Hooker Furniture reports improved operating results for Q3 2006

09 Oct '06

3 min read

Hooker Furniture reported net sales of $83.0 million for its third quarter ended August 31, 2006, a 0.7% increase from net sales of $82.4 million in the same quarter a year ago.

Third quarter net income of $1.2 million, or $0.10 per share, increased 82.2% from $664,000, or $0.06 per share, in the prior year period.

“We're pleased to have achieved a modest sales increase given the challenging business environment in our industry, as well as improved net income despite some larger than typical selling and administrative expenses incurred during the quarter,” said Paul B. Toms Jr., chairman and chief executive officer.

The Company's gross profit margin increased to 28.3% of net sales in the 2006 third quarter compared to 25.8% in the 2005 third quarter, principally due to the shipment of a greater proportion of higher margin imported wood, metal and upholstered products.

Third quarter 2006 operating income improved 70.1% to $2.0 million from $1.2 million in the prior year period. As a percentage of net sales, operating income increased to 2.5% in the current quarter, compared to 1.5% for the 2005 third quarter principally as a result of higher gross profit margins and lower restructuring charges, partially offset by higher selling and administrative expenses.

Restructuring charges, which represented 3.4% of net sales in the 2006 third quarter and 5.7% of net sales in the same 2005 period, reduced operating income margin in both quarters. Selling and administrative expenses increased by 21.0%, or $3.2 million, to $18.6 million, compared to $15.4 million in the 2005 third quarter.

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