Virginia
|
54-0251350
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
Title of Each Class |
Name of Each Exchange
on Which Registered
|
Common Stock, no par value | NASDAQ Global Select Market |
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
|
10,752,982
|
(Class of common stock)
|
(Number of shares)
|
Part I
|
Page
|
|
Item 1.
|
3
|
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Item 1A.
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10
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Item 1B.
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15
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Item 2.
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15
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Item 3.
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16
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Item 4.
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16
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16
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Part II
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||
Item 5.
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17
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Item 6.
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19
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Item 7.
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20
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Item 7A.
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39
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Item 8.
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39
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Item 9.
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39
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Item 9A.
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40
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Item 9B.
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41
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Part III
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Item 10.
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42
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Item 11.
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42
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Item 12.
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42
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Item 13.
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42 | |
Item 14.
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42
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Part IV
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Item 15.
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43
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45
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F-1
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§
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To offer world-class style, quality and product value as a complete residential and contract wood, metal and upholstered furniture resource through excellence in product design, manufacturing, global sourcing, marketing, logistics, sales and customer service.
|
§
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To be an industry leader in sales growth and profitability performance, providing an outstanding investment for our shareholders and contributing to the well-being of our customers, employees, suppliers and community.
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§
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To nurture the relationship-focused, team-oriented and honor-driven corporate culture that has distinguished our company for nearly 90 years.
|
Fiscal Year
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Casegoods segment
|
64 | % | 65 | % | 66 | % | ||||||
Upholstery segment
|
36 | % | 35 | % | 34 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % |
§
|
H Contract- which supplies upholstered seating and casegoods to upscale senior living facilities throughout the country. This division works with designers specializing in the contract industry to provide functional furniture for senior living facilities that meets the style and comfort expectations of today’s retirees; and
|
§
|
Homeware- which features customer-assembled, modular upholstered and casegoods products, as well as home accessories, designed for younger and more mobile furniture customers, marketed direct-to-consumer via the internet. Using patented connectors designed by an experienced furniture engineer and designer, we expect consumers will be able to assemble and disassemble these products in minutes, with no tools or hardware, and move them easily from residence to residence, room to room, or up staircases and elevators in high-rise apartment and condominium complexes. In addition, alternative design elements, arm and leg styles and covers will allow consumers to transform the furnishings as their tastes and life stages evolve.
|
§
|
the ability to offer customized upholstery combinations to the upscale consumer and interior design trade; and
|
§
|
the ability to offer quick four to six-week product delivery of custom products.
|
§
|
consumer confidence;
|
§
|
availability of consumer credit;
|
§
|
energy and other commodity prices; and
|
§
|
housing and mortgage markets
;
|
§
|
fashion trends;
|
§
|
disposable income; and
|
§
|
household formation and turnover.
|
§
|
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;
|
§
|
our ability to successfully implement our business plan to increase sales and improve financial performance;
|
§
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the cost and difficulty of marketing and selling our products in foreign markets;
|
§
|
disruptions involving our vendors or the transportation and handling industries, particularly those affecting imported products from China, 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;
|
§
|
when or whether our new business initiatives become profitable;
|
§
|
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;
|
§
|
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;
|
§
|
the interruption, inadequacy, security failure or integration failure of our information systems or information technology infrastructure, related service providers or the internet;
|
§
|
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;
|
§
|
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 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, among other things, levels of declines in consumer confidence
,
amounts of discretionary income available for furniture purchases and the availability of consumer credit;
|
§
|
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: and
|
§
|
higher than expected employee medical costs.
|
§
|
A disruption in supply from China or from our most significant Chinese supplier could adversely affect our ability to timely fill customer orders for these products and decrease our sales, earnings and liquidity.
|
§
|
We are subject to changes in foreign government regulations and in the political, social and economic climates of the countries from which we source our products
.
|
§
|
Our dependence on non-U.S. suppliers could, over time, adversely affect our ability to service customers
.
|
§
|
Our inability to accurately forecast demand for our imported products could cause us to purchase too much, too little or the wrong mix of inventory.
|
§
|
Changes in the value of the U.S. Dollar compared to the currencies for the countries from which we obtain our products could adversely affect our sales, earnings and liquidity.
|
§
|
Supplier transitions, including cost or quality issues, could result in longer lead times and shipping delays.
|
§
|
significant capital and operating expenditures;
|
§
|
disruptions to our domestic and international supply chains;
|
§
|
inability to fill customer orders accurately and on a timely basis, or at all;
|
§
|
inability to process payments to suppliers, vendors and associates accurately and in a timely manner;
|
§
|
disruption of our internal control structure;
|
§
|
inability to fulfill our SEC or other governmental reporting requirements in a timely or accurate manner;
|
§
|
inability to fulfill federal, state and local tax filing requirements in a timely or accurate manner; and
|
§
|
increased demands on management and staff time to the detriment of other corporate initiatives.
|
§
|
A significant decrease in the market value of a long-lived asset;
|
§
|
A significant adverse change in the extent or manner in which a long-lived asset group is being used, or in its physical condition;
|
§
|
A significant adverse change in the legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator;
|
§
|
An accumulation of costs significantly in excess of the amount originally expected to acquire or construct a long-lived asset;
|
§
|
A current period operating or cash flow loss or a projection or forecast that demonstrates continuing losses associated with a long-lived asset’s use; and
|
§
|
A current expectation that more-likely-than-not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
|
§
|
the continued correct selection and successful execution and refinement of our overall business strategies and business systems for designing, marketing, sourcing, distributing and servicing our products;
|
§
|
good decisions about product mix and inventory availability targets;
|
§
|
the enhancement of relationships and business systems that allow us to continue to work more efficiently and effectively with our global sourcing suppliers; and
|
§
|
the right mix between domestic manufacturing and foreign sourcing for upholstered products.
|
§
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identify and adapt to trends in retailing; and
|
§
|
develop strategies to sell in the channels in which our consumers prefer to shop.
|
Location |
|
Segment Use
|
Primary Use
|
Approximate Size in Square Feet
|
Owned or Leased
|
||||
Martinsville, Va. |
Both segments
|
Corporate Headquarters
|
43,000 |
Owned
|
|||||
Martinsville, Va.
|
Both segments
|
Distribution and Imports
|
580,000 |
Owned
|
|||||
Martinsville, Va.
|
Casegoods
|
Customer Support Center
|
146,000 |
Owned
|
|||||
Martinsville, Va.
|
Both segments
|
Distribution
|
628,000 |
Leased (1)
|
|||||
High Point, N.C.
|
Both segments
|
Showroom
|
80,000 |
Leased (2)
|
|||||
Cherryville, N.C. | Upholstery | Manufacturing Supply Plant | 53,000 | Owned (3) | |||||
Hickory, N.C.
|
Upholstery
|
Manufacturing
|
91,000 |
Owned (3)
|
|||||
Hickory, N.C.
|
Upholstery
|
Manufacturing and Offices
|
36,400 |
Leased (3) (4)
|
|||||
Bedford, Va.
|
Upholstery
|
Manufacturing and Offices
|
327,000 |
Owned (5)
|
(1) Lease expires March 31, 2021.
|
(2) Lease expires October 31, 2016.
|
(3) Comprise the principal properties of Bradington-Young LLC.
|
(4) Lease expires December 15, 2014 and provides for 2 one-year extensions at our election.
|
(5) Comprise the principal properties of Sam Moore Furniture LLC.
|
Name
|
Age
|
Position
|
Year Joined Company
|
|||
Paul B. Toms, Jr.
|
59
|
Chairman and Chief Executive Officer
|
1983
|
|||
Paul A. Huckfeldt
|
56
|
Chief Financial Officer and
|
2004
|
|||
Senior Vice President - Finance and Accounting
|
||||||
Michael W. Delgatti, Jr.
|
60
|
President - Hooker Furniture Corporation
|
2009
|
|||
Anne M. Jacobsen
|
52
|
Senior Vice President-Administration
|
2008
|
Sales Price Per Share
|
Dividends
|
|||||||||||
High
|
Low
|
Per Share
|
||||||||||
November 4, 2013 - February 2, 2014
|
$ | 17.81 | $ | 15.01 | $ | 0.10 | ||||||
August 5, - November 3, 2013
|
17.20 | 13.35 | 0.10 | |||||||||
May 6, - August 4, 2013
|
18.00 | 15.06 | 0.10 | |||||||||
February 4 - May 5, 2013
|
18.30 | 13.93 | 0.10 | |||||||||
October 29, 2012 - February 3, 2013
|
$ | 15.19 | $ | 13.27 | $ | 0.10 | ||||||
July 30, - October 28, 2012
|
13.77 | 11.35 | 0.10 | |||||||||
April 30, - July 29, 2012
|
12.82 | 10.01 | 0.10 | |||||||||
January 30 - April 29, 2012
|
13.99 | 11.37 | 0.10 |
(1)
|
The graph shows the cumulative total return on $100 invested at the beginning of the measurement period in our common stock or the specified index, including reinvestment of dividends.
|
(2)
|
The Russell 2000
®
Index, prepared by Frank Russell Company, measures the performance of the 2,000 smallest companies out of the 3,000 largest U.S. companies based on total market capitalization.
|
(3)
|
Household Furniture Index as prepared by Zacks Investment Research, Inc. consists of companies under SIC Codes 2510 and 2511, which includes home furnishings companies that are publically traded in the United States or Canada. At February 2, 2014, Zacks Investment Research, Inc. reported that these two SIC Codes consisted of Bassett Furniture Industries, Inc., Dorel Industries, Inc., Ethan Allen Interiors, Inc., Flexsteel Industries, Inc., Furniture Brands International, Inc., Hooker Furniture Corporation, La-Z-Boy, Inc., Leggett & Platt, Inc., Natuzzi SPA-ADR, Nova Lifestyle, Inc., Select Comfort Corporation, Stanley Furniture Company, Inc. and Tempur-Pedic International, Inc.
|
Fiscal Year Ended (1)
|
||||||||||||||||||||
February 2,
|
February 3,
|
January 29,
|
January 30,
|
January 31,
|
||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||
Net sales
|
$ | 228,293 | $ | 218,359 | $ | 222,505 | $ | 215,429 | $ | 203,347 | ||||||||||
Cost of sales
|
173,568 | 165,813 | 173,642 | 168,547 | 154,931 | |||||||||||||||
Gross profit
|
54,725 | 52,546 | 48,863 | 46,882 | 48,416 | |||||||||||||||
Selling and adminstrative expenses (2)
|
42,222 | 39,606 | 40,375 | 41,022 | 41,956 | |||||||||||||||
Restructuring charges (3)
|
- | - | - | 1,403 | - | |||||||||||||||
Goodwill and intangible asset impairment charges (4)
|
- | - | 1,815 | 396 | 1,274 | |||||||||||||||
Operating income
|
12,503 | 12,940 | 6,673 | 4,061 | 5,186 | |||||||||||||||
Other income (expense), net
|
(35 | ) | 53 | 272 | 108 | (99 | ) | |||||||||||||
Income before income taxes
|
12,468 | 12,993 | 6,945 | 4,169 | 5,087 | |||||||||||||||
Income taxes
|
4,539 | 4,367 | 1,888 | 929 | 2,079 | |||||||||||||||
Net income
|
7,929 | 8,626 | 5,057 | 3,240 | 3,008 | |||||||||||||||
Per Share Data:
|
||||||||||||||||||||
Basic and diluted earnings per share
|
$ | 0.74 | $ | 0.80 | $ | 0.47 | $ | 0.30 | $ | 0.28 | ||||||||||
Cash dividends per share
|
0.40 | 0.40 | 0.40 | 0.40 | 0.40 | |||||||||||||||
Net book value per share (5)
|
12.57 | 12.19 | 11.78 | 11.78 | 11.86 | |||||||||||||||
Weighted average shares outstanding (basic)
|
10,722 | 10,745 | 10,762 | 10,757 | 10,753 | |||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 23,882 | $ | 26,342 | $ | 40,355 | $ | 16,623 | $ | 37,995 | ||||||||||
Trade accounts receivable
|
29,393 | 28,272 | 25,807 | 27,670 | 25,894 | |||||||||||||||
Inventories
|
49,016 | 49,872 | 34,136 | 57,438 | 36,176 | |||||||||||||||
Working capital
|
94,142 | 92,200 | 89,534 | 89,297 | 87,894 | |||||||||||||||
Total assets
|
155,481 | 155,823 | 149,171 | 150,411 | 149,099 | |||||||||||||||
Shareholders' equity
|
134,803 | 131,045 | 127,113 | 126,770 | 127,592 |
(1)
|
Our fiscal years end on the Sunday closest to January 31. The fiscal years presented above all had 52 weeks, except for the fiscal year ended February 3, 2013, which had 53 weeks.
|
(2)
|
Selling and administrative expenses for fiscal 2014 include $2.1 million of startup costs
pre-tax, ($1.4 million, or $0.13 per share after tax)
for our H Contract and Homeware business initiatives.
|
(3)
|
In fiscal 2011, we closed facilities in order to consolidate our domestic leather upholstered furniture operations. As a result, we recorded $1.4 million pretax ($874,000 after tax, or $0.08 per share), principally for severance and asset impairment.
|
(4)
|
Based on our annual impairment analyses, we recorded the following intangible asset impairment charges:
|
a)
|
in fiscal 2012, $1.8 million pretax ($1.1 million after tax or $0.10 per share) on our Bradington-Young trade name;
|
b)
|
in fiscal 2011, $396,000 pretax ($247,000 after tax or $0.02 per share) on our Opus Designs by Hooker Furniture trade name; and
|
c)
|
in fiscal 2010, $661,000 pretax ($412,000 after tax, or $0.04 per share) on our Opus Designs by Hooker Furniture trade name and $613,000 pretax ($382,000 after tax, or $0.04 per share) on our Bradington-Young trade name.
|
(5)
|
Net book value per share is derived by dividing “shareholders’ equity” by the number of common shares issued and outstanding, excluding unvested restricted shares, all determined as of the end of each fiscal period.
|
§
|
All of our recent public filings made with the Securities and Exchange Commission (“SEC”). Our public filings made with the SEC are available, without charge, at www.sec.gov and at http://investors.hookerfurniture.com;
|
§
|
The forward looking statements contained in Item 1 of this report, which describe the significant risks and uncertainties that could cause actual results to differ materially from those made in any forward-looking statements we make in this report, including those contained in this section of our annual report on Form 10-K;
|
§
|
The company-specific risks found in Item 1A “Risk Factors” of this report on Form 10-K. This section contains critical information regarding significant risks and uncertainties that we face. If any of these risks materialize, our business, financial condition and future prospects could be adversely impacted; and
|
§
|
Our commitments and contractual obligations and off-balance sheet arrangements described on page 31 and in Note 17 on page F-28 of this report. These sections describe commitments, contractual obligations and off-balance sheet arrangements, some of which are not reflected in our consolidated financial statements.
|
§
|
fifty-two week period that began February 4, 2013 and ended on February 2, 2014 (fiscal 2014);
|
§
|
fifty-three week period that began January 30, 2012 and ended on February 3, 2013 (fiscal 2013); and
|
§
|
fifty-two week period that began January 31, 2011 and ended on January 29, 2012 (fiscal 2012).
|
§
|
H Contract- which supplies upholstered seating and casegoods to upscale senior living facilities throughout the country; and
|
§
|
Homeware- which features customer-assembled, modular upholstered and casegoods products, as well as home accessories, designed for younger and more mobile furniture customers, marketed direct-to-consumer via the internet.
|
§
|
consumer confidence;
|
§
|
availability of consumer credit;
|
§
|
energy and other commodity prices; and
|
§
|
housing and mortgage markets
;
|
§
|
fashion trends;
|
§
|
disposable income;
|
§
|
household formation and turnover; and
|
§
|
Consolidated net sales increased, primarily due to higher average selling prices in both operating segments, partially offset by higher discounting and returns and allowances in our casegoods segment and five fewer shipping days in fiscal 2014 than in fiscal 2013.
|
§
|
Consolidated gross profit increased in absolute terms, due primarily to increased sales volume in both segments, but was essentially flat as a percentage of net sales.
|
§
|
Consolidated selling and administrative expenses increased in both absolute terms and as a percentage of net sales primarily due to start-up costs for our H Contract and Homeware business initiatives and a number of other factors such as higher marketing and professional expenses which are discussed in greater detail below ; and
|
§
|
Our upholstery segment nearly doubled operating profitability, primarily due to improvements in Bradington-Young’s domestic leather operations due to increased sales due to higher selling prices, lower cost of sales due to improved material utilization and lower selling and administrative expenses due to lower marketing related costs.
|
Fifty-two
|
Fifty-three
|
Fifty-two
|
||||||||||
weeks ended
|
weeks ended
|
weeks ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of sales
|
76.0 | 75.9 | 78.0 | |||||||||
Gross profit
|
24.0 | 24.1 | 22.0 | |||||||||
Selling and administrative expenses
|
18.5 | 18.1 | 18.1 | |||||||||
Intangible asset impairment charges
|
- | - | 0.8 | |||||||||
Operating income
|
5.5 | 5.9 | 3.0 | |||||||||
Other income, net
|
0.0 | 0.1 | 0.1 | |||||||||
Income before income taxes
|
5.5 | 6.0 | 3.1 | |||||||||
Income taxes
|
2.0 | 2.0 | 0.8 | |||||||||
Net income
|
3.5 | 4.0 | 2.3 |
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change | |||||||||||||||||||||
% Net Sales
|
% Net Sales
|
|||||||||||||||||||||||
Casegoods
|
$
|
145,266
|
63.6
|
%
|
$
|
141,064
|
64.6
|
%
|
$
|
4,202
|
3.0 | % | ||||||||||||
Upholstery
|
83,027
|
36.4
|
%
|
77,295
|
35.4
|
%
|
$
|
5,732
|
7.4 | % | ||||||||||||||
Consolidated
|
$
|
228,293
|
100.0
|
%
|
$
|
218,359
|
100.0
|
%
|
$
|
9,934
|
4.5 | % |
Unit Volume
|
FY14 % Increase vs. FY13
|
Average Selling Price
|
FY14 % Increase vs. FY13
|
|||||||
Casegoods
|
-3.4 | % |
Casegoods
|
5.9 | % | |||||
Upholstery
|
1.2 | % |
Upholstery
|
6.2 | % | |||||
Consolidated
|
-2.0 | % |
Consolidated
|
6.3 | % |
Average Net Sales Per Shipping Day
|
||||||||||||
Fifty-two weeks ended
|
Fifty-three weeks ended
|
%
|
||||||||||
February 2, 2014
|
February 3, 2013
|
Change
|
||||||||||
Casegoods
|
$ | 581 | $ | 553 | 5.1 | % | ||||||
Upholstery
|
332 | 303 | 9.6 | % | ||||||||
Consolidated
|
$ | 913 | $ | 856 | 6.6 | % | ||||||
Shipping Days
|
250 | 255 |
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 39,332 | 27.1 | % | $ | 38,054 | 27.0 | % | $ | 1,278 | 3.4 | % | ||||||||||||
Upholstery
|
15,393 | 18.5 | % | 14,492 | 18.8 | % | 901 | 6.2 | % | |||||||||||||||
Consolidated
|
$ | 54,725 | 24.0 | % | $ | 52,546 | 24.1 | % | $ | 2,179 | 4.1 | % |
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 28,742 | 19.8 | % | $ | 26,102 | 18.5 | % | $ | 2,640 | 10.1 | % | ||||||||||||
Upholstery
|
13,480 | 16.2 | % | 13,504 | 17.5 | % | (24 | ) | -0.2 | % | ||||||||||||||
Consolidated
|
$ | 42,222 | 18.5 | % | $ | 39,606 | 18.1 | % | $ | 2,616 | 6.6 | % |
§
|
start-up costs for our H Contract and Homeware initiatives, startup costs which were $2.1 million pre-tax, ($1.4 million, or $0.13 per share after tax), in fiscal 2014;
|
§
|
an increase in bad debts expense due to a favorable adjustment in the comparable fiscal 2013 period;
|
§
|
an increase in professional service expense due to increased compliance and regulatory costs;
|
§
|
an increase in salaries and wages due to hiring to fill open positions; and
|
§
|
an increase in selling expenses due to increased marketing and promotional activity.
|
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 10,590 | 7.3 | % | $ | 11,953 | 8.5 | % | $ | (1,363 | ) | -11.4 | % | |||||||||||
Upholstery
|
1,913 | 2.3 | % | 987 | 1.3 | % | 926 | 93.8 | % | |||||||||||||||
Consolidated
|
$ | 12,503 | 5.5 | % | $ | 12,940 | 5.9 | % | $ | (437 | ) | -3.4 | % |
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Consolidated income tax expense
|
$ | 4,539 | 2.0 | % | $ | 4,367 | 2.0 | % | $ | 172 | 3.9 | % | ||||||||||||
Effective Tax Rate
|
36.4 | % | 33.6 | % |
Fifty-two weeks ended
|
Fifty-three weeks ended
|
|||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales |
% Net Sales
|
|||||||||||||||||||||||
Consolidated
|
$ | 7,929 | 3.5 | % | $ | 8,626 | 4.0 | % | $ | (697 | ) | -8.1 | % | |||||||||||
Earnings per share
|
$ | 0.74 | $ | 0.80 |
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 141,064 | 64.6 | % | $ | 147,927 | 66.5 | % | $ | (6,863 | ) | -4.6 | % | |||||||||||
Upholstery
|
77,295 | 35.4 | % | 74,578 | 33.5 | % | $ | 2,717 | 3.6 | % | ||||||||||||||
Consolidated
|
$ | 218,359 | 100.0 | % | $ | 222,505 | 100.0 | % | $ | (4,146 | ) | -1.9 | % |
Unit Volume
|
FY13 % Increase vs. FY12
|
Average Selling Price
|
FY13 % Increase vs. FY12
|
|||||||
Casegoods
|
-19.7 | % |
Casegoods
|
17.8 | % | |||||
Upholstery
|
-4.3 | % |
Upholstery
|
7.9 | % | |||||
Consolidated
|
-15.8 | % |
Consolidated
|
15.7 | % |
Average Net Sales Per Shipping Day
|
||||||||||||
Fifty-three weeks ended
|
%
|
Fifty-two weeks ended
|
||||||||||
February 3, 2013
|
Change
|
January 29, 2012
|
||||||||||
Casegoods
|
$ | 553 | -6.1 | % | $ | 589 | ||||||
Upholstery
|
303 | 1.9 | % | 297 | ||||||||
Consolidated
|
$ | 856 | -3.8 | % | $ | 886 | ||||||
Shipping Days
|
255 | 251 |
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 38,054 | 27.0 | % | $ | 37,550 | 25.4 | % | $ | 504 | 1.3 | % | ||||||||||||
Upholstery
|
14,492 | 18.8 | % | 11,313 | 15.2 | % | 3,179 | 28.1 | % | |||||||||||||||
Consolidated
|
$ | 52,546 | 24.1 | % | $ | 48,863 | 22.0 | % | $ | 3,683 | 7.5 | % |
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 26,102 | 18.5 | % | $ | 26,905 | 18.2 | % | $ | (803 | ) | -3.0 | % | |||||||||||
Upholstery
|
13,504 | 17.5 | % | 13,470 | 18.1 | % | 34 | 0.3 | % | |||||||||||||||
Consolidated
|
$ | 39,606 | 18.1 | % | $ | 40,375 | 18.1 | % | $ | (769 | ) | -1.9 | % |
§
|
increased amounts billed to our imported upholstery division for its share of administrative costs compared to prior periods;
|
§
|
lower contributions expense, due to lower levels of distressed inventory;
|
§
|
lower bad debt expense, due to favorable collections experience;
|
§
|
reduced advertising and sample expenses, due to cost-cutting measures; and
|
§
|
lower sales and design commissions, due to lower net sales.
|
§
|
bonus expense, due to the reversal of an accrual for long-term performance grant awards in the comparable prior-year period;
|
§
|
salary expense, primarily due to an executive promotion and other salary increases; and
|
§
|
fees for professional services, due to additional fees for several corporate initiatives.
|
§
|
salary expense, due to an executive promotion to a corporate position and cost reduction efforts undertaken in fiscal 2012;
|
§
|
benefits expense, due to decreased headcount and lower health claims; and
|
§
|
sample and advertising expenses, due to cost-cutting measures.
|
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Casegoods
|
$ | 11,953 | 8.5 | % | $ | 10,644 | 7.2 | % | $ | 1,309 | 12.3 | % | ||||||||||||
Upholstery
|
987 | 1.3 | % | (3,971 | ) | -5.3 | % | 4,958 | 124.9 | % | ||||||||||||||
Consolidated
|
$ | 12,940 | 5.9 | % | $ | 6,673 | 3.0 | % | $ | 6,267 | 93.9 | % |
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Consolidated income tax expense
|
$ | 4,367 | 2.0 | % | $ | 1,888 | 0.8 | % | $ | 2,479 | 131.4 | % | ||||||||||||
Effective Tax Rate
|
33.6 | % | 27.2 | % |
Fifty-three weeks ended
|
Fifty-two weeks ended
|
|||||||||||||||||||||||
February 3, 2013
|
January 29, 2012
|
$ Change
|
% Change
|
|||||||||||||||||||||
% Net Sales | % Net Sales | |||||||||||||||||||||||
Net Income
|
||||||||||||||||||||||||
Consolidated
|
$ | 8,626 | 4.0 | % | $ | 5,057 | 2.3 | % | $ | 3,569 | 70.6 | % | ||||||||||||
Earnings per share
|
$ | 0.80 | $ | 0.47 |
Balance Sheet and Working Capital
|
||||||||||||
February 2, 2014
|
February 3, 2013
|
$ Change
|
||||||||||
Total Assets
|
$ | 155,481 | $ | 155,823 | $ | (342 | ) | |||||
Cash
|
$ | 23,882 | $ | 26,342 | $ | (2,460 | ) | |||||
Trade Receivables
|
29,393 | 28,272 | 1,121 | |||||||||
Inventories
|
49,016 | 49,872 | (856 | ) | ||||||||
Prepaid Expenses & Other
|
4,758 | 5,181 | (423 | ) | ||||||||
Total Current Assets
|
$ | 107,050 | $ | 109,667 | $ | (2,618 | ) | |||||
Trade accounts payable
|
$ | 7,077 | $ | 11,620 | $ | (4,543 | ) | |||||
Accrued salaries, wages and benefits
|
3,478 | 3,316 | 162 | |||||||||
Other accrued expenses, commissions and deposits
|
2,352 | 2,531 | (180 | ) | ||||||||
Total current liabilities
|
$ | 12,907 | $ | 17,467 | $ | (4,560 | ) | |||||
Net working capital
|
$ | 94,142 | $ | 92,200 | $ | 1,942 | ||||||
Working capital ratio
|
8.3 to 1
|
6.3 to 1
|
§
|
decreased accounts payable due to lower inventory purchases, from our efforts to match inventory levels with projected demand; and decreased accrued expenses due to the timing of income tax payments.
|
§
|
decreased cash balances as we paid down outstanding accounts payable balances; and
|
§
|
decreased inventories from our efforts to match inventory levels with projected demand.
|
Fifty-Two Weeks Ended
|
Fifty-Three Weeks Ended
|
Fifty-Two Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Net cash provided by (used in) operating activities
|
$ | 5,696 | $ | (3,333 | ) | $ | 32,276 | |||||
Net cash used in investing activities
|
(3,855 | ) | (4,623 | ) | (4,229 | ) | ||||||
Net cash used in financing activities
|
(4,301 | ) | (6,057 | ) | (4,315 | ) | ||||||
Net (decrease) increase in cash and cash equivalents
|
$ | (2,460 | ) | $ | (14,013 | ) | $ | 23,732 |
§
|
a maturity date of July 31, 2018;
|
§
|
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 loan agreement);
|
§
|
a quarterly unused commitment fee of 0.20%; 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 domestic 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.
|
Cash Payments Due by Period (In thousands)
|
||||||||||||||||||||
Less than
|
More than
|
|||||||||||||||||||
1 Year
|
1-3 Years
|
3-5 Years
|
5 years
|
Total
|
||||||||||||||||
Deferred compensation payments
(1)
|
$ | 354 | $ | 1,490 | $ | 1,398 | $ | 8,494 | $ | 11,736 | ||||||||||
Operating leases
(2) (3)
|
924 | 939 | 6 | - | 1,869 | |||||||||||||||
Other long-term obligations
(4)
|
734 | 22 | - | - | 756 | |||||||||||||||
Total contractual cash obligations
|
$ | 2,012 | $ | 2,451 | $ | 1,404 | $ | 8,494 | $ | 14,361 |
(1)
|
These amounts represent estimated cash payments to be paid to participants in our supplemental retirement income plan or “SRIP” through fiscal year 2038, which is 15 years after the last current SRIP participant is assumed to have retired. The present value of these benefits (the actuarially derived projected benefit obligation for this plan) was approximately $7.7 million at February 2, 2014 and is shown on our consolidated balance sheets, with $354,000 recorded in current liabilities and $7.3 million recorded in long-term liabilities. In addition, the monthly retirement benefit for each participant, regardless of age, would become fully vested and the present value of that benefit would be paid to each participant in a lump sum upon a change in control of the Company as defined in the plan. See note 11 to the consolidated financial statements beginning on page F-18 for additional information about the SRIP.
|
(2)
|
These amounts represent estimated cash payments due under operating leases for office equipment, warehouse equipment and real estate utilized in our operations. See Item 2 “Properties,” for a description of our leased real estate.
|
(3)
|
On April 1, 2014, we entered into a new, seven-year operating lease for a 628,000 square foot warehouse facility that we currently lease in Henry County, Virginia. We currently occupy approximately 400,000 square feet of this facility. We expect that the new lease will increase the operating lease obligations shown above by the following amounts (in thousands):
|
§
|
Less than 1 Year: $942
|
§
|
1-3 Years: $2,321
|
§
|
3-5 Years: $2,415
|
§
|
More than 5 Years: $2,725
|
(4)
|
These amounts represent estimated cash payments due under various long-term service and support agreements, for items such as warehouse management services, information technology support and human resources related consulting and support.
|
§
|
the expansion of Sam Moore’s product offering to include sofas, sectionals, recliners and ottomans, in addition to the core decorative chair line;
|
§
|
the success of Bradington-Young’s Comfort@Home gallery program, which is now in approximately 150 retailers. Growth among our Comfort@Home dealers has outpaced the rest of our dealer base and the Comfort@Home program now drives approximately 35% of our domestic leather business;
|
§
|
the success of Bradington-Young’s “So You!” highly customizable special order program introduced at the 2013 October High Point International Home Furnishings Market; and
|
§
|
an approximate 7.0% increase in incoming order rates at Seven Seas for the 2014 fiscal year.
|
·
|
Develop the right product:
|
§
|
We increased casegoods and upholstery segment net sales.
|
·
|
Continue to refine our import supplier base with our product standards for quality, delivery, value and cost
:
|
§
|
We reduced the number of factories we use and strengthened our relationships with the remaining suppliers, who we believe best meet our product expectations; and
|
§
|
Investigated and took initial steps toward implementing a consolidating warehouse in Vietnam, in order to offer more container direct options for products from our Vietnamese suppliers.
|
·
|
Build on upholstery segment profitability by continuing to focus on labor efficiency, cost reduction projects and volume increases driven by new and updated products and improved volume at key retailers:
|
§
|
Our upholstery segment operating profitability nearly doubled in fiscal 2014;
|
§
|
We continued successful expansion of Sam Moore’s product offering to include sofas, sectionals, recliners and ottomans, in addition to the core decorative chair line;
|
§
|
Sam Moore provided product development expertise for H Contract and Homeware upholstery;
|
§
|
We continued successful expansion of Bradington-Young’s Comfort@Home gallery program; and
|
§
|
We successfully launched Bradington-Young’s “So You!” highly customizable special order program introduced at the October 2013 High Point International Home Furnishings Market.
|
§
|
However, operating losses increased at Sam Moore, which partially offset the gains discussed above, as Sam Moore struggled to increase manufacturing capacity during the year.
|
·
|
Improve casegoods segment volume and build on its profitability improvements by continued focus on offering strong product lines, limiting discounting through improved inventory management and growing our international business:
|
§
|
While casegoods net sales increased, unit volume and operating profitability decreased in fiscal 2014;
|
§
|
Discounting increased as we exited our youth and other slow-moving product lines;
|
§
|
We began to see improvements in inventory management due to sales and operations planning disciplines implemented during fiscal year 2013; and
|
§
|
Our international business began to grow again in fiscal 2014, with net sales increasing approximately 13% compared to fiscal 2013.
|
·
|
Work towards implementing our ERP system in our domestic upholstery operation in fiscal 2015:
|
§
|
Substantial progress was made in our upholstery segment ERP project in fiscal 2014 and we expect to complete implementation during fiscal 2015.
|
·
|
Build on our fiscal 2013 efforts to connect directly with our consumers:
|
§
|
Our Preferred Partner Program or “P3”, a digital marketing partnership with our key independent retailers, met with a great deal of interest, but as a new program offered to an unfamiliar customer base, the program was slow to pay benefits. We re-launched the P3 program in the fiscal 2014 fourth quarter by holding two ‘dealer summits’ which brought together retailers, digital marketing experts and several successful current P3 participants for a day of education, information sharing and exchange of ideas.
|
·
|
Expand into the senior living market:
|
§
|
H Contract was launched, as planned, in April 2013 at a national trade show for the senior living industry. Throughout the year, we developed sales materials, built an internal staff and a sales force and spent a great deal of time getting to know the industry and our potential customers. Several months after launch, we began shipping market-specific upholstery products as well as accent and occasional wood furniture into this new distribution channel. Our network of sales representatives now reaches 75% of the US and H Contract is steadily becoming a factor in its segment.
|
·
|
Launch our new Homeware line:
|
§
|
Homeware was launched in August 2013. Building this brand, with a unique product in a distribution channel that is new to us, and to much of the furniture industry, has been slow but we remain enthusiastic about the product and the future of on-line furniture retailing. Following a mid-summer introduction with on-line retailers, we launched our own e-retail site in time for the Christmas shopping season. In addition to our unique, ready to assemble, easy to ship chairs, we introduced other home accessories on the site, helping us build brand recognition and traffic to www.homeware.com.
|
§
|
pursuing additional distribution channels, including through our new H Contract and Homeware initiatives;
|
§
|
controlling costs;
|
§
|
expanding our merchandising reach in the “good” and “better” parts of our “good-better-best” casegoods product offerings;
|
§
|
adjusting 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 cost-competitive locations and from quality-conscious sourcing partners and strengthening our relationships with key vendors;
|
§
|
improving profitability and production capacity at Sam Moore;
|
§
|
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 businesses.
|
§
|
recycled over 700,000 pounds of paper, cardboard and plastic;
|
§
|
reduced electricity usage by an average of 6% per year; and
|
§
|
reduced natural gas usage by an average of 9% per year.
|
§
|
A significant decrease in the market value of the long-lived asset;
|
§
|
A significant adverse change in the extent or manner in which a long-lived asset group is being used, or in its physical condition;
|
§
|
A significant adverse change in the legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator;
|
§
|
An accumulation of costs significantly in excess of the amount originally expected to acquire or construct a long-lived asset;
|
§
|
A current period operating or cash flow loss or a projection or forecast that demonstrates continuing losses associated with the long-lived asset’s use; and
|
§
|
A current expectation that more-likely-than-not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
|
§
|
a significant adverse change in the economic or business climate either within the furniture industry or the national or global economy;
|
§
|
significant changes in demand for our products;
|
§
|
loss of key personnel; and
|
§
|
the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed of.
|
§
|
pertain to the maintenance of records that fairly and accurately reflect the transactions and dispositions of our assets;
|
§
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with the authorization of our management and Board of Directors; and
|
§
|
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisitions, uses or dispositions of our assets that could have a material effect on our financial statements.
|
§
|
ICFR is a process that involves human diligence and compliance. Consequently, it is subject to lapses in judgment and breakdowns resulting from human failures, including faulty judgments and control breakdowns due to simple errors or mistakes;
|
§
|
ICFR can be circumvented or overridden by collusion or other improper activities;
|
§
|
ICFR is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; and
|
§
|
The design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
|
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
|
|
4.1
|
Amended and Restated Articles of Incorporation of the Company (See Exhibit 3.1)
|
4.2
|
Amended and Restated Bylaws of the Company (See Exhibit 3.2)
|
|
Pursuant to Regulation S-K, Item 601(b)(4)(iii), instruments ,if any, evidencing long-term debt not exceeding 10% of the Company’s total assets have been omitted and will be furnished to the Securities and Exchange Commission upon request.
|
10.1(a)
|
Form of Executive Life Insurance Agreement dated December 31, 2003, between the Company and certain of its executive officers (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q (SEC File No. 000-25349) for the quarter ended February 29, 2004)*
|
|
|
10.1(b)
|
Form of Outside Director Restricted Stock Agreement (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K (SEC File No. 000-25349) filed on January 17, 2006)*
|
10.1(c)
|
2010 Amendment and Restatement of the Hooker Furniture Corporation 2005 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement dated March 7, 2010 (SEC File No. 000-25349))*
|
10.1(d)
|
2010 Amended and Restated Hooker Furniture Corporation Supplemental Retirement Income Plan, dated as of June 8, 2010 (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q (SEC File No. 000-25349) for the quarter ended October 31, 2010)*
|
HOOKER FURNITURE CORPORATION | |||
April 18, 2014
|
By:
|
/s/ Paul B. Toms, Jr. | |
Paul B. Toms, Jr.
|
|||
Chairman and Chief Executive Officer
|
|||
Signature
|
Title
|
Date
|
||
/s/ Paul B. Toms, Jr.
|
Chairman, Chief Executive Officer and
|
April 18, 2014
|
||
Paul B. Toms, Jr.
|
Director (Principal Executive Officer)
|
|||
/s/ Paul A. Huckfeldt
|
Senior Vice President - Finance and Accounting
|
April 18, 2014
|
||
Paul A. Huckfeldt
|
and Chief Financial Officer (Principal
|
|||
Financial and Accounting Officer)
|
||||
/s/ W. Christopher Beeler, Jr.
|
Director
|
April 18, 2014
|
||
W. Christopher Beeler, Jr.
|
||||
/s/ John L. Gregory, III
|
Director
|
April 18, 2014
|
||
John L. Gregory, III
|
||||
/s/ E. Larry Ryder
|
Director
|
April 18, 2014
|
||
E. Larry Ryder
|
||||
/s/ Mark F. Schreiber
|
Director
|
April 18, 2014
|
||
Mark F. Schreiber
|
||||
/s/ David G. Sweet
|
Director
|
April 18, 2014
|
||
David G. Sweet
|
||||
/s/ Henry G. Williamson, Jr.
|
Director
|
April 18, 2014
|
||
Henry G. Williamson, Jr.
|
Page
|
|
F-2
|
|
F-3
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-10
|
As of
|
February 2,
|
February 3,
|
||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 23,882 | $ | 26,342 | ||||
Trade accounts receivable, less allowance for doubtful
accounts of
$1,243
and $1,249 on each respective date
|
29,393 | 28,272 | ||||||
Inventories
|
49,016 | 49,872 | ||||||
Prepaid expenses and other current assets
|
2,413 | 3,569 | ||||||
Deferred taxes
|
1,664 | 1,612 | ||||||
Income tax recoverable
|
682 | - | ||||||
Total current assets
|
107,050 | 109,667 | ||||||
Property, plant and equipment, net
|
23,752 | 22,829 | ||||||
Cash surrender value of life insurance policies
|
18,891 | 17,360 | ||||||
Deferred taxes
|
4,051 | 4,379 | ||||||
Intangible assets
|
1,382 | 1,257 | ||||||
Other assets
|
355 | 331 | ||||||
Total non-current assets
|
48,431 | 46,156 | ||||||
Total assets
|
$ | 155,481 | $ | 155,823 | ||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities
|
||||||||
Trade accounts payable
|
$ | 7,077 | $ | 11,620 | ||||
Accrued salaries, wages and benefits
|
3,478 | 3,316 | ||||||
Accrued commissions
|
934 | 996 | ||||||
Other accrued expenses
|
759 | 1,535 | ||||||
Customer deposits | 659 | - | ||||||
Total current liabilities
|
12,907 | 17,467 | ||||||
Deferred compensation
|
7,668 | 7,311 | ||||||
Income tax accrual
|
103 | - | ||||||
Total long-term liabilities
|
7,771 | 7,311 | ||||||
Total liabilities
|
20,678 | 24,778 | ||||||
Shareholders’ equity
|
||||||||
Common stock, no par value,
20,000
shares authorized,
10,753
and 10,746
shares issued and outstanding on each date
|
17,585 | 17,360 | ||||||
Retained earnings
|
117,120 | 113,483 | ||||||
Accumulated other comprehensive income
|
98 | 202 | ||||||
Total shareholders’ equity
|
134,803 | 131,045 | ||||||
Total liabilities and shareholders’ equity
|
$ | 155,481 | $ | 155,823 |
2014
|
2013
|
2012
|
||||||||||
Net sales
|
$ | 228,293 | $ | 218,359 | $ | 222,505 | ||||||
Cost of sales
|
173,568 | 165,813 | 173,642 | |||||||||
Gross profit
|
54,725 | 52,546 | 48,863 | |||||||||
Selling and administrative expenses
|
42,222 | 39,606 | 40,375 | |||||||||
Intangible asset impairment charges
|
- | - | 1,815 | |||||||||
Operating income
|
12,503 | 12,940 | 6,673 | |||||||||
Other(expense) income, net
|
(35 | ) | 53 | 272 | ||||||||
Income before income taxes
|
12,468 | 12,993 | 6,945 | |||||||||
Income taxes
|
4,539 | 4,367 | 1,888 | |||||||||
Net income
|
$ | 7,929 | $ | 8,626 | $ | 5,057 | ||||||
Earnings per share:
|
||||||||||||
Basic and diluted
|
$ | 0.74 | $ | 0.80 | $ | 0.47 | ||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
10,722 | 10,745 | 10,762 | |||||||||
Diluted
|
10,752 | 10,775 | 10,790 | |||||||||
Cash dividends declared per share
|
$ | 0.40 | $ | 0.40 | $ | 0.40 |
2014
|
2013
|
2012
|
||||||||||
Net Income
|
$ | 7,929 | $ | 8,626 | $ | 5,057 | ||||||
Other comprehensive income (loss):
|
||||||||||||
Amortization of actuarial (loss) gain
|
(163 | ) | 145 | (803 | ) | |||||||
Income tax effect on amortization of actuarial gains
|
59 | (51 | ) | 303 | ||||||||
Adjustments to net periodic benefit cost
|
(104 | ) | 94 | (500 | ) | |||||||
Comprehensive Income
|
$ | 7,825 | $ | 8,720 | $ | 4,557 |
2014
|
2013
|
2012
|
||||||||||
Operating Activities:
|
||||||||||||
Net income
|
$ | 7,929 | $ | 8,626 | $ | 5,057 | ||||||
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
2,491 | 2,566 | 2,566 | |||||||||
(Gain) loss on disposal of assets
|
(8 | ) | 32 | 108 | ||||||||
Deferred income tax (benefit) expense
|
340 | 20 | (35 | ) | ||||||||
Non-cash restricted stock and performance awards
|
338 | 465 | (38 | ) | ||||||||
Asset impairment charges
|
- | - | 1,815 | |||||||||
Provision for doubtful accounts
|
456 | 61 | 361 | |||||||||
Changes in assets and liabilities
|
||||||||||||
Trade accounts receivable
|
(1,576 | ) | (2,526 | ) | 1,502 | |||||||
Income tax recoverable
|
(682 | ) | - | - | ||||||||
Inventories
|
856 | (15,736 | ) | 23,302 | ||||||||
Gain on life insurance policies
|
(147 | ) | (680 | ) | (565 | ) | ||||||
Customer deposits | 659 | - | - | |||||||||
Prepaid expenses and other current assets
|
30 | 172 | 450 | |||||||||
Trade accounts payable
|
(4,499 | ) | 2,387 | (2,552 | ) | |||||||
Accrued salaries, wages and benefits
|
162 | (539 | ) | 429 | ||||||||
Accrued income taxes
|
(751 | ) | 1,444 | (63 | ) | |||||||
Accrued commissions
|
(62 | ) | 44 | (47 | ) | |||||||
Other accrued (income) expenses
|
(31 | ) | 251 | (209 | ) | |||||||
Deferred compensation
|
88 | 80 | 195 | |||||||||
Other long-term liabilities
|
103 | - | - | |||||||||
Net cash provided by (used in) operating activities
|
5,696 | (3,333 | ) | 32,276 | ||||||||
Investing Activities:
|
||||||||||||
Purchases of property, plant and equipment
|
(3,471 | ) | (4,061 | ) | (3,805 | ) | ||||||
Proceeds received on notes receivable
|
36 | 37 | 35 | |||||||||
Proceeds from sale of property and equipment
|
22 | 303 | 125 | |||||||||
Purchase of intangible
|
(125 | ) | - | - | ||||||||
Premiums paid on life insurance policies
|
(834 | ) | (902 | ) | (1,144 | ) | ||||||
Proceeds received on life insurance policies
|
517 | - | 560 | |||||||||
Net cash used in investing activities
|
(3,855 | ) | (4,623 | ) | (4,229 | ) | ||||||
Financing Activities:
|
||||||||||||
Cash dividends paid
|
(4,301 | ) | (5,386 | ) | (4,315 | ) | ||||||
Purchase and retirement of common stock
|
- | (671 | ) | - | ||||||||
Net cash used in financing activities
|
(4,301 | ) | (6,057 | ) | (4,315 | ) | ||||||
Net (decrease) / increase in cash and cash equivalents
|
(2,460 | ) | (14,013 | ) | 23,732 | |||||||
Cash and cash equivalents at the beginning of year
|
26,342 | 40,355 | 16,623 | |||||||||
Cash and cash equivalents at the end of year
|
$ | 23,882 | $ | 26,342 | $ | 40,355 | ||||||
Supplemental schedule of cash flow information:
|
||||||||||||
Income taxes paid, net
|
$ | 5,534 | $ | 2,901 | $ | 1,987 |
Accumulated
|
||||||||||||||||||||
Other
|
Total
|
|||||||||||||||||||
Common Stock
|
Retained
|
Comprehensive
|
Shareholders'
|
|||||||||||||||||
Shares
|
Amount
|
Earnings
|
Income
|
Equity
|
||||||||||||||||
Balance at January 30, 2011
|
10,782 | $ | 17,161 | $ | 109,000 | $ | 609 | $ | 126,770 | |||||||||||
Net income
|
- | - | 5,057 | - | 5,057 | |||||||||||||||
Unrealized loss on deferred compensation
|
- | - | - | (500 | ) | (500 | ) | |||||||||||||
Cash dividends paid and accrued ($0.40 per share)
|
- | - | (4,315 | ) | - | (4,315 | ) | |||||||||||||
Restricted stock grants, net of forfeitures
|
11 | - | - | - | - | |||||||||||||||
Restricted stock compensation cost
|
- | 101 | - | - | 101 | |||||||||||||||
Balance at January 29, 2012
|
10,793 | $ | 17,262 | $ | 109,742 | $ | 109 | $ | 127,113 | |||||||||||
Net income
|
- | - | 8,626 | - | 8,626 | |||||||||||||||
Unrealized gain on deferred compensation
|
- | - | - | 94 | 94 | |||||||||||||||
Cash dividends paid and accrued ($0.40 per share)
|
- | - | (4,307 | ) | - | (4,307 | ) | |||||||||||||
Purchase and retirement of common stock
|
(58 | ) | (93 | ) | (578 | ) | - | (671 | ) | |||||||||||
Restricted stock grants, net of forfeitures
|
11 | - | - | - | - | |||||||||||||||
Restricted stock compensation cost
|
- | 191 | - | - | 191 | |||||||||||||||
Balance at February 3, 2013
|
10,746 | $ | 17,360 | $ | 113,483 | $ | 202 | $ | 131,045 | |||||||||||
Net income
|
- | - | 7,929 | - | 7,929 | |||||||||||||||
Unrealized loss on deferred compensation
|
- | - | - | (104 | ) | (104 | ) | |||||||||||||
Cash dividends paid and accrued ($0.40 per share)
|
- | - | (4,301 | ) | - | (4,301 | ) | |||||||||||||
Restricted stock grants, net of forfeitures
|
7 | (8 | ) | 9 | - | - | ||||||||||||||
Restricted stock compensation cost
|
- | 233 | - | - | 233 | |||||||||||||||
Balance at February 2, 2014
|
10,753 | $ | 17,585 | $ | 117,120 | $ | 98 | $ | 134,803 |
§
|
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
§
|
Level 2 Inputs: Observable inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
§
|
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
§
|
a significant adverse change in the economic or business climate either within the furniture industry or the national or global economy;
|
§
|
significant changes in demand for our products;
|
§
|
loss of key personnel; and
|
§
|
the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed of.
|
§
|
raw materials and supplies used in our domestically manufactured products;
|
§
|
labor, utility and overhead costs associated with our domestically manufactured products;
|
§
|
the cost of imported products purchased for resale;
|
§
|
the cost of our foreign import operations;
|
§
|
charges or credits associated with our inventory reserves;
|
§
|
warehousing and certain shipping and handling costs; and
|
§
|
all other costs required to be classified as cost of sales.
|
§
|
the cost of our marketing and merchandising efforts, including showroom expenses;
|
§
|
sales and design commissions;
|
§
|
the costs of administrative support functions including, executive management, information technology, human resources and finance; and
|
§
|
all other costs required to be classified as selling and administrative expenses.
|
§
|
it provides a more straight-forward presentation of the reconciliation between consolidated net income and consolidated cash flows;
|
§
|
it helps financial statement users to better understand how non-cash transactions are factors of consolidated net income but not sources of consolidated cash flows; and
|
§
|
it helps financial statement users to better understand the different linkages among our consolidated financial statements.
|
§
|
2014 fiscal year and comparable terminology mean the fiscal year that began February 4, 2013 and ended February 2, 2014;
|
§
|
2013 fiscal year and comparable terminology mean the fiscal year that began January 30, 2012 and ended February 3, 2013; and
|
§
|
2012 fiscal year and comparable terminology mean the fiscal year that began January 31, 2011 and ended January 29, 2012.
|
Fifty-Two
|
Fifty-Three
|
Fifty-Two
|
||||||||||
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Balance at beginning of year
|
$ | 1,249 | $ | 1,632 | $ | 2,082 | ||||||
Non-cash charges to cost and expenses
|
456 | 61 | 361 | |||||||||
Less uncollectible receivables written off, net of recoveries
|
(462 | ) | (444 | ) | (811 | ) | ||||||
Balance at end of year
|
$ | 1,243 | $ | 1,249 | $ | 1,632 |
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Trade accounts receivable
|
$ | 22,776 | $ | 22,712 | ||||
Receivable from factor
|
7,860 | 6,809 | ||||||
Allowance for doubtful accounts
|
(1,243 | ) | (1,249 | ) | ||||
Accounts receivable
|
$ | 29,393 | $ | 28,272 |
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Finished furniture
|
$ | 58,515 | $ | 58,584 | ||||
Furniture in process
|
804 | 688 | ||||||
Materials and supplies
|
8,068 | 8,478 | ||||||
Inventories at FIFO
|
67,387 | 67,750 | ||||||
Reduction to LIFO basis
|
(18,371 | ) | (17,878 | ) | ||||
Inventories
|
$ | 49,016 | $ | 49,872 |
Depreciable Lives
|
February 2,
|
February 3,
|
|||||||||
(In years)
|
2014
|
2013
|
|||||||||
Buildings and land improvements
|
15 - 30 | $ | 24,026 | $ | 23,680 | ||||||
Computer software and hardware
|
3 - 10 | 22,294 | 22,203 | ||||||||
Machinery and equipment
|
10 | 4,495 | 3,663 | ||||||||
Leasehold improvements
|
Term of lease
|
2,765 | 2,697 | ||||||||
Furniture and fixtures
|
3 - 8 | 2,060 | 1,989 | ||||||||
Other
|
5 | 689 | 704 | ||||||||
Total depreciable property at cost
|
56,329 | 54,935 | |||||||||
Less accumulated depreciation
|
36,447 | 34,559 | |||||||||
Total depreciable property, net
|
19,882 | 20,377 | |||||||||
Land
|
1,152 | 1,152 | |||||||||
Construction-in-progress
|
2,718 | 1,300 | |||||||||
Property, plant and equipment, net
|
$ | 23,752 | $ | 22,829 |
Fifty-Two Weeks
|
Fifty-Three Weeks
|
Fifty-Two Weeks
|
||||||||||
Ended
|
Ended
|
Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Balance beginning of year
|
$ | 2,830 | $ | 618 | $ | 1,519 | ||||||
Purchases
|
173 | 2,814 | 11 | |||||||||
Amortization expense
|
(424 | ) | (533 | ) | (912 | ) | ||||||
Disposals
|
(1 | ) | (69 | ) | - | |||||||
Balance end of year
|
$ | 2,578 | $ | 2,830 | $ | 618 |
February 2,
|
February 3,
|
||||||||
Segment
|
2014
|
2013
|
|||||||
Non-amortizable Intangible Assets
|
|||||||||
Trademarks and trade names - Bradington-Young
|
Upholstery
|
$ | 861 | $ | 861 | ||||
Trademarks and trade names - Sam Moore
|
Upholstery
|
396 | 396 | ||||||
URL- Homeware.com
|
Casegoods
|
125 | - | ||||||
Total Non-amortizable Intangible Assets
|
1,382 | 1,257 |
Fifty-Two Weeks Ended
|
Fifty-Three Weeks Ended
|
Fifty-Two Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Trade mark/trade name impairment charges:
|
||||||||||||
Bradington-Young
|
$ | - | $ | - | $ | 1,815 | ||||||
Total trade mark/trade name impairment
|
$ | - | $ | - | $ | 1,815 |
Fair value at February 2, 2014
|
Fair value at February 3, 2013
|
|||||||||||||||||||||||||||||||
Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Assets measured at fair value
|
||||||||||||||||||||||||||||||||
Company-owned life insurance
|
$ | - | $ | 18,891 | $ | - | $ | 18,891 | $ | - | $ | 17,360 | $ | - | $ | 17,360 |
§
|
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 USD 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 of 0.20%; 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.
|
Fifty-Two
|
Fifty-Three
|
|||||||
Weeks Ended
|
Weeks Ended
|
|||||||
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Change in benefit obligation:
|
||||||||
Beginning projected benefit obligation
|
$ | 7,435 | $ | 7,569 | ||||
Service cost
|
256 | 255 | ||||||
Interest cost
|
292 | 297 | ||||||
Benefits paid
|
(379 | ) | (485 | ) | ||||
Actuarial (gain) loss
|
58 | (201 | ) | |||||
Ending projected benefit obligation (funded status)
|
$ | 7,662 | $ | 7,435 | ||||
Accumulated benefit obligation
|
$ | 7,231 | $ | 7,306 | ||||
Amount recognized in the consolidated balance sheets:
|
||||||||
Current liabilities
|
$ | 354 | $ | 379 | ||||
Non-current liabilities
|
7,308 | 7,056 | ||||||
Total
|
$ | 7,662 | $ | 7,435 | ||||
Other changes recognized in accumulated other comprehensive income
|
||||||||
Net gain arising during period
|
(106 | ) | (58 | ) | ||||
Net periodic benefit cost
|
548 | 552 | ||||||
Total recognized in net periodic benefit cost and
accumulated other comprehensive income
|
$ | 442 | $ | 494 |
Fifty-Two
|
Fifty-Three
|
Fifty-Two
|
||||||||||
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Net periodic benefit cost
|
||||||||||||
Service cost
|
$ | 256 | $ | 255 | $ | 525 | ||||||
Interest cost
|
292 | 297 | 337 | |||||||||
Net periodic benefit cost
|
$ | 548 | $ | 552 | $ | 862 | ||||||
Assumptions used to determine net periodic benefit cost:
|
||||||||||||
Discount rate (Moody's Composite Bond Rate)
|
4.5 | % | 4.0 | % | 5.25 | % | ||||||
Increase in future compensation levels
|
4.0 | % | 4.0 | % | 4.0 | % |
Estimated Future Benefit Payments:
|
||||
Fiscal 2015
|
$ | 354 | ||
Fiscal 2016
|
745 | |||
Fiscal 2017
|
745 | |||
Fiscal 2018
|
647 | |||
Fiscal 2019
|
724 | |||
Fiscal 2020 through Fiscal 2024
|
3,791 |
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Performance grants
|
||||||||
2013 Fiscal year grant
|
$ | 305 | $ | 273 | ||||
2014 Fiscal year grant
|
73 | - | ||||||
Total performance grants accrued
|
378 | 273 |
Whole
|
Grant-Date
|
Aggregate
|
Compensation
|
Grant-Date Fair Value
|
||||||||||||||||
Number of
|
Fair Value
|
Grant-Date
|
Expense
|
Unrecognized At
|
||||||||||||||||
Shares
|
Per Share
|
Fair Value
|
Recognized
|
Febuary 2, 2014
|
||||||||||||||||
Awards outstanding balance at January 31, 2010
|
$ | 426 | ||||||||||||||||||
Restricted shares Issued on June 10, 2011
|
11,165 | $ | 9.83 | 110 | 98 | 12 | ||||||||||||||
Restricted shares Issued on June 5, 2012
|
10,573 | $ | 10.38 | 110 | 61 | 49 | ||||||||||||||
Restricted shares Issued on June 7, 2013
|
6,876 | $ | 15.96 | 110 | 24 | 85 | ||||||||||||||
Awards outstanding at February 2, 2014:
|
28,614 | $ | 330 | $ | 183 | $ | 146 |
Whole
|
Grant-Date
|
Aggregate
|
Compensation
|
Grant-Date Fair Value
|
||||||||||||||||
Number of
|
Fair Value
|
Grant-Date
|
Expense
|
Unrecognized At
|
||||||||||||||||
Units
|
Per Unit
|
Fair Value
|
Recognized
|
February 2, 2014
|
||||||||||||||||
RSUs Awarded on September 7, 2011
|
10,684 | $ | 8.21 | $ | 88 | $ | 71 | $ | 17 | |||||||||||
RSUs Awarded on February 9, 2012
|
11,846 | $ | 11.95 | 140 | 97 | 43 | ||||||||||||||
RSUs Awarded on January 15, 2013
|
9,823 | $ | 13.66 | 134 | 44 | 90 | ||||||||||||||
Awards outstanding at Febuary 2, 2014:
|
32,353 | $ | 362 | $ | 212 | $ | 150 |
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Restricted shares
|
28,614 | 29,063 | 21,321 | |||||||||
Restricted stock units
|
32,353 | 32,353 | 10,684 | |||||||||
60,967 | 61,416 | 32,005 |
Fifty-Two
|
Fifty-Three
|
Fifty-Two
|
||||||||||
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Net income
|
$ | 7,929 | $ | 8,626 | $ | 5,057 | ||||||
Less: Dividends on unvested restricted shares
|
12 | 11 | 11 | |||||||||
Net earnings allocated to unvested restricted stock
|
22 | 23 | 13 | |||||||||
Earnings available for common shareholders
|
$ | 7,895 | $ | 8,592 | $ | 5,033 | ||||||
Weighted average shares outstanding for basic
earnings per share
|
10,722 | 10,745 | 10,762 | |||||||||
Dilutive effect of unvested restricted stock awards
|
30 | 30 | 28 | |||||||||
Weighted average shares outstanding for diluted
earnings per share
|
10,752 | 10,775 | 10,790 | |||||||||
Basic earnings per share
|
$ | 0.74 | $ | 0.80 | $ | 0.47 | ||||||
Diluted earnings per share
|
$ | 0.74 | $ | 0.80 | $ | 0.47 |
Fifty-Two
|
Fifty-Three
|
Fifty-Two
|
||||||||||
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Current expense
|
||||||||||||
Federal
|
$ | 3,755 | $ | 3,894 | $ | 1,687 | ||||||
Foreign
|
41 | 50 | 54 | |||||||||
State
|
403 | 403 | 182 | |||||||||
Total current expense
|
4,199 | 4,347 | 1,923 | |||||||||
Deferred taxes
|
||||||||||||
Federal
|
214 | (35 | ) | (87 | ) | |||||||
State
|
126 | 55 | 52 | |||||||||
Total deferred taxes
|
340 | 20 | (35 | ) | ||||||||
Income tax expense
|
$ | 4,539 | $ | 4,367 | $ | 1,888 |
Fifty-Two
|
Fifty-Three
|
Fifty-Two
|
||||||||||
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
February 2,
|
February 3,
|
January 29,
|
||||||||||
2014
|
2013
|
2012
|
||||||||||
Income taxes at statutory rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
Increase (decrease) in tax rate resulting from:
|
||||||||||||
State taxes, net of federal benefit
|
2.1 | 2.1 | 2.3 | |||||||||
Officer's life insurance
|
(1.8 | ) | (3.1 | ) | (5.9 | ) | ||||||
Other, net
|
2.1 | 0.6 | (3.2 | ) | ||||||||
Effective income tax rate
|
36.4 | % | 33.6 | % | 27.2 | % |
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Deferred compensation
|
$ | 3,455 | $ | 3,319 | ||||
Allowance for bad debts
|
448 | 455 | ||||||
State income taxes
|
43 | 153 | ||||||
Property, plant and equipment
|
370 | 220 | ||||||
Intangible assets
|
745 | 989 | ||||||
Charitable contribution carryforward
|
608 | 745 | ||||||
Inventories
|
148 | 447 | ||||||
Other
|
308 | 245 | ||||||
Total deferred tax assets
|
6,125 | 6,573 | ||||||
Valuation allowance
|
(34 | ) | (139 | ) | ||||
6,091 | 6,434 | |||||||
Liabilities
|
||||||||
Employee benefits
|
320 | 328 | ||||||
Total deferred tax liabilities
|
320 | 328 | ||||||
Net deferred tax asset without AOCI
|
5,771 | 6,106 | ||||||
Deferred tax liability in AOCI
|
(56 | ) | (115 | ) | ||||
Total net deferred tax asset
|
$ | 5,715 | $ | 5,991 |
February 2,
|
February 3,
|
|||||||
2014
|
2013
|
|||||||
Balance, beginning of year
|
$ | - | $ | - | ||||
Increase related to prior year tax positions
|
279 | |||||||
Decrease related to prior year tax positions
|
- | |||||||
Increase related to current year tax positions
|
80 | |||||||
Balance, end of year
|
$ | 359 | $ | - |
Severance and
|
Asset
|
Pretax
|
After-tax
|
|||||||||||||||||
Related Benefits
|
Impairment
|
Other
|
Amount
|
Amount
|
||||||||||||||||
Accrued balance at January 30, 2011
|
$ | 163 | $ | - | $ | 31 | $ | 194 | ||||||||||||
Restructuring charges accrued during fiscal 2012
|
- | - | - | |||||||||||||||||
Non-cash charges
|
- | - | - | |||||||||||||||||
Cash payments
|
(163 | ) | (16 | ) | (179 | ) | ||||||||||||||
Accrued balance at January 29, 2012
|
$ | - | $ | - | $ | 15 | $ | 15 | ||||||||||||
Restructuring charges accrued during fiscal 2013
|
- | - | - | |||||||||||||||||
Non-cash charges
|
- | - | - | |||||||||||||||||
Cash payments
|
(5 | ) | (5 | ) | ||||||||||||||||
Accrued balance at February 3, 2013
|
$ | - | $ | - | $ | 10 | $ | 10 | ||||||||||||
Restructuring charges accrued during fiscal 2014
|
- | - | - | |||||||||||||||||
Non-cash charges
|
- | - | - | |||||||||||||||||
Cash payments
|
(6 | ) | (6 | ) | ||||||||||||||||
Accrued balance at February 2, 2014
|
$ | - | $ | - | $ | 4 | $ | 4 |
Fifty-Two Weeks Ended
|
Fifty-Three Weeks Ended
|
Fifty-Two Weeks Ended
|
||||||||||||||||||||||
February 2, 2014
|
February 3, 2013
|
January 29, 2012
|
||||||||||||||||||||||
% Net
|
% Net
|
% Net
|
||||||||||||||||||||||
Net Sales
|
Sales
|
Sales
|
Sales
|
|||||||||||||||||||||
Casegoods
|
$ | 145,266 | 63.6 | % | $ | 141,064 | 64.6 | % | $ | 147,927 | 66.5 | % | ||||||||||||
Upholstery
|
83,027 | 36.4 | % | 77,295 | 35.4 | % | 74,578 | 33.5 | % | |||||||||||||||
Consolidated
|
$ | 228,293 | 100.0 | % | $ | 218,359 | 100.0 | % | $ | 222,505 | 100.0 | % | ||||||||||||
Gross Profit
|
||||||||||||||||||||||||
Casegoods
|
$ | 39,332 | 27.1 | % | $ | 38,054 | 27.0 | % | $ | 37,550 | 25.4 | % | ||||||||||||
Upholstery
|
15,393 | 18.5 | % | 14,492 | 18.5 | % | 11,313 | 15.2 | % | |||||||||||||||
Consolidated
|
$ | 54,725 | 24.0 | % | $ | 52,546 | 24.1 | % | $ | 48,863 | 22.0 | % | ||||||||||||
Operating Income
|
||||||||||||||||||||||||
Casegoods
|
$ | 10,590 | 7.3 | % | $ | 11,953 | 8.5 | % | $ | 10,644 | 7.2 | % | ||||||||||||
Upholstery
|
1,913 | 2.3 | % | 987 | 1.3 | % | (3,971 | ) | -5.3 | % | ||||||||||||||
Consolidated
|
$ | 12,503 | 5.5 | % | $ | 12,940 | 5.9 | % | $ | 6,673 | 3.0 | % | ||||||||||||
Capital Expenditures
|
||||||||||||||||||||||||
Casegoods
|
$ | 2,489 | $ | 3,156 | $ | 2,979 | ||||||||||||||||||
Upholstery
|
982 | 905 | 826 | |||||||||||||||||||||
Consolidated
|
$ | 3,471 | $ | 4,061 | $ | 3,805 | ||||||||||||||||||
Depreciation
& Amortization
|
||||||||||||||||||||||||
Casegoods
|
$ | 1,551 | $ | 1,671 | $ | 1,717 | ||||||||||||||||||
Upholstery
|
940 | 895 | 849 | |||||||||||||||||||||
Consolidated
|
$ | 2,491 | $ | 2,566 | $ | 2,566 |
As of February 2,
|
As of February 3,
|
|||||||||||||||||||||||
2014 |
%Total
|
2013 |
%Total
|
|||||||||||||||||||||
Total Assets
|
Assets
|
Assets
|
||||||||||||||||||||||
Casegoods
|
$ | 122,345 | 78.5 | % | $ | 124,509 | 79.9 | % | ||||||||||||||||
Upholstery
|
33,136 | 21.5 | % | 31,314 | 20.1 | % | ||||||||||||||||||
Consolidated
|
$ | 155,481 | 100.0 | % | $ | 155,823 | 100.0 | % |
Fiscal Quarter
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
2014
|
||||||||||||||||
Net sales
|
$ | 56,295 | $ | 55,301 | $ | 59,125 | $ | 57,572 | ||||||||
Cost of sales
|
42,379 | 42,044 | 45,527 | 43,618 | ||||||||||||
Gross profit
|
13,916 | 13,257 | 13,598 | 13,954 | ||||||||||||
Selling and administrative expenses
|
10,682 | 10,617 | 10,443 | 10,480 | ||||||||||||
Net income
|
2,126 | 1,688 | 2,116 | 1,999 | ||||||||||||
Basic and diluted earnings per share
|
$ | 0.20 | $ | 0.16 | $ | 0.20 | $ | 0.19 |
Fiscal Quarter
|
||||||||||||||||
2013
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Net sales
|
$ | 51,730 | $ | 50,185 | $ | 56,803 | $ | 59,641 | ||||||||
Cost of sales
|
40,808 | 38,920 | 43,243 | 42,842 | ||||||||||||
Gross profit
|
10,922 | 11,265 | 13,560 | 16,799 | ||||||||||||
Selling and administrative expenses
|
9,394 | 8,943 | 9,781 | 11,488 | ||||||||||||
Net income
|
1,020 | 1,474 | 2,434 | 3,698 | ||||||||||||
Basic and diluted earnings per share
|
$ | 0.09 | $ | 0.14 | $ | 0.23 | $ | 0.34 |
§
|
An expanded footprint to encompass the entire 628,000 square foot CDC2 facility;
|
§
|
An initial base rent of $1.80 per square foot;
|
§
|
Two, three-year renewal options, with 180-day advance notice to the landlord;
|
§
|
A schedule of repairs and improvements to be made by the landlord;
|
§
|
Customary covenants, events of default and remedies; and
|
§
|
A right of first refusal for the landlord to provide any additional warehouse space we require within a 25-mile radius of CDC2.
|
§
|
A 10% ($175,000) cash down payment, which was paid at closing;
|
§
|
A five-year promissory note, at 4.5% annual interest rate, with monthly payments computed on a 20-year amortization;
|
§
|
An initial 18-month interest-only period, unless during that period the landlord secures a tenant for all or a portion of the property for a lease term of more than one-year;
|
§
|
All unpaid interest and principal being due on April 1, 2019;
|
§
|
The note being secured by the property and a pledge of cash in the amount of one year’s payments under the note; and
|
§
|
The note becoming due and payable upon any sale of the property.
|
Date: April 18, 2014
|
/
s/ Paul B. Toms, Jr.
Paul B. Toms, Jr.
Chairman and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: April 18, 2014
|
By:
|
/s/ Paul B. Toms, Jr.
Paul B. Toms, Jr.
Chairman and Chief Executive Officer
|
By:
|
/s/ Paul A. Huckfeldt
Paul A. Huckfeldt
Senior Vice President – Finance and Accounting and
Chief Financial Officer
|