Hooker Furniture's acquisition of Home Meridian International drove a 99.8% increase in net sales for its fiscal 2017 first quarter ended May 1. Meanwhile, amortization costs and a decrease in case goods profits dropped income for the period.

Consolidated net sales were $121.8 million, up from nearly $61 million last year, while net income dipped from $3.47 million in last year's first quarter to $2.5 million this year, or from 32 cents to 22 cents per share, a decline of 28%.

This is the first quarter to include consolidated financial results from Hooker's acquisition of Home Meridian, which was completed on Feb. 1, the first day of its 2017 fiscal year. Home Meridian's results are not included in the company's prior fiscal-year results. The major increase in net sales was partially offset by a 7% sales decrease in Hooker Furniture's legacy business, driven by lower sales in the Hooker case goods segment.

"As expected, the first quarter was impacted by the weaker case goods demand we, and our industry, have experienced since late last year," said Paul B. Toms, CEO. "Since the end of our first quarter, we have seen improvement in the incoming order rate for both Hooker and Home Meridian case goods versus the first quarter.

"During this same period, there's been an uptick in consumer spending, stabilization of the stock market and an uptick in housing. We expect these factors will result in an improved furniture retail environment, with less hesitation on the part of consumers to invest in larger-ticket purchases like case goods."

During the quarter, consolidated gross profit increased 62.4%, or $10.2 million, over the prior year quarter primarily due to the Home Meridian acquisition. Also contributing to the increase were higher sales and improved operating efficiencies in the company's upholstery segment. These improvements were partially offset by a decline in the Hooker case goods segment profitability due to lower net sales.

Consolidated operating income decreased $1.2 million, or 23.7% to $4.0 million. The decrease was driven primarily by decreased Hooker case goods segment operating profit, which included approximately $1 million in non-recurring acquisition-related costs recorded during the quarter.

Hooker Furniture finished the fiscal 2017 first quarter with $32.4 million in cash and cash equivalents and $52 million in acquisition-related debt, in addition to its available revolving credit and letters of credit. Inventories stood at $77.7 million.

(Source: Furniture Today)