meridian segment decreased due to the exit from the Clubs channel but remained about 50% higher than pre-pandemic levels [16] Company Strategy and Development Direction - The company is focusing on a leaner portfolio targeting profitable channels and products, with the acquisition of Sunset West expected to provide significant long-term growth opportunities in the outdoor furnishings market [10] - Strategic initiatives include a program called Portfolio aimed at expanding the customer base and increasing e-commerce business, as well as relocating showrooms to enhance visibility and sales potential [39] Management's Comments on Operating Environment and Future Outlook - Management noted a leveling off of demand with incoming orders stabilizing above fiscal 2020 levels, and backlogs remain sizable to support sales targets for upcoming quarters [22] - The company remains optimistic about the housing market, citing strong employment levels and generational trends favoring furniture purchases, despite concerns over inflation and interest rates [23][51] Other Important Information - Cash and cash equivalents stood at $10 million at the end of the quarter, down from $69 million at year-end, primarily due to increased inventory and acquisition costs [18][19] - A dividend of $0.20 per share was declared, representing about a 4.5% yield, and a share repurchase authorization of up to $20 million was approved [20] Q&A Session Summary Question: Can you provide consolidated backlog numbers at the end of the quarter? - Backlog at the end of the first quarter this year was 283 million, compared to 280 million this time last year [29] Question: Are order cancellations seen only on the HMI side? - Cancellations have mostly occurred on the HMI side, primarily affecting orders planned further out due to changing lead times [30] Question: How much revenue was impacted by the acquisition of Sunset West? - The acquisition of Sunset West contributed approximately $7.5 million to revenue [33] Question: What drove the increase in SG&A expenses? - SG&A was 19% higher than last year due to lower volume, the addition of Sunset West, and increased labor costs [34] Question: How should we think about HMI sales and profitability for the back half of the year? - Management feels optimistic about HMI due to the elimination of previous headwinds and expects to manage day-to-day business effectively [37] Question: Can you elaborate on the strategic initiatives for organic growth? - The company is launching a program to target a broader customer base and enhance e-commerce capabilities, with plans to relocate showrooms for better exposure [38][39] Question: How have price increases affected different market segments? - Price increases have been more significant in lower price points, with freight costs driving much of the increase in the Hooker branded segment [50] Question: What is the outlook for the housing market? - Management remains confident in the housing market despite potential slowdowns, noting a backlog of homes and continued consumer interest [51][53]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended January 30, 2022 Commission file number 000-25349 HOOKER FURNISHINGS CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) Virginia 54-0251350 440 East Commonwealth Boulevard, Martinsville, VA 24112 (Address of ...

Hooker Furnishings Corporation (NASDAQ:HOFT) Q4 2022 Earnings Conference Call April 13, 2022 9:00 AM ET Company Participants Jeremy Hoff - Chief Executive Officer and Director Paul Huckfeldt - Vice President, Finance and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Sandy Mehta - Evaluate Research Barry Haimes - Sage Asset Management John Deysher - Pinnacle Jeff Geygan - Global Value Investment Operator Greetings, ladies and gentlemen, and welcome to the Hooke ...

Start Time: 09:00 January 1, 0000 9:35 AM ET Hooker Furnishings Corporation (NASDAQ:HOFT) Q3 2022 Earnings Conference Call December 09, 2021, 09:00 AM ET Company Participants Jeremy Hoff - CEO Paul Huckfeldt - SVP, Finance and Accounting and CFO Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Sandy Mehta - Evaluate Research John Deysher - Pinnacle Value Fund Jeff Geygan - Global Value Investment Operator Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Hooke ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended October 31, 2021 Commission file number 000-25349 HOOKER FURNISHINGS CORPORATION (Exact name of registrant as specified in its charter) Virginia 54-0251350 (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) 440 East Commonwealth Boulevard, Martinsville, VA 24112 (A ...