Hooker Furniture Reports Increased Earnings for 4th Quarter

Furniture World News

Hooker Furniture announced that it understated net income for its fourth quarter ended November 30, 2005 by approximately $658,000, or $0.06 per share, in its news release dated January 12, 2006. The revision is primarily a result of an overstatement of the Company's advertising program costs and group insurance expense for the 2005 fourth quarter resulting in a combined $1.0 million of additional pretax income. Hooker Furniture's revised net sales for the 2005 fourth quarter are $90.2 million and $341.8 million for the year ended November 30, 2005. Net income for the 2005 fourth quarter as revised is $4.0 million, or $0.34 per share. Hooker Furniture's net income for the year ended November 30, 2005 as revised is $12.5 million, or $1.06 per share. The Company accounts for certain of these advertising program allowances as a reduction in net sales. When accounting for these programs, the Company recorded certain of these costs before an actual liability was incurred. The effect of this error was not material to results of operations in the current or any prior period. The decrease in group insurance expense was the result of a correction to the accrual for the month of November 2005. Separately, the Company is revising its 2006 first quarter net sales estimate to a range of 2% lower to 2% higher than its strong first quarter sales in 2005. The revised forecast is based upon better than anticipated shipments thus far in the quarter. The Company had previously announced a net sales estimate of 3% to 7% lower than first quarter 2005. The Annual Meeting of Shareholders will be held on Friday, March 31, 2006, at 2:00 p.m., at Piedmont Arts Association, 215 Starling Avenue, Martinsville, Virginia. Ranked as the nation's sixth largest publicly traded furniture producer based on 2004 shipments to U.S. retailers, Hooker Furniture is an 81-year old importer and manufacturer of residential wood, metal and upholstered furniture. The Company's principal customers are retailers of residential home furnishings who are broadly dispersed throughout North America. Major furniture categories include wall and entertainment units, office, dining, occasional, bedroom and upholstered leather furniture for the home. With approximately 1,400 employees, the Company operates five manufacturing plants, one supply plant, six distribution centers and warehouses, three showrooms and a corporate office in Virginia and North Carolina. The Company also utilizes a distribution center and a warehouse located in China. The Company's stock is listed on the NASDAQ Capital Market under the symbol HOFT, and closed at $15.60 per share on February 13, 2006.