What changed in this filing

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Item 1. Business

2022-04-15 compared with 2021-04-16 · 92 added, 72 removed, 112 unchanged (59% of the section changed)

Hooker Furniture Corporation, incorporated in Virginia in 1924, is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture and fabric-upholstered furniture for the residential, hospitality and contract markets.

Hooker Furnishings Corporation, incorporated in Virginia in 1924, is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture, fabric-upholstered furniture and outdoor furniture for the residential, hospitality and contract markets.

We also domestically manufacture premium residential custom leather and custom fabric-upholstered furniture.

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retailers, according to a 2021 survey by a leading trade publication.

We believe that consumer tastes and channels in which they shop for furniture are evolving at a rapid pace and we continue to change to meet these demands.

Our strategy is to leverage the financial strength afforded us by Hooker’s slower-growing but highly profitable traditional businesses in order to boost revenues and earnings both organically and by acquiring companies selling in faster-growing channels of distribution in which our traditional businesses are under-represented.

Consequently, Hooker acquired Home Meridian on February 1, 2016 and Shenandoah Furniture on September 29, 2017.

Recent Sunset Acquisition

On January 31, 2022, the first day of our 2023 fiscal year, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Sunset HWM, LLC (“Sunset West”) and its three members (the “Sunset West Members”) to acquire substantially all of the assets of Sunset West (the “Sunset Acquisition”).

Simultaneously, we closed on the transaction by paying $23.5 million in cash and $2 million subject to an escrow arrangement and possible earn-out payments to the Sunset West Members up to an aggregate of $4 million with the closing cash consideration subject to adjustment for customary working capital estimates.

Under the Asset Purchase Agreement, the Company also assumed specified liabilities of Sunset West.

Sunset West is a leading West Coast-based manufacturer of outdoor furniture with its headquarters in Vista, California.

The transaction enables us to immediately gain market share in the growing outdoor furniture segment of the industry with one of the most respected brands in the category.

For more information regarding the Sunset Acquisition, please see Note 20 Subsequent Events to our Consolidated Financial Statements on page F-31.

Reportable Segments

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Our other businesses are aggregated into “All Other”.

See Note 17 to our consolidated financial statements for additional financial information regarding our operating segments.

See Note 16 -Segment Information to our Consolidated Financial Statements for additional financial information regarding our operating segments.

Our product lines cover the design spectrum of residential furniture:

traditional, contemporary and transitional.

Further, our product lines are in the “good”, “better” and “best” product categories, which carry medium and upper price points and consist of:

Further, our product lines are in the “good”, “better” and “best” product categories, which carry medium and upper price points.

Hooker Furnishings Corporation consists of the following three operating segments and “All Other”:

The Hooker Branded segment which includes two businesses:

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The Home Meridian segment which includes the following brands/marketing units:

Accentrics Home, home furnishings centered around an eclectic mix of unique pieces and materials that offer a fresh take on home fashion focused on e-commerce customers;

Accentrics Home, home furnishings centered around an eclectic mix of unique pieces and materials that offer a fresh take on home fashion;

Pulaski Furniture, casegoods covering the complete design spectrum in a wide range of bedroom, dining room, accent and display cabinets at medium price points;

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Samuel Lawrence Hospitality, a designer and supplier of hotel furnishings targeted toward four and five-star hotels;

HMidea, 2019 start-up that provides better-quality, ready-to-assemble furniture to mass marketers and e-commerce customers and includes our Clubs channel.

HMidea, ready-to-assemble (RTA) furniture category and Clubs channel in its wind-down phase.

Due to low profitability, we began exiting the RTA furniture category and warehouse clubs (Clubs) channel in fiscal 2022.

The Domestic Upholstery segment which includes the following operations:

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Lifestyle Brands, a business started in fiscal 2019 targeted at the interior designer channel.

While we are still analyzing Sunset West’s operations and the requirements of ASC 280:

Segment Reporting , we anticipate Sunset West will be included in the Domestic Upholstery segment.

Imported Products

We have sourced products from foreign manufacturers for over thirty years, predominantly from Asia.

Imported casegoods and upholstered furniture together accounted for approximately 83% of our net sales in both fiscal 2021 and fiscal 2020 and 84% of our net sales in fiscal 2019.

Our imported furniture business is subject to inherent risks in importing products manufactured abroad, including, but not limited to, supply disruptions and delays due to a variety of reasons, including the coronavirus (COVID-19) pandemic and possible similar health-related issues, currency exchange rate fluctuations, transportation-related issues, economic and political developments and instability, as well as the laws, policies and actions of foreign governments and the United States.

These laws, policies and actions may include regulations affecting trade or the application of tariffs, much like the current 25% tariff on certain goods imported into the United States from China, including almost all furniture and furniture components manufactured in China since fiscal 2019.

In response to these tariffs, we began re-sourcing products from non-tariff countries, primarily Vietnam, and reduced our Chinese imports to less than 20% by the end of fiscal 2021.

Imported casegoods and upholstered furniture together accounted for approximately 82% in fiscal 2022 and 83% of our net sales in both fiscal 2021 and fiscal 2020.

Our imported furniture business is subject to inherent risks in importing products manufactured abroad, including, but not limited to, supply disruptions and delays due to a variety of reasons, including our foreign suppliers’ factory capacities, factory shutdowns, and delays caused by the COVID-19 pandemic and possible similar health-related issues, much higher ocean freight costs, container and vessel space availability, currency exchange rate fluctuations, economic and political developments and instability, as well as the laws, policies and actions of foreign governments and the United States.

These laws, policies and actions may include regulations affecting trade or the application of tariffs, much like the 25% tariff on certain goods imported into the United States from China, including almost all furniture and furniture components manufactured in China since fiscal 2019.

In response to these tariffs, we began re-sourcing products from non-tariff countries, primarily Vietnam, and to a lesser extent Malaysia, and reduced our Chinese imports to less than 15% by the end of fiscal 2022.

Because of the large number and diverse nature of the foreign suppliers from which we source our imported products, we have flexibility in the sourcing of products among any particular supplier or country.

However, a disruption in our supply chain from a major supplier or from Vietnam or China in general, could significantly compromise our ability to fill customer orders for products manufactured at that factory or in that country.

However, a disruption in our supply chain from a major supplier or from Vietnam, China, or Malaysia in general, could significantly compromise our ability to fill customer orders for products manufactured at that factory or in that country.

Supply disruptions and delays on selected items could occur for six months or longer.

If we were to be unsuccessful in obtaining those products from other sources or at a comparable cost, a disruption in our supply chain from a major furniture supplier, or from Vietnam or China in general, could decrease our sales, earnings and liquidity.

In fiscal 2021, many of our Chinese suppliers were closed or operating at reduced capacity due to the effects of COVID-19 and we experienced some out-of-stocks on better selling items.

We offered and sold available goods on hand and in transit but were unable to fully mitigate the entire sales loss from these out-of-stocks.

These suppliers were in the process of returning to full capacity when the COVID-19 crisis hit the U.S., resulting in order cancellations by many furniture customers, which caused many furniture wholesalers in the U.S.

to cancel production orders with their Asian suppliers.

Consequently, some supplier locations closed temporarily or reduced capacity and we experienced outages in select products as a result.

While most of our Asian suppliers have returned to near full capacity, demand for furniture products has surged to historic levels.

This unusually high demand has caused delays in the receipt of goods as suppliers scramble to fill orders, obtain shipping containers and steamship bookings.

Additionally, port congestion has led to delays in unloading furniture once it reaches US ports.

All of these factors, combined with the production halt that regularly occurs at Chinese and Vietnamese New Year holidays, have significantly lengthened the time it takes to receive goods and our order backlog is at historic levels.

Given the sourcing capacity available in Vietnam, China and other low-cost producing countries, we currently believe the risks from these potential supply disruptions are manageable;

If we were to be unsuccessful in obtaining those products from other sources or at a comparable cost, a disruption in our supply chain from a major furniture supplier, or from Vietnam, China, or Malaysia in general, could decrease our sales, earnings and liquidity.

In the summer of calendar 2021, many of our Vietnam and Malaysia suppliers were temporarily closed or operating at reduced capacity due to a COVID-19-related lockdown and did not fully resume until after the Lunar New Year holidays in calendar 2022.

Slower-than expected re-openings and delays at the factories, along with constrained container and steamship availability, negatively impacted shipments and sales at our Home Meridian segment and the inventory levels at our Hooker Branded segment, which resulted in out-of-stock issues and decreased sales.

Additionally, port congestion has led to delays in unloading furniture once it reaches U.S.

All of these factors, combined with the production halt that regularly occurs at the Lunar New Year holidays, have significantly lengthened the time it takes to ship and receive goods and our order backlog is at historic levels.

Given the sourcing capacity available in Vietnam, China, Malaysia and other low-cost producing countries, we currently believe the risks from these potential supply disruptions are manageable;

however, we have limited insight into the extent to which our business could be further impacted by COVID-19 and there are many unknowns including, how long we will be impacted, the severity of the impacts and the probability of a recurrence of COVID-19 or similar regional or global pandemics.

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Dollars, typically for a term of at least one year.

However, under certain circumstances, we may re-negotiate pricings during the year.

During fiscal 2022, due to the global supply chain crisis and inflation pressure in Asia and the U.S., we were forced to re-negotiate prices multiple times during the year.

We accept the exposure to exchange rate movements during these negotiated periods.

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We generally expect to reflect substantially all of the effects of any price increases from suppliers in the prices we charge for imported products.

However, these price changes could adversely impact sales volume and profit margin during affected periods.

However, these price changes could adversely impact sales volume and profit margin during the affected periods.

Conversely, a relative increase in the value of the U.S.

Dollar compared to the currencies from which we obtain our imported products could decrease the cost of imported products and favorably impact net sales and profit margins during affected period.

Dollar compared to the currencies from which we obtain our imported products could decrease the cost of imported products and favorably impact net sales and profit margins during the affected period.

However, due to other factors, such as inflationary pressure in China and other countries, we may not fully realize savings when exchange rates fall.

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We believe our sources for raw materials are adequate and that we are not dependent on any one supplier.

However, we have seen some delays in some pre-cut and sewn kits imported from China as a result of COVID-19 and our domestic upholstery segment is currently experiencing foam shortages due to a recent severe weather event in Texas that affected production of the by-products used in foam production.

Our five largest domestic upholstery suppliers accounted for 32% of our raw materials purchases for domestic upholstered furniture manufacturing operations in fiscal 2022.

Should disruptions with these suppliers occur, we believe we could successfully source these products from other suppliers without significant disruption to our operations.

Our home furnishings products are sold through a variety of retailers including independent furniture stores, department stores, mass merchants, national chains, warehouse clubs, catalog merchants, interior designers and e-commerce retailers.

One customer (Wayfair LLC and its subsidiaries) accounted for approximately 12% of our consolidated sales in fiscal 2021.

In the first half of fiscal 2022, we experienced shortages of foam which had a short-term but material impact on production levels, sales volume and operating efficiencies for that same period.

Should disruptions with these suppliers occur, other than macro disruptions affecting all such suppliers, we believe we could successfully source these products from other suppliers without significant disruption to our operations.

For example, as of the date of this report, our SFI division is in the process of re-sourcing Russian Birch plywood as a result of possible tariffs and lack of availability due to the current conflict in Ukraine.

Our home furnishings products are sold through a variety of retailers including independent furniture stores, department stores, mass merchants, national chains, catalog merchants, interior designers, e-commerce retailers and warehouse clubs.

No single customer accounted for more than 8% of our consolidated sales in fiscal 2022.

Our top five customers accounted for approximately 26% of our fiscal 2022 consolidated sales.

The loss of any one or more of these customers would have a material adverse impact on our business.

Roughly 2% of our sales in fiscal 2021 were to international customers, which we define as sales outside of the United States and Canada.

Roughly 2% of our sales in fiscal 2022 were to international customers.

We define sales to international customers as sales to customers outside of the United States and Canada since our independent domestic sales force services both countries.

The furniture industry is highly competitive and includes a large number of foreign and domestic manufacturers and importers, none of which dominates the market in our price points.

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Warehousing and Distribution

We distribute furniture to retailers directly from factories and warehouses in Asia via our container direct programs and from our distribution centers in Virginia, North Carolina and California, and in limited cases, from customer operated warehouses in strategic locations.

We are in the process of consolidating our Home Meridian segment’s East Coast warehousing operations into an 800,000 square foot distribution center in Liberty County, Georgia.

We distribute furniture to retailers directly from factories and warehouses in Asia via our container direct programs and from our distribution centers in Virginia, North Carolina, Georgia and California, and in limited cases, from customer operated warehouses in strategic locations.

We are in the process of consolidating our Home Meridian segment’s North Carolina warehousing operations into an 800,000 square foot distribution center in Liberty County, Georgia, which we occupied in the Fall of 2021.

We believe that this strategically located facility near the Port of Savannah and major interstate highways will allow us to more efficiently service our customers, reduce transportation costs and better position us for future growth.

This leased facility is currently under construction and we expect to occupy it in the Fall of 2021.

It is our policy and industry practice to allow order cancellation for casegoods up to the time of shipment or, in the case of container direct orders, up until the time the container is booked with the ocean freight carrier, therefore, customer orders for casegoods are not firm.

However, domestically produced upholstered products are predominantly custom-built and consequently, cannot be cancelled once the leather or fabric has been cut.

Additionally, our hospitality products are highly customized and are generally not cancellable.

Working Capital Practices

We generally import casegoods inventory and certain upholstery items in amounts that enable us to meet the delivery requirements of our customers, our internal in-stock goals and minimum purchase requirements from our sourcing partners.

However, during fiscal 2019 and 2020 we accelerated the delivery and subsequently increased inventory levels of some imported products from China due to the threat of tariffs on those products.

Inventory levels fell significantly during fiscal 2021 as compared to the end of fiscal 2020 due primarily to the COVID-19 crisis.

In early calendar 2020, Asian factories closed as COVID levels spiked in Asia.

They began to slowly re-open as levels spiked in the US and the demand for home furnishings plummeted.

As the initial crisis subsided in the US and demand surged, Asian manufacturing capacity was strained, and receipts of products slowed.

Additionally, container availability and steamship capacity became scarce.

We expect these conditions to improve as we move through fiscal 2022.

A large percentage of products sold are not warehoused by us but ship directly to our customers and thus not included as inventory.

We do not carry significant amounts of domestically produced upholstery inventory or hospitality products, as most of these products are built to order and are shipped shortly after their manufacture.

In the summer of calendar 2021, factories in Vietnam and Malaysia were temporarily closed due to COVID-related lockdown.

Slower than expected re-openings and factory delays led to low inventory receipts in the second half of the year in Hooker Branded segment, which ships the majority of its products from U.S.

warehouses to customers.

Additionally, container availability and steamship capacity continued to be challenging.

We expect these conditions to improve as we move through the second quarter of fiscal 2023.

Most of the Hooker Branded segment’s products are shipped from our US warehouses, while a large percentage of products sold at our Home Meridian segment are not warehoused by us but ship directly to our customers and thus not included as inventory.

However, Home Meridian’s warehoused inventory increased $7 million as compared to the end of the prior fiscal year, due primarily to increased inventory in Home Meridian’s Accentrics Home division.

Generally, our domestic upholstery segment products are made to order and shipped shortly after they are produced;

however, due to the domestic truck driver shortage, shipments of this segment’s finished goods slowed somewhat in fiscal 2022.

We do not carry significant amounts of hospitality products, as most of these products are built to order and are shipped shortly after their manufacture.

Accounts receivable:

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However, we may offer extended payment terms in certain circumstances, including to promote sales of our product.

We purchase accounts receivable insurance on certain customers or factor their receivables if their risk profile warrants it and the insurance is available.

We purchase accounts receivable insurance on certain customers if their risk profile warrants it and the insurance is available.

Due to the highly customized nature of our hospitality products, we typically require a 50% deposit with order, a 40% deposit before goods reach a U.S.

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Payment for our imported products warehoused first in Asia is due ten to fourteen days after our quality audit inspections are complete and the vendor invoice is presented.

Payment for goods which are shipped to our US warehouses or container direct to our customers FOB Origin is generally due upon proof of lading onto a US-bound vessel and invoice presentation;

Payment for goods which are shipped to our US warehouses or container direct to our customers FOB Origin (free on board origin, which means the buyer is responsible for the costs and liability of the freight during transport) is generally due upon proof of lading onto a US-bound vessel and invoice presentation;

however, payment terms, depending on the supplier, can stretch up to 45 days from invoice date.

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January 30, 2022

February 2, 2020

Reporting Entity

January 31, 2021

Reporting Segment

Hooker Branded

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We believe orders are generally good current indicators of sales momentum and business conditions.

However, except for custom or proprietary products, orders may be cancelled before shipment.

If the items ordered are in stock and the customer has requested immediate delivery, we generally ship products in about seven days or less from receipt of order;

however, orders may be shipped later if they are out of stock or there are production or shipping delays or the customer has requested the order to be shipped at a later date.

For the Hooker Branded and Domestic Upholstery segments and All Other, we generally consider unshipped order backlogs to be one helpful indicator of sales for the upcoming 30-day period, but because of our relatively quick delivery and our cancellation policies, we do not consider order backlogs to be a reliable indicator of expected long-term sales.

therefore, customer orders for casegoods are not firm.

However, domestically produced upholstered products are predominantly custom-built and consequently, cannot be cancelled once the leather or fabric has been cut.

Additionally, our hospitality products are highly customized and are generally not cancellable.

For the Hooker Branded and Domestic Upholstery segments and All Other, we generally consider backlogs to be one helpful indicator of sales for the upcoming 30-day period, but because of our relatively quick delivery and our cancellation policies, we do not consider order backlogs to be a reliable indicator of expected long-term sales.

We generally consider the Home Meridian segment’s backlog to be one helpful indicator of that segment’s sales for the upcoming 90-day period.

Due to (i) Home Meridian’s sales volume, (ii) the average sales order sizes of its mass, club and mega account channels of distribution, (iii) the proprietary nature of many of its products and (iv) the project nature of its hospitality business, for which average order sizes tend to be larger and consequently, its order backlog tends to be larger.

Due to (i) Home Meridian’s sales volume, (ii) the average sales order sizes of its mass, and mega account channels of distribution, (iii) the proprietary nature of many of its products and (iv) the project nature of its hospitality business, for which average order sizes tend to be larger and consequently, its order backlog tends to be larger.

There are exceptions to the general predictive nature of our orders and backlogs noted in this paragraph due to current demand and supply chain challenges related to the COVID-19 pandemic.

They are discussed in greater detail below and are essential to understanding our prospects.

At the end of fiscal 2021, order backlog increased $134.3 million or 118% as compared to the prior-year due to increased incoming orders in all three reportable segments as well as the supply chain disruptions in the Home Meridian segment and production delays in the Domestic Upholstery segment.

We are very encouraged by the current historic levels of orders and backlogs;

however, due to the current supply chain issues including the lack of shipping containers and vessel space and limited overseas vendor capacity, orders are not converting to shipments as quickly as could be expected in the pre-pandemic environment and we expect that to continue at least into the fiscal 2022 first quarter.

The current logistics challenges are slowing order fulfillment, particularly for Home Meridian whose average order sizes tend to be larger and more episodic versus orders for the traditional Hooker businesses, which tend to be smaller and more predictable.

Additionally, Home Meridian orders are programmed out and scheduled for delivery to its larger accounts further into the future than usual, which is also contributing to the increased backlog.

Generally, sales in our fiscal first quarter are lower than our other fiscal quarters due to the post-Chinese New Year shipping lag and sales in our fiscal fourth quarter are generally stronger due to the pre-Chinese New Year surge in shipments from Asia and the product introduction schedule of a major customer.

however, due to the current supply chain issues including the lack and cost of shipping containers and vessel space and limited overseas vendor capacity, orders are not converting to shipments as quickly as would be expected compared to the pre-pandemic environment and we expect that to continue at some level through at least the fiscal 2023 second quarter.

The current logistics challenges are slowing order fulfillment, particularly for Home Meridian whose average order sizes tend to be larger and more project-based versus orders for the traditional Hooker businesses, which tend to be smaller and more predictable.

Additionally, Home Meridian orders are programmed out and scheduled for delivery to its larger accounts further into the future than usual, which is also contributing to its large backlog.

At the end of fiscal 2022, order backlog increased $62 million or 25% as compared to the prior year end due largely to increased incoming orders in the Hooker Branded and Domestic Upholstery segments, and to a lesser degree, continued supply chain disruptions and delays affecting those segments.

Environmental Matters

As a part of our business operations, our manufacturing sites generate both non-hazardous and hazardous wastes;

the treatment, storage, transportation and disposal of which are subject to various local, state and national laws relating to environmental protection.

the treatment, storage, transportation and disposal of which are subject to various local, state and federal laws relating to environmental protection.

Our policy is to record monitoring commitments and environmental liabilities when expenses are probable and can be reasonably estimated.

The costs associated with our environmental responsibilities, compliance with federal, state and local laws regulating the discharge of materials into the environment, or costs otherwise relating to the protection of the environment, have not had and are not expected to have a material effect on our financial position, results of operations, capital expenditures or competitive position.

We are actively working to refine our environmental stewardship based on current best practices, shareholder expectations and regulatory developments.

Our environmental steering committee meets at least monthly to discuss the development and implementation of environmental initiatives and our Board is updated at least quarterly on those initiatives.

We note the following ongoing activities and new developments:

won the Sustainable Furnishings Council Green Ribbon Award for our Octavius Cocktail Table for design, aesthetics, sustainability, and ingenuity;

became EFEC (“Enhancing Furniture’s Environmental Culture”) certified at Hooker Branded, Sam Moore, and Bradington-Young facilities;

began using FSC (“Forest Stewardship Council”) compliant paper products and replaced Styrofoam packing with recyclable material for repacking in all distribution centers;

switched to LED lighting and cleaner-operating electric forklifts in many locations including our new distribution center in Georgia;

recycled, reused or repurposed substantially all of our pallets;

repurposed wood chips and sawdust from Bradington-Young and the Shenandoah Valdese and Mount Airy facilities for use in the farming industry;

disposed of eWaste using an EPA compliant eWaste recycling firm in all divisions;

provided monetary support to the Sustainable Furnishings Council, the Arbor Day Foundation, the Eco-Council of the Dan River basin, and Foothills Conservancy to support various projects including reforestation in Florida and clean-up efforts in local counties.

Human Capital Resources

As of January 30, 2022, we had 1,294 full-time employees, of which 242 were employed in our Hooker Branded segment, 371 were employed in our Home Meridian segment, 674 were employed in our Domestic Upholstery segment and 7 were employed in All Other.

1,091 employees were located in the United States and 203 were located in Asia.

None of our employees are represented by a labor union.

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The core values of our company include integrity, caring and inclusivity that affirms every individual.

Our leadership team is committed to fostering an environment where everyone is welcome, respected, listened to and valued for their unique contributions to the organization.

We focus on taking meaningful steps towards positive change and open mindedness.

The action steps that we are working on currently include:

A Diversity, Equity and Inclusion (DEI) Leadership Team has been formed with over 15 senior executives representing all divisions of the organization.

This group meets on a regular basis to guide both short- and long-term goals in addition to creating the overall strategic direction of DEI at our Company;

We have partnered with an external consultant to assist us with crafting a plan to embed DEI in our culture;

Diversity, Equity & Inclusion training is required of all domestic employees;

We examine our internal practices and policies around compensation, career development, and promotional opportunities to ensure that our practices are fair and equitable;

We are committed to proactively creating a more diverse organization by evolving our recruiting and talent acquisition methods and practices.

We offer competitive benefits to support the well-being of all employees including health insurance, disability and life insurance, wellness credit, paid time off, a 401(k) savings plan with company-match, an employee assistance program, and educational stipends to children and spouses of our employees (excluding family members of officers and board directors of the Company).

Our leadership team is committed to fostering an environment where everyone is welcomed, respected, listened to and valued for their unique contributions to the organization, and to providing a work environment that is free from all forms of harassment, discrimination and inequality.

We recruit, employ, train, promote and compensate our employees without regard to race, ethnicity, age, gender, gender identity, religion, national origin, citizenship, marital status, veteran’s status or disability.

All facilities have established human resource departments with formal hiring processes and controls in place to ensure ethical and fair hiring practices.

The action steps that we have taken recently or are working on currently include:

formed a Diversity, Equity, and Inclusion (DEI) leadership team with over 15 senior executives representing all divisions of the Company meeting on a regular basis to guide both short- and long-term goals in addition to creating the overall strategic direction of DEI at the Company;

formed an employee-led Diversity Council consisting of a diverse group of employees;

partner with an outside DEI consultant to assist in crafting a plan to embed DEI culturally;

provide diversity, equity and inclusion training for all employees;

formalized our Occupational Health and Safety Policy.

We compensate employees competitively relative to the industry and local labor market, and in accordance with all applicable federal, state and local wage, work hour, overtime and benefit laws.

In addition, we offer competitive benefits to support the well-being of all employees including health insurance, disability and life insurance, wellness credits, paid time off, a 401(k) savings plan with company-match, an employee assistance program, and educational stipends to children and spouses of our employees (excluding family members of officers and board directors of the Company).

Additionally, need and merit-based renewable undergraduate college scholarships are available through the Hooker Educational Scholarship Fund for children and spouses of full-time employees, excluding family members of current and former officers and board directors of the Company.

Patents and Trademarks

The Hooker Furniture, Bradington-Young, Sam Moore, Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, Room Gear, Right2Home, Home Meridian International, Prime Resources International, Accentrics Home, HMidea, Shenandoah, H Contract, Homeware and MARQ trade names represent many years of continued business.

The Hooker Furnishings, Hooker Furniture, Bradington-Young, Sam Moore, Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, Room Gear, Right2Home, Home Meridian International, Prime Resources International, Accentrics Home, HMidea, Shenandoah, H Contract, Homeware, MARQ and Sunset West trade names represent many years of continued business.

We believe these trade names are well-recognized and associated with quality and service in the furnishings industry.

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Additional Information

You may visit us online at hookerfurnishings.com, hookerfurniture.com, bradington-young.com, sammoore.com, homemeridian.com, pulaskifurniture.com, slh-co.com and hcontractfurniture.com.

We make available, free of charge through our Hooker Furniture website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports, and other documents as soon as practical after they are filed with or furnished to the Securities and Exchange Commission.

You may visit us online at hookerfurnishings.com, hookerfurniture.com, bradington-young.com, sammoore.com, homemeridian.com, pulaskifurniture.com, slh-co.com, hcontractfurniture.com and sunsetwestusa.com.

We make available, free of charge through our Hooker Furnishings website hookerfurnishings.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports, and other documents as soon as practical after they are filed with or furnished to the Securities and Exchange Commission.

A free copy of our annual report on Form 10-K may also be obtained by contacting Earl Armstrong, Corporate Controller and Secretary at earmstrong@hookerfurnishings.com or by calling 276-632-2133.

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.

What changed 10-K

Item 1. Business