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Customer bankruptcy, severance charges push Hooker’s loss in Q3

Martinsville-based reported consolidated net sales of $104.4 million in the third quarter ended Oct. 27, a decrease of $12.5 million, or 10.7%, from last year. It also reported an operating loss of $7.3 million, marking its third quarterly loss in a row.

The company attributed ongoing low demand as a reason for the loss, as well as $7.5 million in charges – which came from $3.1 million in severance (from 44 layoffs announced last quarter), $2.4 million from the bankruptcy of a significant customer and $2 million in trade-name impairment charges related to its Home Meridian (HMI) segment.

For the first nine months of the year, sales were $293 million, a 12.9% decline from last year. This was attributed to “persistent low demand affecting the home furnishings industry” and the absence of $11 million in liquidation sales from the unprofitable ACH product line which Hooker exited last year. Hooker saw a $15.4 million operating loss for the period.

Still, there are positives. The company says it should exceed its goal of saving $10 million in annual costs in 2026; Home Meridian reported its highest ever gross margin of 20.5%; and macro-economic conditions are trending positively.

“Despite the charges recorded in Q3 and the sustained macro-economic and challenges, we’re encouraged by the sequential quarterly improvement in our core business profitability and by the progress of our cost reduction efforts, which will be more fully realized beginning in the fourth quarter,” CEO Jeremy Hoff said in a statement.

“There are positive developments in the macro-economic environment, such as cooling inflation and recent interest rate cuts in September and November, which should begin to increase demand for furnishings as lower mortgage rates boost the housing market,” he added.

In Hooker Branded, sales fell 10.7% to $4.2 million due to lower average selling prices, the company said. Unit volume decreased by 2.1% from last year but exceeded the first and second quarters of this year. Hoff said the company has increased the segment’s inventories by nearly $11 million in anticipation of increased demand.

“We are aggressively producing our top collections to ensure we will be in during the first quarter of fiscal 2026,” he said, adding that “these inventories are high-quality assortments, centered on our best-selling and most-profitable SKUs.”

In HMI, sales fell $5.1 million, or 11.8%, 40% of which Hoff said was due to the bankruptcy of a major customer. Sales through major furniture chains and independent furniture stores decreased, “though these decreases were partially offset by an 8% increase in sales within the hospitality business, marking two consecutive quarters of higher revenues.” Incoming orders increased by 8.1% compared with the previous year’s third quarter.

“Our strategic focus to support sustained profitability through restructuring Home Meridian’s business is yielding meaningful results, including significantly reduced allowances, improved product margins and lower fixed costs across nearly all areas of this segment,” Hoff said.

In Domestic Upholstery, net sales decreased by $3.2 million, or 9.9%, due to decreased sales at Shenandoah, Bradington-Young and HF Custom, which the company attributed to persistent low demand. This decrease was partially offset by a 9.1% increase in sales at Sunset West, which has delivered year-over-year quarterly sales growth for three consecutive quarters this fiscal year.

The segment reported an operating loss of $281,000, a sequential improvement versus $1.3 million in operating losses recorded in each of this year’s earlier quarters. This quarter’s loss included $560,000 in severance charges. Incoming orders decreased by 4.8% during the quarter.

Cash and cash equivalents were $20.4 million at the end of the third quarter, a decrease of $22.7 million for the year-end in January. Inventory levels increased by $4.7 million from year-end, primarily driven by a $6.2 million increase in Hooker Branded inventories.

Hoff gave some concluding remarks:

“While the macro-economic outlook is improving, our team will continue to focus on the controllables and improvements already underway at Hooker Furnishings,” he said. “Our balance sheet, financial condition and seasoned management team should well-equip us to navigate any remaining challenges as we focus on maximizing efficiencies with the cost reductions while simultaneously investing in expansion strategies that will position us for revenue and profitability growth when demand fully returns.”

Hope For The Warriors: Robin Kelleher

Virginia Governor Glenn Youngkin recently announced the appointment of Robin Kelleher, founder and CEO of Hope For The Warriors, to the Joint Council (JLC) of Veterans Service Organizations. Composed of Commonwealth veteran services organizations, the JLC identifies veterans’ needs and advocates in support of veterans’ issues.

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HII division lands $6.7B Air Force contract

The U.S. has awarded ‘ -based Mission Technologies division a $6.7 billion to provide electronic warfare engineering and technical services support, according to a Thursday announcement from the contractor. 

The indefinite-delivery, indefinite-quantity contract is the largest Mission Technologies has yet landed, according to HII. 

“We have a team of subject matter experts with deep expertise in all aspects of electromagnetic spectrum and electronic warfare, and we are committed to staying a step ahead of our adversaries alongside our customers as the complexity of warfare changes,” Andy Green, HII executive vice and president of Mission Technologies, said in a statement.

Additionally, HII announced Wednesday that it had entered into a definitive agreement to acquire substantially all of the assets of W International SC and Vivid Empire SC. Collectively known as W International, the South Carolina complex metal fabricator specializes in manufacturing structures, modules and assemblies.

Aerial shot of manufacturing facility that sits next to water.
W International facility in South Carolina. Photo courtesy HII.

A spokesperson for HII declined to provide terms of the deal. 

After the acquisition closes, the manufacturing facility in Goose Creek, South Carolina, will operate within HII’s Shipbuilding division. The site will support construction of nuclear-powered submarine and aircraft carrier modules and structures for programs. NNS is one of only two U.S. shipyards capable of designing and building nuclear‐powered submarines.

“Substantially all current employees will be offered positions with HII to continue to work on-site,” the release stated.

“HII is committed to increasing build rates for our Navy customer, and this investment in capacity alongside the Navy will help us do that,” said HII President and CEO Chris Kastner. “It lets us efficiently add trained talent and state-of-the-art manufacturing capabilities to the urgent job of building ships.”

The acquired assets include advanced production facilities that are located on a leased 45-acre site with more than 480,000 square feet of manufacturing space as well as barge and rail access.

The facility in South Carolina will be known as Newport News Shipbuilding – Charleston Operations.

Matt Needy, currently Newport News Shipbuilding’s vice president and chief transformation officer, will become general manager of the site. The transaction is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other factors.

Newport News-based HII is the nation’s largest military shipbuilder and the largest industrial employer in Virginia. The company employs more than 44,000 workers. The Mission Technologies division has more than 7,000 employees and more than 100 facilities globally. HII reported $11.5 billion in revenues for 2023.

As bitcoin breaches $100K, MicroStrategy holdings, Saylor’s wealth surge

MicroStrategy, the -based tech company chaired by whale , has pursued bitcoin as an investment strategy since 2020. Now, it appears to have paid off as bitcoin breached the $100,000 threshold.

Bitcoin rose above $100,000 per coin Wednesday night, after previously breaching $99,000 on Nov. 21. At 11:45 a.m. Thursday, bitcoins were trading for $101,293.94, according to Coinbase, the nation’s largest exchange, although the cryptocurrency had breached $103,000 earlier in the day.

As of Dec. 1, and its subsidiaries held approximately 402,100 bitcoins, which were worth $40.37 billion at 11:45 a.m. The company’s 402,100 bitcoins were purchased for approximately $23.4 billion, and at an average purchase price of $58,263 per bitcoin, including fees and expenses.

At 11:45 a.m. Thursday, MicroStrategy shares were trading for $402.78, although shares were trading for $439.60 at market open. The ‘s value has been climbing since September, up from  $114.30 on Sept. 6 and reaching a six-month high of $473.83 on Nov. 20, the first time bitcoin came near the $100,000 mark.

Now the world’s largest corporate holder of the cryptocurrency, MicroStrategy announced its first bitcoin purchase in August 2020, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value. Since 2020, MicroStrategy has bought bitcoin about 42 times, Saylor said on CNBC’s “Squawk Box” on Tuesday.

Between Nov. 25 and Dec. 1, MicroStrategy bought approximately 15,400 bitcoins for about $1.5 billion in cash, averaging about $95,976 per bitcoin, including fees and expenses.

Saylor, who has made bold pronouncements and statements about bitcoin in the past, in September told CNBC that he thought the cryptocurrency could rise as high as $13 million per bitcoin by 2045, a prediction he repeated Wednesday on Fox Business.

“Digital capital is what happens when your long-term store of value goes from a building, or goes from a portfolio of stocks, to a digital asset like bitcoin. Bitcoin represents the digital transformation of hundreds of trillions of dollars of capital in the world,” Saylor said on Fox Business.

Appearing on CNBC’s “Squawk Box” on Tuesday, Saylor said Microsoft could add up to $4 trillion to its valuation by investing in bitcoin.

As of Sept. 30, Saylor held more than 19.998 million Class A shares of MicroStrategy, 9.9% of the company’s Class A stock. As of 11:45 a.m., his shares were worth a total of $8.05 billion.

He’s also put his own money where his mouth is. In October 2020, Saylor said in a tweet that he held 17,732 bitcoins. In August, Saylor said on Bloomberg Television he owned about $1 billion worth of bitcoin and continued to buy more. On that day, bitcoin was trading around $56,000.

The bitcoin rally began with Donald Trump’s presidential election victory, and on Nov. 11, bitcoin breached $87,000 a coin. At 7 p.m. on Nov. 5, before the election outcome was known, bitcoin was trading for 69,378.53. Although Trump previously called cryptocurrencies a “scam” in 2021, he made pro-bitcoin comments and promises during his campaign, including calls to establish a national strategic bitcoin reserve.

Before bitcoin breached $100,000 on Wednesday, Trump announced he would nominate Paul Atkins, CEO of consultancy Patomak Global Partners, to chair the Securities and Exchange Commission. Atkins was an SEC commissioner from 2002 to 2008 and is a cryptocurrency advocate.

The current SEC chair, Gary Gensler, has announced he will step down on Jan. 20, when Trump is inaugurated. The industry is no fan of Gensler, who has led the SEC to be aggressive in enforcement.

Saylor’s strategy hasn’t always led to fortune. He stepped down as CEO after MicroStrategy’s August 2022 earnings report, when the company disclosed that it had paid a total of $3.977 billion for its bitcoin, which at that time had fallen to a market value of about $2.451 billion. At that point, MicroStrategy also had taken on about $2.4 billion in loans and debt to acquire bitcoin. At points in 2022, the currency fell below $20,000 to prices it had not seen since 2020. Nevertheless, on Thursday, Saylor’s strategy seemed less a part of science fiction and more a result of visionary strategy, though time will tell.

FAA certification clears way for DroneUp to scale up

Virginia Beach-based drone delivery company has received a Federal Aviation Administration certificate that will allow it to grow its delivery operations.

On Tuesday, the company announcedi t received an FAA Part 119 air carrier certificate under Part 135. The certificate allows DroneUp to carry third-party property as an air carrier and to fly up to 5 miles without maintaining a visual line of sight.

“With this certification, and with actual beyond visual line of sight certification,” said DroneUp founder and CEO Tom Walker, “you’re going to see this start to scale very, very quickly, because the cost of doing delivery by drone is not only going to be better and more efficient than some of the other traditional modalities, but it’s safer.”

Previously, DroneUp couldn’t carry cargo owned by others and had to have special arrangements with retailers, limiting their partnerships. Also under the previous Part 107 certification, the company had to maintain sight of the drone, with either the drone operator or a visual observer in contact with the operator watching, and the minimum weather visibility required was 3 miles from the control station.

“It allows us to scale much, much quicker,” Walker said, “and also we can do it more affordably for the customers, because we can fly beyond visual line of sight. We don’t have the additional overhead of the visual observers that we had before.”

DroneUp is the sixth U.S. drone operator to receive a Part 135 Air Carrier Certificate, according to the FAA. The company submitted its initial application in May, Walker said.

DroneUp is beginning operations under the Part 135 certification at its location in Murphy, Texas, near Dallas. The tech company will then work to get FAA approval to append the certification to add other locations, starting with the remaining 10 in the Dallas-Fort Worth area.

“The first thing we’re going to do is we’re going to get all 11 of those locations in the DFW area operating Part 135 … and then after that, we intend to continue to expand across the Dallas-Fort Worth area until we can successfully cover 80% of that area with drones, demonstrate our ability to do that at scale under Part 135, and then we’ll be expanding into another metro area yet to be announced,” Walker said.

DroneUp will start expanding Part 135 operations in the first quarter of 2025, “and if I have my way, we’ll have all of the entire DFW area that we have now operating as Part 135 by the end of Q1,” Walker said, and then start expanding into new Dallas-Forth Worth locations under Part 135 in the second quarter.

Under the previous certification, the Murphy location could serve 6,000 households, but under the Part 135 certification, it will be able to serve 25,000 households, and with fewer personnel, according to Walker.

DroneUp provides delivery services and has conducted several medical supplies delivery projects. The company partnered with Walmart in 2021, and in May 2022, the two announced plans to expand drone delivery services to 4 million homes in six states. In August, DroneUp said it would end Walmart drone delivery in three states to focus on perfecting its service in the Dallas-Fort Worth area.

In August 2023, DroneUp announced it would launch an 18-month project to deliver medical supplies and hypertension medication to patients on the Eastern Shore and Tangier Island, in partnership with Riverside Health System, Old Dominion University and others.

Founded in 2006, DroneUp has about 250 employees, of which about 100 are in Virginia. In August 2022, DroneUp announced it planned to add 655 jobs as part of an expansion that includes establishing a $20 million drone testing, training and research and development center at Richard Bland College in Dinwiddie County.

Dollar Tree CFO stepping down

Dollar Tree is leaving the discount retailer after two years, the company announced Wednesday. Davis will stay through the filing of the company’s fiscal 2024 report to the Securities and Exchange Commission, said.

“We thank Jeff for his service and appreciate the contributions he made to the business during his time with Dollar Tree and Family Dollar. We remain committed to our business strategy and are focused on driving lasting value for our customers and shareholders,” interim CEO Michael C. Creedon Jr. said in a statement.

Davis’ departure comes after former CEO and board chairman Rick Dreiling stepped down in November, citing health issues.

Davis was hired following a C-suite shakeup in 2022, with Creedon coming aboard as chief operating officer, among other hires. Dreiling, too, was hired in 2022, replacing former CEO Mike Witynski.

A graduate of Penn State and the Katz Graduate School of Business at the University of Pittsburgh, Davis was previously treasurer of Walmart and served as for JCPenney as well as Qurate Group, the conglomerate that owns QVC, HSN and Zulily.

Davis’ departure was announced Wednesday alongside Dollar Tree’s third-quarter results and the retailer’s full-year outlook for fiscal 2024; the company said it anticipates net sales of $30.7 billion to $30.9 billion for the year, slightly up from $30.6 billion in revenue reported last year. In the third quarter, consolidated net sales increased 3.5% to $7.56 billion, compared with the third quarter of 2023.

The company has closed approximately 670 of its Family Dollar stores this year, and expects to close 25 more by the end of the fiscal year, and continues to explore a potential sale or spinoff of the Family Dollar business segment, it said Wednesday. A company, Dollar Tree operates more than 16,000 stores in the United States and Canada.

Washington Commanders hire Campbell’s exec as team president

Mark Clouse, and CEO of food giant The , will be the ‘ next team president, the -based team announced Tuesday. Clouse starts his new post in late January.

He replaces Jason Wright, the NFL’s first Black team president, who was hired in August 2020 by former team owner Dan Snyder, who had hired Wright to shepherd the franchise through a difficult period when Snyder and some of the team’s former front office staffers were embroiled in a sexual harassment scandal and NFL investigations related to the team’s allegedly toxic workplace.

In July, the team confirmed that Wright would not be serving as team president during the current NFL season, and that he would serve as a senior adviser until his departure, focusing on securing naming rights for a new stadium.

Clouse comes from the corporate world to the Commanders, which is now owned by billionaire investor Josh Harris, who led a group of investors in acquiring the team for a record $6.05 billion in 2023 from Snyder. Clouse will report directly to Harris.

In October, Campbell’s partnered with Harris and David Blitzer’s management company Harris Blitzer Sports & Entertainment as an official corporate partner to the company’s four professional sports teams — the Commanders, the Philadelphia 76ers NBA team, the NHL’s New Jersey Devils and the Joe Gibbs Racing NASCAR franchise.

“In Mark we have found a dynamic leader with a stellar track record of guiding organizations to excellence, building brands that connect deeply with consumers, and ultimately delivering best-in-class experiences and lasting memories,” Harris said in a statement. “Mark shares our commitment to using the power of the Commanders franchise to bring together. As a military veteran and accomplished business builder, he has a proven ability to strengthen both the organizations he leads and the communities he serves. I am confident in Mark’s dedication to building a championship-caliber organization and to support operations in our drive for excellence on the field.”

Clouse joined New Jersey-based Campbell’s in 2019, overseeing popular food brands such as Goldfish, Rao’s, Pepperidge Farm and the eponymous soup brand. A graduate of West Point, where he was a collegiate basketball player, Clouse served in the Army and retired as a captain. He held positions at Kraft Foods, Mondelez and Pinnacle Foods before working at Campbell’s.

“I am incredibly grateful to and the Washington Commanders ownership group for the opportunity to lead this iconic franchise into a new chapter of growth,” Clouse said. “The Commanders’ passionate fanbase, which has stood by this team for decades, deserves nothing less than our unwavering commitment to excellence. I look forward to supporting ownership, as well as Adam Peters and Dan Quinn, in doing everything in our power to build a championship-caliber organization.”

Navy awards Raytheon potential $903.9M contract

The Navy has awarded , a subsidiary of Fortune 500 aerospace and , a worth up to $903.9 million, if all options are exercised, to provide support for a system, the U.S. Department of announced Monday. 

The initial $34 million firm-fixed-price, cost-plus-fixed-fee, cost-plus-incentive-fee and cost only contract covers design, development, integration, test and maintenance of system capabilities for the design agent and engineering support efforts for the Cooperative Engagement Capabilities (CEC) sensor system. CEC allows data from sensors in different places to provide a single integrated picture, meaning multiple ships, aircraft and land units can share radar target measurements simultaneously in real time.

Purchases for the makes up 65% of the contract. The contract also includes purchases for the governments of Japan (15%), Australia (13%), Canada (6%) and Germany (1%) under the Foreign Military Sales program, which allows the United States’ international partners to purchase defense equipment and services. 

The U.S. Navy will pay $20.54 million of the contract, with $1.7 million coming from the United States . The governments of Japan, Australia, Canada and Germany will pay about $11.8 million with the contract. About $2.89 million will expire at the end of the current fiscal year. 

Work will be performed in St. Petersburg and Largo, Florida as well as Maynard, Massachusetts. Work is expected to be completed by November 2025. If all options are exercised, work will continue through November 2029.

Last week, the Navy awarded Raytheon a $590.8 million contract to produce nine Next Generation Jammer Mid-Band (NGJ-MB) ship sets for the military branch’s EA-18 Growler electronic warfare aircraft and four more sets for the Royal Australian . The NGJ-MB is an electronic attack system.

With more than 185,000 employees globally, RTX reported $68.9 billion in sales in 2023. Raytheon is also based in Arlington.

U.Va. Darden School dean reappointed to third term

Scott C. Beardsley, of the ‘s School of Business, has been reappointed to his third term as dean, which starts Aug. 1, 2025, and extends through August 2029, U.Va. announced Wednesday.

Named dean in 2015, Beardsley is now the university’s longest serving current dean and has raised more than $610 million for the school over the past decade, as well as opening a satellite campus in County; hiring more than 60 faculty members; hitting application and enrollment records among women, military veterans, underrepresented minorities, international and first-generation students; and launching the $150 million student housing project on the ‘s grounds. During his tenure, Darden also has been named the top public MBA program in Bloomberg Businessweek (2022-24) and Poets & Quants (2023 and 2024). Beardsley was named U.Va.’s Dean of the Year in 2020.

“I’m grateful for the opportunity to continue to work with the incredible community of the in pursuing our mission to improve the world by developing responsible leaders, and to my wife Claire, and family who have been critical to any success I’ve had,” Beardsley said in a statement. “I am invigorated to continue pursuing progress with all of our stakeholders to ensure that Darden cements its position as one of the best places to learn, teach, research and work in . In a world in which responsible remains at a premium, Darden can be a beacon of hope as we inspire and develop the leaders of today and the future.”

Beardsley added that his focus over the next five years will be on marking the Darden School’s 75th anniversary in 2030, as well as increasing scholarship funding and accessibility, and shepherding the school’s facilities master plan to completion.

Also the Charles C. Abbott Professor of Business, Beardsley holds a degree in electrical engineering from Tufts University, an MBA from the MIT Sloan School of Management and a doctorate in higher education management from the University of Pennsylvania. Beardsley worked for McKinsey & Co. for 26 years in New York City and in Brussels, Belgium. As of this year, he is finishing a part-time master’s in practical ethics at the University of Oxford’s Pembroke College.

 

Van maker repays state grant after Pittsylvania layoffs

Morgan Olson has paid back a $500,000 Virginia Port Authority grant after the Michigan-based manufacturer of walk-in step vans failed to employ an agreed-upon number of workers at its facility at the Industrial Park in .

It’s not the jubilant future economic developers had envisioned when celebrating the company’s October 2019 announcement of plans to invest $57.8 million to bring its operations to a former Ikea facility at the park located outside . At that time, the company, which is a business unit of Texas-based JB Poindexter & Co., expected to create 703 jobs.

By summer 2020, had its 925,000-square-foot automotive manufacturing facility operating in Pittsylvania.

Two years later, the Port of Virginia awarded Morgan Olson a $500,000 Port of Virginia Economic and Infrastructure Development Grant, an incentive designed to encourage businesses to locate maritime-related employment centers in the commonwealth or to expand existing facilities. At that time, the company was well on its way to building its promised workforce in Virginia. The Pittsylvania facility employed 612 workers in October 2022, according to a news report.

But circumstances change. Morgan Olson laid off 435 employees at Cane Creek Centre in 2023 and an additional 130 this August, according to the Virginia Partnership. Currently, there’s only “limited staff there in the facility,” according to Matt Rowe, director of economic development for Pittsylvania County.

On Sept. 25, Stephen Edwards, CEO and executive director of the Virginia Port Authority, which runs the Port of Virginia, sent a letter to Greg Pairitz, vice and of Morgan Olson, asking for the state grant to be repaid due to failure to comply with “one of more” obligations agreed to in a memorandum of understanding.

“The VPA has determined that Morgan Olson has failed to maintain at least 25 new, permanent full-time positions prior to the performance date of June, 30, 2025,” the letter states.

Edwards gave Morgan Olson 60 days to repay the money. The company repaid the funds on Nov. 20, according to Joe Harris, a spokesperson for the VPA.

A request for comment to a spokesperson for Morgan Olson was not immediately returned.

Rowe on Tuesday remained optimistic about the situation.

“I think the fact that Morgan Olson just came and immediately paid back the $500,000 to Virginia is a very strong testament to them as a company,” he said. “I think it also speaks very strongly to their financial well-being and [to] their commitment to Virginia.”

Rowe speculated that the Morgan Olson facility could have a second chapter. “There’s certain contracts that can’t be publicly discussed that Morgan Olson is negotiating,” he says.

If the Cane Creek facility isn’t occupied by the van maker, Rowe suggested JB Poindexter & Co. could find another use for it.

“The value proposition to the parent company is just too strong for them to not utilize that space,” he says.

In regular talks with Morgan Olson leaders, Rowe said, “they have stressed over and over again that they’re committed to this community, to this facility.”

Rowe speculated that the layoffs were due to Morgan Olson losing a key client. The popularity of electric vehicles and high interest rates, he thinks, could also have impacted customer demand for the company’s custom commercial step vans.

“When the interest rates are high, you tend to make do with what you have, or repair what you have, instead of going and buying something,” he says.

A 2019 announcement about the facility noted Morgan Olson was eligible for several state and local grants, including a $7 million custom performance grant from the General Assembly’s and $1.195 million from the Tobacco Region Opportunity Fund.

Jordan Butler, public relations director for the , said on Wednesday that the commission paid $770,775 of those funds to Morgan Olson in May 2024 for creating 561 jobs. Company leaders could have requested the remainder of the funds at the end of September, he noted, if they had created 703 jobs at the Pittsylvania County facility. 

The commission changed grant agreements several years ago, Butler added, to require that the created jobs are maintained throughout the performance period and are only dispersed once at the end of the performance period. “So good news is that that this situation couldn’t occur again,” he said.

A spokesperson for VEDP did not immediately respond to a request for comment Tuesday.

Editor’s note: This story has been updated to include information about the Tobacco Regional Opportunity Fund.