Hooker Furniture Corp. (NASDAQ:HOFT) Q2 2019 Earnings Conference Call Transcript

Sep 05, 2019 • 08:00 am ET

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Hooker Furniture Corp. (NASDAQ:HOFT) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings ladies and gentlemen and welcome to the Hooker Furniture Quarterly Investor Conference Call reporting its Operating Results for the Second Quarter. [Operator Instructions] A brief question-and-answer session will follow the formal presentation. [Operator Instructions]

It is now my pleasure to introduce your host, Paul Huckfeldt, Vice President, Finance and Chief Financial Officer for Hooker Furniture Corporation.

Executive
Paul Huckfeldt

Thank you, Michael. Good morning and welcome to our quarterly call to review financial results for our fiscal 2020 second quarter, which ended on August 4, 2019. We appreciate your participation today.

Paul Toms, our Chairman and CEO, and Doug Townsend, the Co-President of our Home Meridian Division, will join me for our prepared remarks. For the question and answer portion of the call, several of our business unit heads will be available to take questions, including Michael Delgatti, President of Hooker Domestic Upholstery and Emerging Channel; Home Meridian Co-President of Lee Boone; and Jeremy Hoff, President of our Hooker Branded segment and Anne Jacobson, our Chief Administrative Officer.

During our call, we may make forward-looking statements, which are subject to risks and uncertainties. A discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2020 second quarter results. Any forward-looking statements speak only as of today, we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call.

This morning, we reported consolidated net sales of $152 million and net income of $4.2 million, or $0.35 per diluted share for the fiscal 2020 second quarter, which ended August 4, 2019. Compared to last year's second quarter, our net sales decreased $16.4 million or 9.7% and net income decreased $4.5 million or 52%. Earnings per diluted share decreased 52% from $0.74 a year ago.

For the fiscal 2020 first half, consolidated net sales were $288 million with net income of $6.1 million or $0.52 per diluted share. Net sales were down 7.6% or $23.8 million compared to last year's first half. Earnings per diluted share decreased to $0.52 from $1.34 last year, a 61% decline from the prior year first half.

Paul Toms will now comment on our fiscal 2020 second quarter results.

Executive
Paul Toms

Thanks, Paul and good morning everyone. As we expected after our first quarter, business in the second quarter was significantly impacted by tariffs on finished goods and component parts imported from China, as well as weak retail demand through the first eight months of this year. In addition, lingering effects of several cost related issues that began late last year at Home Meridian deflated our performance in the quarter. We believe the macroeconomic challenges related to the tariffs and soft retail conditions are affecting many companies in the furniture industry.

Looking across our industry, many public furniture companies are reporting weaker sells and reduced earnings. Business disruptions from the 10% tariff imposed last September and the additional 15% tariff imposed, June 15 this year, have impacted both