−Removed: The coronavirus global pandemic ha s caused a significant disruption in non-essential retail commerce and may have a material adverse impact upon our financial condition and results of operations.
+Added: The coronavirus global pandemic which caused a significant disruption in non-essential retail commerce may continue to have a material adverse impact upon our financial condition and results of operations.
On March 11, 2020, the World Health Organization declared the current coronavirus (“COVID-19”) outbreak to be a global pandemic.
−Removed: In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.
+Added: In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.
These measures have had a significant adverse impact upon many sectors of the economy, including non-essential retail commerce.
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As of the date of this filing, we have reopened all of our retail stores.
−Removed: However, our manufacturing operations continue in the ramp up phase and are currently not producing at the incoming rate of wholesale orders.
−Removed: We are unable to predict when and how quickly we will be able to resume full manufacturing operations and the impact this may have on our financial statements in the near and long term.
−Removed: Whereas most state and local governments have begun to ease restrictions on commercial retail activity, it is possible that a resurgence in COVID-19 cases could prompt a return to tighter restrictions in certain areas of the county.
−Removed: Furthermore, the economic recession brought on by the pandemic may have a continuing adverse impact on consumer demand for our products.
−Removed: Should these conditions persist for a prolonged period beyond the second quarter, this may have a continuing material adverse impact on our ultimate financial condition and liquidity.
+Added: However, continuing logistical challenges faced by the entire home furnishings industry resulting from COVID-related labor shortages and supply chain disruptions have created significant delays in order fulfillment and increasing backlogs as we have not been able to produce and ship at the incoming rate of wholesale and retail orders.
+Added: Although we are unable to predict with certainty, we expect the pace of manufacturing and shipping to increase and the level of wholesale and retail backlogs to begin decreasing by the end of the fourth quarter of 2020.
+Added: If we are unable to resolve the delays in order fulfillment it is possible that some of our customers may begin to cancel existing orders and require refunds of deposits, which could have an adverse impact upon our liquidity and results of operations.
+Added: In addition, whereas most state and local governments have begun to ease restrictions on commercial retail activity, it is possible that a resurgence in COVID-19 cases could prompt a return to tighter restrictions in certain areas of the country.
+Added: Furthermore, the economic recession brought on by the pandemic may eventually have an adverse impact on consumer demand for our products.
+Added: Should these conditions persist for a prolonged period beyond this quarter, this may have a continuing material adverse impact on our ultimate financial condition and liquidity.
Apart from the above, there are no other changes to the Company’s risk factors as described in Item 1A.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.