Hooker Furniture F4Q08 (Qtr End 2/3/08) Earnings Call Transcript

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2008-04-03 08:28:08.0

Tags: Hooker Furniture Corp.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Matt McCall from BB&T Capital Markets.

Matthew S. McCall - BB&T Capital Markets

Thanks. Good morning, everybody. Let’s see, a couple of questions; first, and I don’t think you detailed some of the pressures but specifically on the SG&A line, it looks like we had a seasonally softer top line yet -- I guess just looking at SG&A, it looks like it ticked up a little bit. Can you provide a little bit more detail about what caused that number to go higher? And then what’s the kind of -- remind me of the seasonal items that impact SG&A.

E. Larry Ryder

Matt, I think I can give you a little bit of color on that. Of course, in the SG&A was included the $1.1 million for the High Point showroom. That fell into that category so that was probably the largest single item.

Beyond that, in looking at some of the expenses that took place in the fourth quarter, we didn’t really have anything that was particularly unusual. We had higher utility costs that entered into the fourth quarter but there was really nothing that stood out as particularly troublesome in the SG&A, other than the $1.1 million.

Matthew S. McCall - BB&T Capital Markets

Okay, I mean -- just intuitively, I would imagine $1.5 million lower top line, you would see the benefit of lower commissions and maybe some relief on the SG&A line. No items that you could point to that would be -- so it’s utility costs, I assume that’s just inflation pressures. That would be about it?

E. Larry Ryder

And getting into the [heating] season -- yeah, that’s pretty much it. I’m not aware of anything else, are you?

Paul B. Toms Jr.

I think you are right that commissions are variable and obviously fluctuate with sales. Commissions as part of our total selling and administrative costs represent less than 25%, so a lot of the selling and administrative costs are fixed.

E. Larry Ryder

Remember also, Matt, that in selling and administrative, we capture all of our warehousing costs, so warehousing costs tend to be a relatively fixed cost over a long period of time. And when you’ve got that top line that’s diminishing, it is a little bit higher percentage.

Paul B. Toms Jr.

I think also this year, we had Sam Moore’s selling and administrative captured in our total where we didn’t in the transition period.

 

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