Hooker Furnishings Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Hookah First Things Corporation first quarter 2024 earnings webcast. At this time, all participants are on the listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automatic message advising your hand is raised. Please be advised that today's conference is being recorded. I will now hand the conference over to your speaker host. Mr. Paul Humpfield, Chief Financial Officer. Please go ahead, sir.

Thank you, Olivia. Good morning and welcome to our quarterly conference call to review our financial results for our fiscal 2024 first quarter, which ended on April 30th, 2023. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation this morning. 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 2024 first quarter results. Any forward-looking statement speaks only as of today and 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 for the fiscal 2024 first quarter of 121.8 million. a decrease of $25.5 million, or 17%, compared to last year's first quarter. The revenue decline was driven by a $20 million sales decrease in the Home Meridian segment due to lower sales with major furniture chains and mass merchants, and to a lesser extent, a 15% decrease in domestic upholstery after two years of sales growth in this segment. Net sales in the Hooker-branded segment remained relatively flat compared to the prior year. Consolidated net income was $1.5 million or 13 cents per diluted share this quarter compared to $3.2 million or 26 cents per diluted share in the prior year period. Now I'll turn the call over to Jeremy to comment on our fiscal 2024 first quarter results.

Thank you, Paul. Good morning, everyone. On our call today, we'll discuss our quarterly results and several of our long-term strategic initiatives which are positioned to begin delivering organic growth. Considering the softer retail environment, economic uncertainties, and our recent exit from the Eccentrics home line, we're pleased to have exceeded external expectations for sales and earnings during the quarter. Our liquidation of ACH inventories and other obsolete inventories at HMI is about 80% complete, which is helping us reduce our domestic warehousing footprint and make progress towards getting profitability back on track at HMI. This quarter, we were able to strengthen our balance sheet We generated about $22 million in cash from operating activities, which contributed to a $12 million increase in our cash position for the quarter and funded $4.3 million in share repurchases, along with our typical cash requirements. As we moved into May and now June, we are continuing to build cash and further reduce inventories. As of yesterday, we have generated almost $16 million more in cash since the end of our first quarter, bringing our cash balance to $46 million. Inventory levels decreased by $23 million during the quarter, well on our way towards our goal of reducing inventories by $30 million before fiscal year-end. Our new Hooker Legacy showroom grand opening at the April High Point Market met our expectations as we nearly doubled our attendance from a year ago, attracting new customers and providing a much more meaningful presentation of our legacy brand and the launch of our new brand M. Many of our strategic organic growth initiatives that will enable us to increase our share of total addressable market and visibility are tied to the new showroom and the Hooker legacy brands. One of those strategic growth initiatives, the high point market launch of M, domestically produced upholstery and imported occasional furniture brand, surpassed our expectations. This new brand combining the unique capabilities of HF Custom, Shenandoah, Bradenton Young, and Hooker Case Goods will enable us to compete in a modern lifestyle aesthetic without disrupting any of those core businesses. Retailers affirm to us that the new M brand is very much on point with the up-and-coming casual modern lifestyle that today's younger consumer is gravitating towards. The rebranding of Sam Moore to HF Custom at the Spring High Point Market came at an ideal time as the timing allowed us to elevate the look of the product with new cover treatments and silhouettes and unveil the brand within a highly updated presentation in Showplace. Just prior to the April High Point Market, we completed the transition to a new ERP system for our outdoor furnishings line, Sunset West. In addition, we completed our positioning of the brand for East Coast distribution by stocking the line both in its current West Coast warehouse and now adding Sunset West inventory to our East Coast Savannah warehouse. At the Spring High Point Market, Sunset West debuted its first comprehensive display in our industry's major East Coast market. We believe that Sunset West's expansion to a national distribution offers a double-digit organic growth opportunity over multiple years. Also in April, we announced that the Hooker Furnishings and leading lifestyle and entertainment company, Scott Brothers Global, have renewed the multi-year licensing agreement, which HMI's Pulaski and Samuel Lawrence Furniture Divisions serve as the exclusive bedroom, dining, and occasional furniture suppliers for the Drew & Jonathan home brand. At the High Point Market, HMI introduced a 26-piece Drew & Jonathan collection in a California casual to further expand the product line. After initial delay due to the pandemic, the Drew & Jonathan home line now has the retail placements and demand momentum benefiting shipments in the short and long term. Our transition to a new, leaner business model at HMI will continue into this year as we move away from higher risk businesses to focus on our core strengths and businesses. Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, and Prime Resources International, we believe, are still on track to achieve profitability in this segment by the end of the fiscal year. Importantly, the HMI team is focused on our core competencies as we direct our support and resources behind our key businesses while reducing cost. Now, I want to turn the discussion over to Paul, who will discuss highlights in each of our segments.