Quantitative and Qualitative Disclosures About Market Risk
−Removed: We are exposed to various types of market risk in the normal course of our business, including the impact of interest rate changes, raw materials price risk and changes in foreign currency exchange rates, which could impact our results of operations or financial condition.
+Added: are exposed to various types of market risk in the normal course of our business, including the impact of interest rate changes, raw
+Added: materials price risk and changes in foreign currency exchange rates, which could impact our results of operations or financial condition.
We manage our exposure to this risk through our normal operating activities.
−Removed: Interest Rate Risk
−Removed: Borrowings under our revolving credit facility, the Secured Term Loan and the Unsecured Term loan bear interest based on BSBY plus 1.00%, BSBY plus 0.90% and BSBY plus 1.40%, respectively.
−Removed: As such, these debt instruments expose us to market risk for changes in interest rates.
−Removed: There was no outstanding balance under our revolving credit facility as of October 27, 2024 other than standby letters of credit in the amount of $6.7 million.
−Removed: As of October 27, 2024, $22.0 million was outstanding under our term loans.
−Removed: A 1% increase in the BSBY rate would result in an annual increase in interest expenses on our terms loans of approximately $212,000.
−Removed: Raw Materials Price Risk
−Removed: We are exposed to market risk from changes in the cost of raw materials used in our domestic upholstery manufacturing processes;
−Removed: principally, wood, fabric, and foam products.
+Added: Borrowings under the Amended and Restated Loan Agreement
+Added: will bear interest at a rate per annum equal to the then-current Term SOFR Rate for a period of one month plus 0.10% plus a margin of
+Added: The Term SOFR Rate will be adjusted on a monthly basis.
+Added: As such, these debt instruments expose us to market risk for changes in
+Added: interest rates.
+Added: As of May 4, 2025, we had $22.6 million in principal amount of outstanding loans.
+Added: At current borrowing levels, a 1% increase
+Added: in the SOFR rate would result in an annual increase in interest expenses of approximately $226,000.
+Added: There were no additional borrowings
+Added: outstanding under the Amended and Restated Loan Agreement as of May 4, 2025.
+Added: Materials Price Risk
+Added: are exposed to market risk from changes in the cost of raw materials used in our domestic upholstery manufacturing processes;
+Added: wood, fabric, and foam products.
Increases in home construction activity could result in increases in wood and fabric costs.
−Removed: Additionally, the cost of petroleum-based foam products we utilize are sensitive to crude oil prices, which vary due to supply, demand, and geo-political factors.
−Removed: Currency Risk
−Removed: For imported products, we generally negotiate firm pricing denominated in U.S.
−Removed: Dollars with our foreign suppliers, typically for periods of at least one year.
+Added: Additionally,
+Added: the cost of petroleum-based foam products we utilize are sensitive to crude oil prices, which vary due to supply, demand, and geo-political
+Added: imported products, we generally negotiate firm pricing denominated in U.S.
+Added: Dollars with our foreign suppliers, typically for periods
+Added: of at least one year.
We accept the exposure to exchange rate movements beyond these negotiated periods.
−Removed: We do not use derivative financial instruments to manage this risk but could choose to do so in the future.
−Removed: Most of our imports are purchased from suppliers located in Vietnam and China.
+Added: We do not use derivative
+Added: financial instruments to manage this risk but could choose to do so in the future.
+Added: Most of our imports are purchased from suppliers
+Added: located in Vietnam and China.
The Chinese currency floats within a limited range in relation to the U.S.
−Removed: Dollar, resulting in exposure to foreign currency exchange rate fluctuations.
−Removed: Since we transact our imported product purchases in U.S.
+Added: Dollar, resulting in exposure
+Added: to foreign currency exchange rate fluctuations.
+Added: we transact our imported product purchases in U.S.
Dollars, a relative decline in the value of the U.S.
−Removed: Dollar could increase the price we pay for imported products beyond the negotiated periods.
−Removed: We generally expect to reflect substantially all of the effect of any price increases from suppliers in the prices we charge for imported products.
−Removed: However, these changes could adversely impact sales volume or profit margins during affected periods.
+Added: Dollar could increase the price
+Added: we pay for imported products beyond the negotiated periods.
+Added: We generally expect to reflect substantially all of the effect of any price
+Added: increases from suppliers in the prices we charge for imported products.
+Added: However, these changes could adversely impact sales volume or
+Added: profit margins during affected periods.
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.