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June 11,
2008
BY EDGAR,
FACSIMILE AND U. S. MAIL
Mr. John
Cash
Branch
Chief
Division
of Corporation Finance
Securities
and Exchange Commission
100 F
Street, NE
Washington,
DC 20549-7010
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RE:
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Hooker
Furniture Corporation
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Form
10-K for the fiscal year ended February 3,
2008
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Filed
April 16, 2008
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File
No. 0-25349
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Dear Mr.
Cash:
Hooker
Furniture Corporation is providing its responses to the Staff’s comment letter
dated May 29, 2008 (the “Staff Letter”) with respect to the Company’s Form 10-K
referenced above. This letter has been submitted via EDGAR, facsimile and a hard
copy delivered by U. S. Mail.
Set forth
below are each of the Staff’s comments (in italics) followed by the
Company’s responses. The headings and numbered paragraphs in this
letter correspond to the same contained in the Staff Letter. Terms
used in this letter, that are not otherwise defined herein, have the meanings
given them in the Form 10-K unless the context indicates otherwise.
We
acknowledge and appreciate the opportunity to discuss the Staff’s comments as
well as provide further insight into the Company’s operations in our telephone
conversation with Staff Accountant, Mindy Hooker on June 3, 2008. Our
responses incorporate key points from that discussion, as
appropriate.
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Staff
Comment: We note your
disclosures that address the industry wide slowdown in business at retail and
that you expect business conditions to remain challenging well into fiscal
2009. We also note from your risk factors on page 11 that an economic
downturn could effect consumer spending habits by decreasing overall demand for
home furnishings. While your current discussion of operations and
your focus on the changes in your business model address many factors that have
impacted your results, we believe that you should enhance this discussion in
future filings to include more specific quantified information. This
will allow a reader to more clearly understand how the current sales environment
impacts your financial results and all also enable a reader to better understand
how future trends may also impact your results. This additional
quantified information could include, but not be limited to, the following
areas:
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·
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Enhanced
discussion regarding the potential margin improvements realized and future
trends from imported wood and metal products compared to domestic
manufacturing;
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Impact
of recent acquisitions such as Sam Moore and Opus Designs LLC on your
operating results;
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The
potential impact on your inventory levels resulting from the change in
your business model and potential supply chain
issues;
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A
more thorough discussion and quantification of the contribution to your
performance resulting from each of your major product
sub-categories
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Company
Response: Hooker
Furniture operates predominantly in the residential home furnishings industry,
principally in North America. Generally, our customers and financial
performance are similar for substantially all of the Company’s product lines,
including the product lines of the recently acquired Sam Moore and Opus Designs
businesses. Additionally, substantially all of the Company’s product
lines are affected in similar ways by economic conditions and consumer spending
patterns. Consequently, financial performance measures are generally similar for
all of the Company’s products.
We have
noted in our filing that domestically produced wood furniture had a diminished
impact on the current year’s results of operations, due to the Company’s exit
from that business last year. That transition is now substantially
complete. As a result, the Company expects that inventory levels in future
periods will be comparable as a percentage of sales to those for the 2008 fiscal
year.
The
Company will provide in future filings, when material, more specific quantified
information regarding the performance of major product sub-categories when
required to give investors an understanding of how a particular major product
sub-category has had a distinct effect on the financial performance of the
Company.
Result
of Operations page 21
Staff
Comment: We note
your use of the non-GAAP financial measure Operating Margin excluding
restructuring and special charges. Please enhance your disclosures to
clearly indicate why management believes that the measure is useful and also to
describe any material limitations associated with this measure and how
management compensates for those material limitations. Please refer
to Item 10 of Regulation S-K and our response to question eight of “Frequently
Asked Questions Regarding the use of Non-GAAP Financial
Measures.”
Company
Response: In addition to
the presentation of “Operating Margin excluding restructuring and special
charges” in its “Results of Operations” referred to in the Staff’s comment, the
Company also provided disclosure regarding this non-GAAP financial measure in
“Item 8 - Financial Statements and Supplementary Data.” In each case, the
Company included a brief statement explaining why the Company provides this
information. As a point of clarification, the Company discloses this measure
because it understands this information is useful to investors, but management
does not use this measure for any other purpose.
In any
future filings in which the Company presents “Operating Margin excluding
restructuring and special charges” we will include additional disclosure
regarding any material limitations of that financial measure as compared to the
use of the most directly comparable GAAP financial measure.
In
connection with responding to the Staff’s comments the Company acknowledges
that:
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The
Company is responsible for the adequacy and accuracy of the disclosure in
its filings;
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Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the
filing; and
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The
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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If you
have any questions or require any additional information, please call me or Gary
Armbrister at (276) 656-0459,
Best
regards,
/s/ E.
Larry Ryder
E. Larry
Ryder
Executive
Vice President – Finance and Administration
Chief
Financial Officer
Enclosures
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cc:
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Mindy
Hooker, Staff Accountant – Division of Corporation Finance, Securities and
Exchange Commission
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R.
Gary Armbrister, Chief Accounting Officer, Hooker Furniture
Corporation
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Henry
G. Williamson, Jr., Audit Committee Chairman, Hooker Furniture
Corporation
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Paul
Chapman, Partner, KPMG LLP
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Karl
M. Strait, Partner, McGuireWoods,
LLP
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