This excerpt taken from the HOFT 10-K filed Feb 28, 2007.
NOTE 17 SUBSEQUENT EVENTS
On February 13, 2007, the Company announced that it had signed a letter of intent to purchase Sam Moore Furniture, a Bedford, Va. based manufacturer of upscale occasional chairs with an emphasis on fabric-to-frame customization from La-Z-Boy Incorporated. Sam Moore is a 63 year-old company that has been owned since 1998 by La-Z-Boy. It is positioned in the upper-medium price range, and has a dealer base and a niche and item oriented line similar to the Companys. The acquisition would be a cash purchase of substantially all of the Sam Moore assets, which include property, plant and equipment, inventories and accounts receivable. Property, plant and equipment included in the proposed purchase includes an approximately 325,000 square-foot production facility and corporate offices, both located in Bedford, Va. The transaction is expected to close some time during the second quarter of the 2007 calendar year, subject to, among other things, completion of due diligence and negotiation of a definitive acquisition agreement.
On February 7, 2007, the Companys Board of Directors authorized up to $20 million to repurchase the Companys common stock. Repurchases may be made from time to time in the open market, or in privately negotiated transactions at prevailing market prices that the Company deems appropriate. The Company plans to enter a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the Exchange Act) for effecting some or all of the purchases by the Company under this repurchase authorization. The Company can terminate this plan at any time. Based on the market value of the common stock as of February 13, 2007, the $20 million authorization would allow the Company to repurchase approximately 1.1 million shares, or 8.5% of the 13.3 million shares outstanding, or 10.2% of the Companys outstanding shares excluding the 2.2 million shares held by the ESOP as of February 13, 2007.
On January 29, 2007, the Company announced that it had terminated its ESOP, effective January 26, 2007. The termination will result in an $18.4 million, non-cash, non-tax deductible charge to earnings in January 2007 with a corresponding increase in shareholders equity. As a result of the ESOP termination, approximately 1.2 million shares of previously unallocated shares of Company common stock held by the ESOP will be allocated to eligible employees, resulting in the $18.4 million charge to earnings. To effect the termination of the ESOP, the Company redeemed and retired approximately 1.2 million of the shares of Company common stock held by the ESOP, with proceeds to the ESOP of $17.2 million (or $15.01 per share). The ESOP used the proceeds to repay the outstanding balance on the ESOP loan. The Company expects that elimination of the ESOP compensation expense will yield significant annual cost savings. Annual ESOP compensation expense had averaged $3.4 million for 2004 through 2006, and the Company believes that annual compensation expense for 2007 and beyond could have been substantially higher.
On January 17, 2007, the Company announced that it plans to close its last domestic wood manufacturing facility, located in Martinsville, Va., by the end of March 2007. As a result, the Company recorded asset impairment charges of $4.2 million in November 2006, to write down the real and personal property at the facility to its estimated fair market value. In January 2007, the Company expects to record severance and related benefit costs of $2.3 million, for approximately 280 employees, along with an additional $655,000 in other restructuring expenses. Additionally, in January 2007, the Company will reclassify the Martinsville facility assets to assets held for sale. The Company intends to actively market the assets, and anticipates they will be sold within the next twelve months. The Company expects to record an additional $550,000 to $625,000 in disassembly and other similar expenses during 2007 as incurred.
On January 15, 2007, awards totaling 4,875 shares of restricted common stock were granted to five non-employee members of the Companys board of directors. Each award is subject to vesting requirements and other limitations in accordance with the Hooker Furniture 2005 Stock Incentive Plan.
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This excerpt taken from the HOFT 10-K filed Feb 28, 2006.
NOTE 17 - SUBSEQUENT EVENTS
Of the $1.7 million in carrying value of assets held for sale as of November 30, 2005, the Company sold the majority of the machinery and equipment in December 2005, having a carrying value of $907,000, for an aggregate consideration of $932,000 in cash, net of selling expense. The Company is actively marketing the remaining real and personal property and anticipates that they will be sold within the next twelve months. See Note 12 Restructuring.
On January 13, 2006, awards totaling 4,851 shares of restricted common stock were granted to six non-employee members of the Board of Directors. Each award is subject to vesting requirements and other limitations in accordance with the Hooker Furniture 2005 Stock Incentive Plan approved by shareholders at the 2005 annual shareholders meeting.
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