Hooker Furniture Corp. (NASDAQ:HOFT) Q2 2021 Earnings Conference Call - Final Transcript

Sep 03, 2020 • 09:00 am ET

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Hooker Furniture Corp. (NASDAQ:HOFT) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Hooker Furniture Corporation Second Quarter 2021 Earnings Webcast Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Paul Huckfeldt, Chief Financial Officer. Thank you. Please go ahead.

Executive
Paul A. Huckfeldt

Thank you, Jimmy. Good morning, and welcome to our quarterly conference call to review the financial results for our fiscal 2021 second quarter, which began on May 4, 2020 and ended on August 2. We certainly appreciate your participation today. Paul Toms, our Chairman and CEO; Jeremy Hoff, President of our Hooker Legacy Brands; and Lee Boone, Co-President of our Home Meridian division are joining me today for prepared remarks. For the question-and-answer portion of the call, our other executive officers will be available to take questions, including Anne Smith, our Chief Administration Officer; and Doug Townsend, Co-President of Home Meridian.

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 2021 second quarter results. Any forward-looking statements speaks only as of today, and we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after today's call.

This morning we reported consolidated net sales of $130.5 million and net income of $5.8 million, or $0.48 per diluted share for our fiscal 2021 second quarter, which ended on August 2, 2020. Compared to last year's second quarter, our net sales decreased $21.7 million or 14%, while net income increased $1.6 million or 39%. Earnings per diluted share increased 37% from $0.35 a year ago.

For the fiscal '21 first half, consolidated net sales were $235 million, down $52 million or 18% compared to last year's first half. For the first half, we reported a loss of $29 million or $2.46 per diluted share, compared to $0.52 earnings per diluted share in the prior-year first half. Year-to-date loss was driven by a $34 million or $44 million pre-tax non-cash intangible asset impairment charge we reported in Q1 as a result of a material impact of COVID-19 pandemic on our financial performance, market valuation and other factors in our 2021 first quarter, which triggered the need to perform an intangibles asset valuation analysis as of the end of the quarter.

As a result of that analysis, we wrote down goodwill and certain tradenames in the Home Meridian segment and goodwill in the Shenandoah Furniture division of the Hooker Domestic Upholstery segment. Now, Paul Toms will comment on our fiscal '21 second quarter results.

Executive
Paul B. Toms Jr.

Thank you, Paul, and good morning everyone. While the COVID-19 pandemic continue to impact the economy and our operations, our business began to rebound in mid-May and it hasn't let up