Hooker Hopes Earnings Improve on Cost Cutting

High Point, NC, March 28, 2007--Hooker Furniture said it expects earnings to improve over the next year -- even if furniture sales are flat -- largely from cost cuts, its chairman and chief executive said on Tuesday.

"We believe that even in a flat sales environment, and possibly in a declining sales environment, we can still be more profitable than we were last year because of the costs we've taken out of the business," Paul Toms Jr. told Reuters at the High Point Market home furnishings show in North Carolina.

Over the past year, the Martinsville, Virginia, company has ended its employee stock ownership plan and improved distribution. This month, it is closing its last U.S. wood furniture plant, which will cut fixed costs by as much as $3.5 million annually.

For its fiscal year ended Nov. 30, 2006, net income rose 13 percent to $14 million as sales, under pressure from weakness in the U.S. housing market, edged up 2 percent.

"We're trying to focus on what can we do to make the company more successful irregardless of what goes on with sales," Toms said.

Hooker, which has agreed to buy upscale upholstered chair maker Sam Moore Furniture from La-Z-Boy Inc., said improved results would enable it to enhance growth with niche acquisitions.

"There's some additional acquisition opportunities that we'll look at in the future, for example, accessories, lamps pictures, those kinds of things," said Edwin L. Ryder, Hooker executive vice president for finance.

As the company unveils new products -- such as a tall, wooden cabinet that can hold 20 pairs of shoes -- Ryder also said Hooker was looking to expand its retail distribution, either with existing customers or other channels, such as lifestyle furniture retailers like Crate & Barrel.

Toms, the CEO, added that Hooker was also talking to smaller higher-end electronics retailers about forming relationships to sell its TV console and other entertainment furniture. The typical Hooker customer has a household income of at least $100,000, he said.

"There's an opportunity for Hooker in the home electronics channel to partner with people that are selling a lot of high-definition TVs and better consumer electronics and find a way to offer the cabinetry and seating," Toms said.