Exhibit 99.1
PRESS RELEASE
For more information, contact:
Paul B. Toms Jr.,
Chairman & Chief Executive Officer
Phone: (276) 632-2133, or
E. Larry Ryder,
Executive Vice President & Chief Financial Officer
Phone: (276) 632-2133, or
R. Gary Armbrister,
Chief Accounting Officer
Phone: (276) 632-2133
For immediate release: June 27, 2003
Hooker Furniture Reports Correction To Second Quarter Earnings
Martinsville, Va.: Hooker Furniture (Nasdaq-SCM: HOFT) today announced that it understated net income for its second quarter ended May 31, 2003 by approximately $155,000, or $.03 per share, in its release dated June 20, 2003. The correction reflects an overstatement of the Company’s interest expense for the quarter of approximately $250,000. Net income for the quarter as corrected is $2.6 million, or $0.45 per share. Net income for the first six months of fiscal 2003 as corrected is $7.6 million, or $1.33 per share.
Ranked among the nation’s top 15 public furniture manufacturers in sales, Hooker Furniture is a 79-year old producer and importer of wall and entertainment systems, home office, occasional, dining, bedroom and upholstered leather furniture with approximately 2220 employees. The Company has 10 manufacturing facilities, a distribution center and a warehouse located in Virginia and North Carolina. Plant locations include Cherryville, Hickory, Pleasant Garden, Kernersville, Maiden, and Woodleaf, N.C. and Martinsville and Roanoke, VA. The Company’s stock is listed on the Nasdaq SmallCap Market under the symbol HOFT, and closed on June 26, 2003 at $27.30 per share. Please visit us on the World Wide Web atwww.hookerfurniture.com andwww.bradington-young.com.
-Revised Tables Follow-
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TABLE I
HOOKER FURNITURE CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended May 31, | Six Months Ended May 31, | |||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||
Net sales | $ | 80,115 | $ | 62,253 | $ | 154,590 | $ | 123,182 | ||||
Cost of sales | 59,473 | 46,231 | 113,426 | 91,760 | ||||||||
Gross profit | 20,642 | 16,022 | 41,164 | 31,422 | ||||||||
Selling and administrative expenses | 14,401 | 10,690 | 26,422 | 20,538 | ||||||||
Restructuring and related asset impairment charge (1) | 1,470 | 1,470 | ||||||||||
Operating income | 4,771 | 5,332 | 13,272 | 10,884 | ||||||||
Other income, net | 86 | 140 | 276 | 308 | ||||||||
Interest expense | 671 | 502 | 1,314 | 1,014 | ||||||||
Income before taxes | 4,186 | 4,970 | 12,234 | 10,178 | ||||||||
Income taxes | 1,591 | 1,887 | 4,648 | 3,866 | ||||||||
Net income | $ | 2,595 | $ | 3,083 | $ | 7,586 | $ | 6,312 | ||||
Earnings per share: | ||||||||||||
Basic and diluted | $ | .45 | $ | .55 | $ | 1.33 | $ | 1.12 | ||||
Weighted average shares outstanding | 5,750 | 5,636 | 5,724 | 5,628 | ||||||||
| (1) | In May 2003, the Company recorded one-time pretax charge of $1.5 million ($911,000 after tax, or $0.16 per share) for severance and related asset impairment in anticipation of the August 2003 closing of its Kernersville, NC facility, affecting approximately 270 employees. |
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TABLE II
HOOKER FURNITURE CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
May 31, 2003(2) | May 31, 2002 | November 30, 2002 | |||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 3,211 | $ | 19,076 | $ | 2,316 | |||
Trade receivables less allowances of$792, $674, and $800 | 36,966 | 27,928 | 33,771 | ||||||
Inventories | 60,382 | 29,948 | 54,959 | ||||||
Prepaid expenses and other | 2,566 | 3,738 | 2,225 | ||||||
Total current assets | 103,125 | 80,690 | 93,271 | ||||||
Property, plant, and equipment, net | 56,529 | 49,256 | 49,577 | ||||||
Assets held for sale (3) | 740 | ||||||||
Intangibles and other assets | 16,042 | 5,941 | 7,033 | ||||||
Total assets | $ | 176,436 | $ | 135,887 | $ | 149,881 | |||
Liabilities and Shareholders’ Equity | |||||||||
Current liabilities | |||||||||
Trade accounts payable | $ | 3,800 | $ | 3,326 | $ | 5,427 | |||
Accrued salaries, wages, and benefits | 6,730 | 5,404 | 6,022 | ||||||
Accrued income taxes | 3,169 | ||||||||
Other accrued expenses | 3,089 | 4,505 | 4,372 | ||||||
Current maturities of long-term debt | 6,800 | 2,794 | 2,905 | ||||||
Total current liabilities | 20,419 | 16,029 | 21,895 | ||||||
Long-term debt, less current maturities | 43,419 | 22,797 | 21,798 | ||||||
Other long-term liabilities | 4,882 | 4,056 | 5,144 | ||||||
Total liabilities | 68,720 | 42,882 | 48,837 | ||||||
Common stock held by ESOP (4) | 9,961 | ||||||||
Shareholders’ equity | 107,716 | 83,044 | 101,044 | ||||||
Total liabilities and shareholders’ equity | $ | 176,436 | $ | 135,887 | $ | 149,881 | |||
| (2) | In January 2003, the Company completed its acquisition of substantially all of the assets of Cherryville, N.C.-based leather seating specialist Bradington-Young, LLC. The Company acquired those assets for an aggregate consideration of $26.7 million less approximately $4.1 million in assumed debt. The consolidated balance sheet as of May 31, 2003 includes those assets and liabilities. |
| (3) | In connection with the closing of its Kernersville, NC plant, the Company has reclassified the facility’s real property to “assets held for sale”. The carrying value of these assets approximates fair value less estimated selling expenses. |
| (4) | In June 2002, Hooker Furniture common stock began trading on the Nasdaq SmallCap Market under the symbol HOFT. As a result, the Company is no longer obligated to repurchase shares distributed to participants in the Company’s ESOP. Consequently, amounts representing shares that were previously subject to the repurchase obligation and reflected in the Company’s balance sheets as “common stock held by ESOP” have been reclassified to “shareholders’ equity”. |
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TABLE III
HOOKER FURNITURE CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Six Months Ended | ||||||||
| May 31, 2003 | May 31 2002 | |||||||
Cash flows from operating activities | ||||||||
Cash received from customers. | $ | 157,231 | $ | 124,878 | ||||
Cash paid to suppliers and employees | (139,891 | ) | (104,508 | ) | ||||
Income taxes paid, net | (7,965 | ) | (2,656 | ) | ||||
Interest paid, net | (1,135 | ) | (843 | ) | ||||
Net cash provided by operating activities | 8,240 | 16,871 | ||||||
Cash flows from investing activities | ||||||||
Purchase of property, plant, and equipment, net of disposals | (2,451 | ) | (3,121 | ) | ||||
Acquisition of Bradington-Young, net of cash acquired | (22,140 | ) | ||||||
Sale of property | 17 | |||||||
Net cash used in investing activities | (24,591 | ) | (3,104 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from long-term debt | 76,319 | |||||||
Payments on long-term debt (including$4.1 million assumed in the acquisition) | (54,876 | ) | (1,320 | ) | ||||
Payment to terminate interest rate swap agreement | (3,001 | ) | ||||||
Cash dividends paid | (1,196 | ) | (752 | ) | ||||
Purchase and retirement of common stock | (545 | ) | ||||||
Net cash provided by (used in) financing activities | 17,246 | (2,617 | ) | |||||
Net increase in cash | 895 | 11,150 | ||||||
Cash and cash equivalents at beginning of year | 2,316 | 7,926 | ||||||
Cash and cash equivalents at end of period | $ | 3,211 | $ | 19,076 | ||||
Reconciliation of net income to net cash provided by operating activities | ||||||||
Net income | $ | 7,586 | $ | 6,312 | ||||
Depreciation and amortization | 4,221 | 3,805 | ||||||
Non-cash ESOP cost | 1,182 | 696 | ||||||
Restructuring and related asset impairment charge | 1,470 | |||||||
Loss (gain) on disposal of property | 5 | (5 | ) | |||||
Changes in assets and liabilities, net of effects of acquisition: | ||||||||
Trade receivables | 2,367 | 1,502 | ||||||
Inventories | 701 | 3,574 | ||||||
Income tax recoverable | (148 | ) | 1,262 | |||||
Prepaid expenses and other assets | (1,013 | ) | (1,076 | ) | ||||
Trade accounts payable | (3,593 | ) | (762 | ) | ||||
Accrued salaries, wages, and benefits | (1,290 | ) | 615 | |||||
Accrued income taxes | (3,169 | ) | ||||||
Other accrued expenses | (2,768 | ) | 1,384 | |||||
Other long-term liabilities | 2,689 | (436 | ) | |||||
Net cash provided by operating activities | $ | 8,240 | $ | 16,871 | ||||
