NOTE 17 – 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 in fiscal year 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, Shenandoah Furniture, and H Contract and Homeware, two businesses started in 2013. None of these operating segments were individually reportable; therefore, we combined them in “All Other” in accordance with ASC 280.

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

	Fifty-Three Weeks Ended					Fifty-Two Weeks Ended					Fifty-Two Weeks Ended
	February 3, 2019					January 28, 2018					January 29, 2017
			% Net					% Net					% Net
Net Sales			Sales					Sales					Sales
Hooker Branded	$	178,710		26.2	%	$	166,754		26.9	%	$	158,685		27.5	%
Home Meridian		387,825		56.7	%		365,472		58.9	%		344,635		59.7	%
All other		116,966		17.1	%		88,406		14.2	%		73,899		12.8	%
Consolidated	$	683,501		100.0	%	$	620,632		100.0	%	$	577,219		100.0	%

Gross Profit
Hooker Branded	$	58,122		32.5	%	$	53,007		31.8	%	$	51,653		32.6	%
Home Meridian		62,850		16.2	%		62,325		17.1	%		57,289		16.6	%
All other		26,015		22.2	%		19,485		22.0	%		17,179		23.2	%
Consolidated	$	146,987		21.5	%	$	134,817		21.7	%	$	126,121		21.8	%

Operating Income
Hooker Branded	$	25,269		14.1	%	$	22,139		13.3	%	$	20,472		12.9	%
Home Meridian		18,828		4.9	%		17,828		4.9	%		14,687		4.3	%
All other		8,578		7.3	%		5,487		6.2	%		4,642		6.3	%
Consolidated	$	52,675		7.7	%	$	45,454		7.3	%	$	39,801		6.9	%

Capital Expenditures
Hooker Branded	$	843				$	1,372				$	1,193
Home Meridian		534					1,098					280
All other		3,837					696					981
Consolidated	$	5,214				$	3,166				$	2,454

Depreciation & Amortization
Hooker Branded	$	1,979				$	1,956				$	2,214
Home Meridian		2,407					2,716					4,704
All other		3,056					1,975					1,082
Consolidated	$	7,442				$	6,647				$	8,000

	As of February 3,					As of January 28,
	2019		%Total			2018		%Total
Assets			Assets					Assets
Hooker Branded	$	108,445		36.9	%	$	130,184		47.9	%
Home Meridian		144,277		49.1	%		107,283		39.4	%
All other		41,181		14.0	%		34,394		12.7	%
Consolidated Assets	$	293,903		100.0	%	$	271,861		100.0	%
Consolidated Goodwill and Intangibles		75,813					78,197
Total Consolidated Assets	$	369,716					350,058

Sales by product type are as follows:

	Net Sales (in thousands)
	Fiscal
	2019				2018				2017

Casegoods	$	417,677	61	%	$	404,808	65	%	$	391,347	68	%
Upholstery		265,824	39	%		215,824	35	%		185,872	32	%
	$	683,501			$	620,632			$	577,219

No significant long-lived assets were held outside the United States at either February 3, 2019 or January 28, 2018. International customers accounted for 1.2% of consolidated invoiced sales in fiscal 2019, 2.5% fiscal 2018 and 2% of consolidated invoiced sales in fiscal 2017. We define international sales as sales outside of the United States and Canada.