Tarnished Hooker Furniture: Fool by Numbers

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On June 6, Hooker Furniture (Nasdaq: HOFT) released earnings for the first quarter ended April 29.

• The industrywide slowdown punished Hooker, whose sales decreased 14.8%.
• Rising production costs, coupled with the decrease in sales, caused margins to fall across the board.
• A selldown of inventory allowed the company to generate $19.6 million in free cash flow and increased cash on the balance sheet by 269% from the year-ago quarter.
• Check out why more than 29,000 Motley Fool CAPS investors are bearish about Hooker Furniture, a Motley Fool Hidden Gems recommendation, and rivals such as Ethan Allen Interiors (NYSE: ETH) and Stanley Furniture (Nasdaq: STLY).

  (Figures in thousands, except per-share data.)

Income Statement Highlights

	Q1 2008	Q1 2007	Change
Sales	$77,294.0	$90,694.0	(14.8%)
Net Profit	$4,286.0	$5,832.0	(26.5%)
EPS	$0.33	$0.49	(32.7%)
Diluted Shares	13,173.0	11,928.0	10.4%

Get back to basics with the income statement.

Margin Checkup

	Q1 2008	Q1 2007	Change*
Gross Margin	28.6%	29.6%	(1.0)
Operating Margin	8.0%	10.3%	(2.3)
Net Margin	5.6%	6.4%	(0.9)

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2008	Q1 2007	Change
Cash + ST Invest.	$46,687.0	$12,649.0	269.1%
Accounts Rec.	$39,180.0	$44,832.0	(12.6%)
Inventory	$54,591.0	$83,072.0	(34.3%)

Liabilities	Q1 2008	Q1 2007	Change
Accounts Payable	$11,958.0	$14,272.0	(16.2%)
Long-Term Debt	$7,257.0	$9,806.0	(26.0%)

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2008	Q1 2007	Change
Cash From Ops.	$19,609.0	($11,188.0)	N/A
Capital Expenditures	$730.0	$1,778.0	(58.9%)
Free Cash Flow	$18,879.0	($12,966.0)	N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

• Foolish Forecast: New & Improved Hooker
• Hooker Punished
• Bassett Bays

Stanley Furniture is also a Hidden Gems recommendation. To find more small-cap stocks flying under the market's radar, join Tom Gardner and other investors like you on the discussion boards -- available for 30 days with a free trial.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.