We have rated Hooker a buy since February 2007. The company's record of earnings growth, its improvement in net income and its solid financial position all contribute to our rating. While revenue dropped 9.5% year over year for the fourth quarter of fiscal 2008, Hooker improved EPS by 35% during the same period. Net income also increased in the fourth quarter, growing 30% to $4.6 million. Finally, the company's very low debt-to-equity ratio of 0.06 implies that there has been successful management of debt.
Looking forward to fiscal 2009, management expects business to remain challenging, but feels that Hooker has proved its ability to stay profitable in the current economic environment. The company is implementing numerous efforts to grow its business, including opening a West Coast distribution center and developing new product categories through recent acquisitions. The company is also attempting to eliminate waste, create value, and operate more efficiently in all its processes.
Bear in mind that Hooker's future results could be affected by the cyclical nature of the furniture industry, risks associated with the cost of imported goods, and transportation and distribution disruptions, among other risk factors.