MARTINSVILLE, VA - Hooker Furniture (Nasdaq:HOFT) reported third quarter fiscal 2012 net income of $2.3 million, more than double the year prior.
Though net sales were dipped 2.8 percent to $54.2 million, Hooker Furniture pointed out operating profitability increased to $2.7 million, or 5% of net sales - running well ahead of year ago rates of $1.7 million or 3% of net sales, and suggesting improvements in efficiency.
The sales dip was driven by softened consumer demand, lower unit volume and higher product discounting, the company said. "Although consumer demand softened noticeably beginning in April through late September, we've seen an improvement in incoming orders over the last 60 days," said Paul B. Toms Jr., chairman and CEO.
For the first nine months of the 2012 fiscal year, which began January 31, 2011, net sales increased $7.7 million, or 4.8%, to $168.1 million and net income rose 30 percent to $4.4 million.
"We're pleased to have nearly doubled quarterly net income from a year ago and to have achieved the best overall profitability performance in the last seven quarters, despite the slight sales dip," said Toms in reporting the earnings.
Gross margin for the wood furniture division increased to 28.2%, primarily due to lower freight costs for imported furniture, Hooker says. A casualty loss expense of $181,000 was reported, related to a previously reported sprinkler malfunction at a Hooker Furniture warehouse.
"Hooker Furniture is a more efficient organization today than in the past several years, which contributed to our improved profit margins," said Toms. "We've done a good job of bringing down selling and administration expenses and other costs we can control."
Among cost savings measure were decreased salaries and other employee-related costs, after realignments in its officer group; lower advertising supplies and sample expenses; and lower bad debts expense, as collections showed favorable trends.
Depreciation and amortization on computer systems fell pursues an Enterprise Resource Planning (ERP) project.
"We are now about two years into the ERP project to integrate and improve our operating systems, and expect to go live in case goods early next year with upholstery coming on line soon after," said Toms.
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