NOTE 15 – SEGMENT INFORMATION

As a public entity, we are required to present disaggregated information by segment using the management approach. The objective of this approach is to allow users of our financial statements to see our business through the eyes of management based upon the way management reviews performance and makes decisions. The management approach requires segment information to be reported based on how management internally evaluates the operating performance of the company’s business units or segments. The objective of this approach is to meet the basic principles of segment reporting as outlined in ASC 280 Segments (“ASC 280”), which are to allow the users of our financial statements to:

§	better understand our performance;

§	better assess our prospects for future net cash flows; and

§	make more informed judgments about us as a whole.

We define our segments as those operations our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources. We measure the results of our segments using, among other measures, each segment’s net sales, gross profit and operating income, as determined by the information regularly reviewed by the CODM.

We continually monitor our reportable segments for changes in facts and circumstances to determine whether changes in the identification or aggregation of operating segments are necessary. In the fourth quarter of fiscal 2018, we updated our reportable segments as follows: Hooker Upholstery was aggregated with Hooker Casegoods and reported as the Hooker Branded segment. The domestic upholstery operations of Shenandoah Furniture, Sam Moore and Bradington-Young were moved into the All Other segment with Company’s H Contract business and the remains on the Company’s Homeware division, which was shuttered earlier in the year. The Home Meridian segment remains unchanged. Therefore, for financial reporting purposes, we are organized into two reportable segments and “All Other”, which includes the remainder of our businesses:

§	Hooker Branded, consisting of the operations of our imported Hooker Casegoods and Hooker Upholstery businesses;

§	Home Meridian, a business acquired at the beginning of fiscal 2017, is a stand-alone, mostly autonomous business that serves a different type or class of customer than do our other operating segments and at much lower margins; and

All Other, which includes the domestic upholstery manufacturing operations of Bradington-Young, Sam Moore and Shenandoah Furniture and H Contract and Homeware, two businesses started in 2013. None of these operating segments met the ASC 280 aggregation criteria nor were individually reportable; therefore, we combined them in “All Other” in accordance with ASC 280. We note that Homeware failed to reach critical mass and its operations were wound down during the fiscal 2018 second quarter.

The following table presents segment information for the periods, and as of the dates, indicated:

	Fifty-Two Weeks Ended					Fifty-Two Weeks Ended					Fifty-Two Weeks Ended
	January 28, 2018					January 29, 2017					January 31, 2016
			% Net					% Net					% Net
Net Sales			Sales					Sales					Sales
Hooker Branded	$	166,754		26.9	%	$	158,685		27.5	%	$	173,011		70.0	%
Home Meridian		365,472		58.9	%		344,635		59.7	%		-
All other		88,406		14.2	%		73,899		12.8	%		73,988		30.0	%
Consolidated	$	620,632		100.0	%	$	577,219		100.0	%	$	246,999		100.0	%

Gross Profit
Hooker Branded	$	53,007		31.8	%	$	51,653		32.6	%	$	51,693		29.9	%
Home Meridian		62,325		17.1	%		57,289		16.6	%		-
All other		19,485		22.0	%		17,179		23.2	%		16,995		23.0	%
Consolidated	$	134,817		21.7	%	$	126,121		21.8	%	$	68,688		27.8	%

Operating Income
Hooker Branded	$	21,732		13.0	%	$	20,203		12.7	%	$	20,024		11.6	%
Home Meridian		18,265		5.0	%		14,375		4.2	%		-
All other		5,487		6.2	%		4,642		6.3	%		4,238		5.7	%
Consolidated	$	45,484		7.3	%	$	39,220		6.8	%	$	24,262		9.8	%

Capital Expenditures
Hooker Branded	$	1,372				$	1,193				$	2,219
Home Meridian		1,098					280					-
All other		696					981					628
Consolidated	$	3,166				$	2,454				$	2,847

Depreciation & Amortization
Hooker Branded	$	1,956				$	2,214				$	1,808
Home Meridian		2,716					4,704					-
All other		1,975					1,082					1,138
Consolidated	$	6,647				$	8,000				$	2,946

	As of January 28,					As of January 29,
	2018		%Total			2017		%Total
Assets			Assets					Assets
Hooker Branded	$	129,986		47.8	%	$	137,095		50.9	%
Home Meridian		107,139		39.6	%		107,101		39.7	%
All other		34,394		12.6	%		25,390		9.4	%
Consolidated Assets	$	271,519		100.0	%	$	269,586		100.0	%
Consolidated Goodwill and Intangibles		78,197					49,110
Total Consolidated Assets	$	349,716				$	318,696

Sales by product type are as follows:

	Net Sales
	Fiscal
	2018				2017				2016

Casegoods	$	404,808	65	%	$	391,347	68	%	$	158,963	64	%
Upholstery		215,824	35	%		185,872	32	%		88,036	36	%
	$	620,632			$	577,219			$	246,999

No significant long-lived assets were held outside the United States at either January 28, 2018 or January 31, 2016. International customers accounted for 2.5% of consolidated invoiced sales in fiscal 2018, 2% fiscal 2017 and 5% of consolidated invoiced sales in fiscal 2016. We define international sales as sales outside of the United States and Canada.