14. Segment Information

As a public reporting 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 All Other with the Company’s H Contract business and the remains of the Company’s Homeware division, which was shuttered earlier in fiscal 2018. 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, the latter 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:

	Thirteen Weeks Ended										Thirty-Nine Weeks Ended
	October 28, 2018					October 29, 2017					October 28, 2018					October 29, 2017
			% Net					% Net					% Net					% Net
Net Sales			Sales					Sales					Sales					Sales
Hooker Branded	$	46,479		27.1	%	$	42,573		27.0	%	$	129,801		26.9	%	$	120,934		27.2	%
Home Meridian		95,013		55.4	%		92,068		58.3	%		266,631		55.2	%		262,173		58.9	%
All Other		29,982		17.5	%		23,293		14.7	%		86,594		17.9	%		62,007		13.9	%
Consolidated	$	171,474		100.0	%	$	157,934		100.0	%	$	483,026		100.0	%	$	445,114		100.0	%

Gross Profit
Hooker Branded	$	14,334		30.8	%	$	13,096		30.8	%	$	41,372		31.9	%	$	38,177		31.6	%
Home Meridian		15,382		16.2	%		15,808		17.2	%		43,196		16.2	%		42,875		16.4	%
All Other		6,120		20.4	%		5,374		23.1	%		18,879		21.8	%		14,486		23.4	%
Consolidated	$	35,836		20.9	%	$	34,278		21.7	%	$	103,447		21.4	%	$	95,538		21.5	%

Operating Income
Hooker Branded	$	5,712		12.3	%	$	4,964		11.7	%	$	17,381		13.4	%	$	15,047		12.4	%
Home Meridian		4,829		5.1	%		4,637		5.0	%		10,168		3.8	%		10,748		4.1	%
All Other		1,720		5.7	%		1,735		7.4	%		5,960		6.9	%		4,706		7.6	%
Consolidated	$	12,261		7.2	%	$	11,336		7.2	%	$	33,509		6.9	%	$	30,501		6.9	%

Capital Expenditures
Hooker Branded	$	350				$	268				$	699				$	1,259
Home Meridian		143					580					330					1,090
All Other		1,138					145					1,435					359
Consolidated	$	1,631				$	993				$	2,464				$	2,708

Depreciation & Amortization
Hooker Branded	$	984				$	490				$	1,479				$	1,452
Home Meridian		851					673					1,795					2,012
All Other		1,248					539					2,284					935
Consolidated	$	3,083				$	1,702				$	5,558				$	4,399

	As of October 28,					As of January 28,
	2018		%Total			2018		%Total
Identifiable Assets			Assets					Assets
Hooker Branded	$	135,060		47.6	%	$	129,986	47.8	%
Home Meridian		109,725		38.7	%		107,139	39.6	%
All Other		39,088		13.8	%		34,394	12.6	%
Consolidated	$	283,873		100.0	%	$	271,519	100.0	%
Consolidated Goodwill and Intangibles		76,409					78,197
Total Consolidated Assets	$	360,282				$	349,716

Sales by product type are as follows:

	Net Sales (in thousands)
	Thirteen Weeks Ended										Thirty-Nine Weeks Ended
	October 28, 2018		%Total			October 29, 2017		%Total			October 28, 2018		%Total			October 29, 2017		%Total
Casegoods	$	108,584		63	%	$	109,583		69	%	$	304,370		63	%	$	315,415		71	%
Upholstery		62,890		37	%		48,351		31	%		178,656		37	%		129,699		29	%
	$	171,474		100	%	$	157,934		100	%	$	483,026		100	%	$	445,114		100	%