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TheStreet Open House

Hooker Furniture Doubles Net Income On Higher Sales In Fiscal 2014 First Quarter

The Company had no long-term debt at May 5, 2013 and had $13.2 million available on its $15.0 million revolving credit facility, net of $1.8 million reserved for standby letters of credit.

Business Outlook

"With all the positive news surrounding housing and rising consumer confidence, it would be hard not to be optimistic about our prospects," said Toms. "We're bullish about our future, both with our core business and our new ventures. Internally, we believe we are well positioned to capitalize on the improving economy as we ramp up our manufacturing facilities, maintain a good inventory position and enjoy our strongest product line in several years. During the month of May, we have seen much stronger demand for our product than a year ago, which we attribute to the vitality of our freshened line up and better retail conditions. Although we are entering what is traditionally the slowest season of the year for furniture, we have considerable momentum."

Dividends

At its June 3, 2013 meeting, the Company's 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.

Conference Call Details

Hooker Furniture will present its fiscal 2014 first quarter results via teleconference and live internet web cast on Wednesday morning, June 5 th, 2013 at 9:00 AM Eastern Time. The dial-in number for domestic callers is 877-665-2466, and 678-894-3031 is the number for international callers. The call will be simultaneously web cast and archived for replay on the Company's web site at www.hookerfurniture.com in the Investor Relations section.

Ranked among the nation's top 10 largest publicly traded furniture sources based on 2011 shipments to U.S. retailers, Hooker Furniture Corporation is an 89-year old residential wood, metal and upholstered furniture resource. Major casegoods product categories include home entertainment, home office, accent, dining, and bedroom furniture in the upper-medium price points sold under the Hooker Furniture brand. Hooker's residential upholstered seating companies include Bradington-Young, a specialist in upscale motion and stationary leather furniture, and Sam Moore Furniture, a specialist in upscale occasional chairs, settees, sofas and sectional seating with an emphasis on cover-to-frame customization. Please visit our websites at www.hookerfurniture.com , www.bradington-young.com , and www.sammoore.com .

Certain statements made in this report, other than those based on historical facts, are forward-looking statements. These statements reflect our reasonable judgment with respect to future events and typically can be identified by the use of forward-looking terminology such as "believes," "expects," "projects," "intends," "plans," "may," "will," "should," "would," "could" or "anticipates," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Those risks and uncertainties include but are not limited to: (1) 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; (2) 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; (3) disruptions affecting our Henry County, Virginia warehouses and corporate headquarters facilities; (4) price competition in the furniture industry; (5) changes in domestic and international monetary policies and fluctuations in foreign currency exchange rates affecting the price of our imported products and raw materials; (6) 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; (7) risks associated with the cost of imported goods, including fluctuation in the prices of purchased finished goods and transportation and warehousing costs; (8) adverse political acts or developments in, or affecting, the international markets from which we import products, including duties or tariffs imposed on those products; (9) 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; (10) our ability to successfully implement our business plan to increase sales and improve financial performance; (11) the direct and indirect costs associated with the implementation of our Enterprise Resource Planning system, including costs resulting from unanticipated disruptions to our business; (12) achieving and managing growth and change, and the risks associated with new business lines, acquisitions, restructurings, strategic alliances and international operations; (13) risks associated with distribution through third-party retailers, such as non-binding dealership arrangements; (14) capital requirements and costs; (15) competition from non-traditional outlets, such as catalog and internet retailers and home improvement centers; (16) 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 (17) 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. Any forward-looking statement that we make speaks only as of the date of that statement, and we undertake no obligation, except as required by law, to update any forward-looking statements whether as a result of new information, future events or otherwise.

Table I
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
   
  Thirteen Weeks Ended
  May 5, 2013 April 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  $ 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
 
Table II
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 (Unaudited)
     
  Thirteen Weeks Ended
  May 5, 2013 April 29, 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
     
 
Table III
HOOKER FURNITURE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, including share data)
     
  May 5, 2013 February 3, 2013
  (unaudited)  
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  4,423  4,494
Other assets  342  216
Total assets  $ 152,760  $ 155,823
     
Liabilities and Shareholders' Equity    
Current Liabilities    
Trade accounts payable  $ 9,224  $ 11,620
Accrued salaries, wages and benefits  2,604  3,316
Other accrued expenses  1,241  2,531
Total current liabilities  13,069  17,467
Deferred compensation  7,557  7,311
Total liabilities  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
 
 Table IV 
 HOOKER FURNITURE CORPORATION AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
 (In thousands) 
 (Unaudited) 
  Thirteen Weeks Ended
  May 5, 2013 April 29, 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  26,342  40,355
Cash and cash equivalents at the end of the period  $ 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 activities  $ 3,993  $ 11,061
CONTACT:  For more information, contact:
          Paul B. Toms Jr.
          Chairman and Chief Executive Officer 
          Phone: (276) 632-2133, or
          Paul Huckfeldt, Vice President, Chief Financial Officer
          Phone: (276) 632-2133, or
          Kim D. Shaver 
          Vice President, Marketing Communications
          Phone: (336) 454-7088

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