Hooker Furnishings Corporation

Hello, and thank you for standing by. Welcome to Hooker Furnishings' fourth quarter 2024 earnings webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to Paul Huffield. You may begin.

Thank you, Tawana. Good morning and welcome to our quarterly conference call to review our financial results for the fiscal 2024 fourth quarter and full year, both of which ended on January 28, 2024. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We certainly appreciate your participation today. 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 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 of $433 million for the fiscal 2024 fiscal year, a decrease of $150 million, or 25.7%, as compared to last year. This decline is attributed to industry-wide soft demand and the exit of unprofitable product lines in our home meridian segment, which accounted for about $21 million of the reduction in revenue. Despite the sales decrease, profitability increased compared to the prior fiscal year due primarily to the absence of a $24 million inventory write down in the current period in our home rating segment, as well as increased profitability in our hooker branded segment. We recorded a consolidated operating income of $12.4 million and net income of 10 million or 91 cents per diluted share. For the fiscal 2024 fourth quarter, which began on October 30th, 23, and ended on January 28th, 2024, consolidated net sales decreased by 34 million, or 26%, to 96.8 million, due to sales decreases in all three segments, also driven by the soft demand for home furnishings. We reported net income of $593,000, or six cents per diluted share, compared to a net loss of 17 million, almost 18 million, or $1.60 per diluted share in the prior year fourth quarter. The fiscal 23 fourth quarter loss resulted from the $24 million inventory write-down related to unprofitable ACH product line and other excess inventories in the Home Meridian segment during that period. Now I'll turn the call over to Jeremy for comments on our fiscal 2024 full year and fourth quarter results.

Thank you, Paul, and good morning, everyone. During a challenging year, we are proud of our team's accomplishments and discipline as they successfully restructured our HMI business model, improved profitability, and strengthened our balance sheet. At the same time, we reinforce belief in our strategic growth initiatives by continuing to make the necessary investments to fuel long-term expansion. While taking comprehensive steps this year to reposition HMI for sustainable profitability, We simultaneously executed an array of long-term growth initiatives, including the launch of the new M Modern Lifestyle brand, new showroom openings, a new enterprise resource planning operating system, and the acquisition of Bobo Intriguing Objects to enhance our ability to be a whole home furnishings resource. Despite difficult business conditions for the home furnishings industry and the 25.6% consolidated sales decrease, Our operating income of $12.4 million and net income of $10 million, or $0.91 per diluted share for fiscal year, were significant improvements over the prior year, as Paul noted. During the year, we also strengthened our financial position and balance sheet, increasing cash by $24 million to over $43 million at year end and adjusted our inventory levels to align with demand. resulting in a 35 million or 36% reduction, including the successful liquidation of HMI's obsolete inventories. Fiscal 24 was a pivotal year for us as we move forward from the initial COVID crisis, but still feel some of the effects. Since 2020, we have navigated through some of the most volatile macroeconomic conditions of our 100-year history. The severe initial downturn of the pandemic, followed by a demand surge for home furnishings, supply chain disruptions, inventory unavailability, historically high ocean freight costs, significant inflation, higher interest rates, a sluggish housing market, and a temporary shift in discretionary spending away from home furnishings. Against the backdrop of these disruptions and recent weak industry-wide demand, We've strengthened our financial position, made strategic investments to expand our addressable market and continued our over 50 year history of dividend payments, including our eighth consecutive annual dividend increase. We are also excited to announce changes to our organization, which we believe will ideally position us for growth into the future. We have consolidated merchandising, for our legacy brands under a Chief Creative Officer designed to drive creative excellence and deliberate more integrated and aspirational presentation in our approach to the market. This move is expected to position Hooker as a whole-home, consumer-centric resource to its customers, drive synergies among our brands, and ultimately drive increased sales and earnings when demand returns. As we celebrate our 100th year of business, The adaptability that's been integral to our culture since 1924 continues to be vital to our success today and will drive us forward as we start our next century. Now I want to turn the discussion over to Paul, who will discuss highlights in each of our segments.