Greetings, ladies and gentlemen, and welcome to the Hooker Furniture Quarterly Investor Conference Call reporting its Operating Results for the Fourth Quarter 2020 Earnings. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Paul Huckfeldt, Vice President, Finance and Chief Financial Officer for Hooker Furniture Corporation.

Thank you, Joel. Good morning, and welcome to our quarterly conference call to review our financial results for the fiscal 2020 fourth quarter and full year, which ended on February 2, 2020. We certainly appreciate your participation this morning. Paul Toms, our Chairman and CEO; Jeremy Hoff, President of our Hooker Legacy brands; and Lee Boone, Co-President of our HMI division are joining me today for prepared remarks. For the question-and-answer portion of the call, our other executive officers will be available to take questions as well, including Anne Jacobsen Smith, Chief Administration Officer; and Doug Townsend, Co-President of HMI. During our call, we may make forward-looking statements, which are subject to risks and uncertainties. A discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2020 year-end results. Any forward-looking statement speaks only as of today and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call. Before I get into the results, a word about our operating segments. In the fourth quarter of 2020, we updated our operating segments. Our domestic upholstery business units Bradington-Young, Sam Moore and Shenandoah were moved out of All Other and aggregated into a new segment called Domestic Upholstery. All Other now consists of H Contract and Lifestyle Brands. Our two largest segments, Hooker Branded and Home Meridian were unchanged. We believe doing this better aligns our segment reporting with the accounting guidance. This morning, we reported consolidated net sales of $610 million and net income of $17 million or $1.44 per diluted share for our 2020 fiscal year ended February 2, 2020. Earnings per diluted share for fiscal 2020 decreased 57% from $3.38 in the prior year. For the year, net sales decreased 10.6% or 73 million compared to last year and net income decreased 57% or $22.8 million. For the fiscal fourth quarter, beginning November 4 and ending on February 2, consolidated net sales were 165 million with net income of 7 million or $0.59 per diluted share. Net sales decreased 35.6 million or 17.8% compared to last year's fourth quarter due to net sales decreases across all three reportable segments; Hooker Branded, Home Meridian and domestic upholstery and were essentially flat in All Other. Net income for the quarter decreased 52% or $7.7 million. Contributing to the consolidated revenue decrease for both the quarter and the year was one week less of sales compared to the previous fiscal year. Fiscal 2019 had 53 weeks while fiscal 2020 had 52 weeks. The additional week in the prior year contributed approximately 13 million to consolidated net sales based on the average net sales per day of shipping day. Paul Toms will now comment on our fiscal 2020 and fourth quarter results.

Thank you, Paul, and good morning, everyone. I’ll apologize ahead of time. There’s a fellow right outside my window mowing the grass, so you’ll hear some background noise. That’s what it is. The world has changed a great deal since our fourth quarter and fiscal year ended on February 2. A little over a month later, on March 11, the COVID-19 virus was classified as a global pandemic by the World Health Organization. Shortly, thereafter, federal, state and local governments in the U.S. and elsewhere began imposing restrictions on travel and business operations and advising or requiring individuals to limit or eliminate time outside their homes. Temporary closures of businesses have also been ordered in many states and other businesses that temporary closed on a voluntary basis. Consequently, the COVID-19 outbreak has severely restricted the level of economic activity in the U.S. and around the world. Before we review our fourth quarter and fiscal year results in more detail, I’d like to address the company’s response to the COVID-19 health and economic crisis. We’re carefully monitoring the evolving updates and advisories from the CDC and believe we are adhering to their best practice recommendations regarding the health and safety of our employees. To limit the possibility of spreading the infection, most of our administrative staff are telecommuting. For those administrative staff not telecommuting and for our warehouse and domestic manufacturing employees, we have implemented appropriate physical distancing policies and have stepped-up facility cleaning at each location. Non-essential domestic travel for our employees is ceased and international travel has been completely prohibited. Testing and treatment for the COVID-19 is covered 100% under our employee medical insurance, and counseling is available through our Employee Assistance Plan to support those with financial, mental and emotional stress related to the virus and other issues.…

Thanks, Paul. In the Hooker Branded and Domestic Upholstery segments, we were pleased to maintain profitability at close to the same solid levels as the prior year and slightly increased profitability in All Other, despite the tariff headwinds and lower demand. Turning to a more detailed look at each of our segments, I'll begin with the Hooker Branded segment. Net sales for the Hooker Branded segment decreased 16.7 million or 9.4% in fiscal 2020 with Hooker Casegoods reporting an 11% sales decrease, partially offset by a modest sales increase at Hooker Upholstery. Despite the impact of the tariffs and soft retail demand throughout the year, we were pleased that the segment reported operating income of 21.5 million or 13.3% as a percentage of sales. Hooker Upholstery's positive sales despite the industry-wide downturn were driven by a broader line of well-received product offerings and a favorable product mix including higher-priced sofas and sectionals, leading to a 9% increase in incoming orders as compared to the prior year and a 37% increase in backlogs at year-end. While sales were down at Hooker Casegoods, products and collections introduced in the last several market cycles such as Ciao Bella, LaGrange and Sanctuary II have quickly made their way into our top 10 selling collections. In the Domestic Upholstery segment, net sales decreased 10.9 million or 10.2% due to reduced unit volume as a result of soft retail conditions. Bradington-Young and Sam Moore experienced reduced incoming orders throughout fiscal 2020, while Shenandoah’s incoming orders picked up in the fourth quarter versus the first three quarters of fiscal 2020. Despite decreased net sales, Domestic Upholstery's operating margin was essentially unchanged as compared to fiscal 2019. All Other net sales increased 2.1 million or 20.7%, primarily due to strong net sales at our H Contract division. H Contract, which serves senior living facilities and retirement centers, continued a growth trajectory with a 15% increase in incoming orders in fiscal 2020 and finished the year with backlogs 28% over the previous period. The nearly 20% sales growth at H Contract, along with 40% growth in our other non-residential business unit HMI's Samuel Lawrence Hospitality affirms our strategy to diversify our business beyond residential furnishings to include contract furnishings as well. Now, I'd like to call on Lee Boone to give more detail on the HMI segment this quarter.

Thanks, Jeremy. Beginning our summary with the fourth quarter results, Home Meridian was pleased to report 1.8 million in operating income despite a 21.1 million or 17.5% sales decrease, and we finished fiscal year 2020 with a backlog 8.3% over the previous year. While our fourth quarter results are still well below our past performance, they are a significant improvement over the first three quarters indicating that most of last year's problems are behind us and our turnaround strategies are delivering positive results. For fiscal year '20, net sales in the Home Meridian segment decreased 47.2 million or 12.2%. The sales decline was mostly attributable to one large customer. However, we also experienced modest sales declines with many of our largest traditional furniture retailers. The large sales decline, excess tariff costs and higher resourcing transition costs as well as higher inventory storage and handling costs and the quality issue discussed earlier led to a 7.2 million operating loss for the year. HMI also experienced a significant negative impact on profitability from tariffs due to the nature of the company's distribution base. Because many of our products are shipped directly from Asian manufacturing partners rather than stocked in U.S. warehouses, HMI was unable to build inventory before the 25% tariff was enacted. In addition, we were unable to recover all the excess tariff costs through price increases due to the more price-sensitive nature of many of our large customers. For the year, Samuel Lawrence Furniture, SLF, and Pulaski Furniture Company, PFC, turned in the strongest performances of the HMI divisions. Although both business units experienced low-double digits sales decreases versus the prior year, both the units delivered contribution margins close to budget and posted over $3 million in operating profit each. This performance is the result of less impact from the…

Thanks, Lee. Consolidated average selling prices increased 1.3% due to increased ASPs in the Hooker Branded segment, Domestic Upholstery and All Other which is attributable mostly to price increases necessitated by the imposition of and subsequent increase in tariffs, as well as favorable product mix. All of these offset a small decrease in ASP at Home Meridian. These factors were not sufficient to offset the overall 12.7% unit volume decrease which resulted in lower order volumes across all three reportable segments. Unit volume declines were relatively consistent across all of our reportable segments. Consolidated gross profit decreased $33 million to 114 million in fiscal 2020 and from 21.5% to 18.7% as a percentage of net sales. Hooker Branded gross profit decreased modestly in absolute terms and as a percentage of net sales due to lower sales, the impact of tariffs and modestly higher freight costs, partially offset by price increases in this segment to mitigate the tariff impact. In the Home Meridian segment, gross profit declined significantly in absolute terms and as a percentage of net sales. Home Meridian's gross profit was negatively impacted by lower sales, higher chargebacks as well as unrecovered tariff and freight costs and some lower margin sales programs that we've been working to improve or discontinue. Unrecovered tariff costs and the write-down of inventory with quality issues had an approximately $12 million adverse impact on gross profit. Other factors affecting gross profit included higher freight, handling and warehousing costs of about 1.6 million due to higher than planned inventories. Despite a $10.9 million or about 10% sales decline in our Domestic Upholstery segment, gross margin increased as a percentage of net sales due primarily to lower material costs and lower benefits expenses. These decreases were partially offset by higher direct labor and overhead as a…

Thanks, Paul. The COVID-19 virus pandemic presents an economic challenge of unprecedented proportions with an uncertain timeframe. In the last several weeks, we’ve seen an erratic stock market, spike in unemployment claims, supply chain disruptions and the cancellation of business, social, sporting, academic and religious gatherings, including the High Point premarket and the postponement of the spring High Point furniture market. Some of our customers have temporarily closed due to stay-at-home orders across the country. We're seeing an industry-wide decrease in demand and expect our sales, earnings and liquidity to be down material in the fiscal 2021 first quarter compared to the prior year period, but we’re unable to estimate the extent of those decreases. We also have limited visibility on the extent to which our businesses may be impacted by the outbreak, but we are preparing for a significant downturn lasting anywhere from four to eight months with strategies in place to preserve cash and reduce operating expenses. The situation is very fluid and further delays in the receipt of goods, other unanticipated impacts on our supply chain, including our direct imports or components purchased domestically or on our retail customers could have a more significant impact on our future business. We're thankful to be in a strong financial position having built significant cash last year and enhancing our cash position further so far this year. Our lower fixed cost, broad distribution business model gives us more flexibility to scale our business up or down. We’re also fortunate to have a strong presence in e-commerce since that channel is holding up during the crisis so far. In our 95 years of business, our company has been through recessions, a depression, a World War, terrorist attacks, natural disasters and every other type of crises imaginable. We've endured each time by coming together working as a team, making prudent business decisions and not letting fear cripple us. I'm proud that our team is coming together to meet these challenges just as we came together to meet multifaceted challenges last year. This ends the formal part of our discussion. At this time, I'll turn the call back over to Joel for questions. Thank you.

Thank you. [Operator Instructions]. Our first question comes from Anthony Lebiedzinski with Sidoti & Company. Your line is now open.

Thank you. Good morning, everyone. Thank you for taking the question. So I guess first just to take a step back, I appreciate all the color about the different segments. So looking at the Home Meridian, obviously has a number of challenges. Can you just kind of remind us as to the extent of all the costs that you had, all the sales chargebacks and the demurrage costs and everything, can you just refresh our memory as to what the extent of that was just to give us a sense as to what those costs that you don’t think will repeat in your fiscal '21?

Paul Huckfeldt, do you want to take a stab at that?

Sure. In the aggregate, I think we’re looking at about $10 million of costs that were unique to the year. About half of that, maybe a little more was related to a large chargeback and also with the related inventory write-downs on the return related to that chargeback. We had a couple – I think I mentioned in the call, we had about 1.6 million of additional warehousing-related costs having entered the year with more inventory because of the slowdown in the early part of the year and the fact that many of our customers loaded up on inventory at the end of fiscal '19, we came into the year with more inventory than anticipated and that was approaching a couple million dollars more. And then we also had another couple million in excess freight and storage charges on our product coming in. So I would say there’s about – overall and combined, it’s about $10 million of unique expenses that we don’t expect to recur in the current year.

Got it, okay. So that’s a meaningful number, okay. And then as far as the HMI, you guys talked about some of the reorganization that you did and that your expectation is that that should do better after the COVID pandemic passes us. So just wanted to get a little bit more details as far as HMI as far as the whole reorganization effort if you could just give us a little bit more color on that, that would be great?

Lee?

Sure, Anthony. So we have new leadership in place now at PRI. There’s a new President and a new Vice President of Sales and Merchandizing. They were added earlier this year. Both have extensive experience and expertise in the field and we think are very well suited to grow the PRI business and make it significantly more profitable. In addition, we hired three executives to stand up the HMidea division which are focused on the mass channel and the clubs channel and the RTA product segment that will be largely incremental business for HMI and RTA and then continuing business and growth and profitability in the club segment. So that’s five new executives that we added in the last six to nine months. Going forward, we feel good about that.

Okay, great. And then as far as your reliance on China, so you cut that in half. So it’s about 20% I believe so. So what is your – obviously with COVID I guess it might be uncertain, but is it safe to assume that you’ll continue to reduce your reliance on China with additional product sourcing being shifted away from there?

Anthony, this is Paul Toms. And yes, our intention is to continue to reduce our reliance on China as a source country. I don’t think you’ll see the same magnitude of reduction this year as we had last year I would say. I think we have said somewhere in our – one of our filings recently that maybe we get it down to 16% or 17%. There are some things that they do in China, large cuttings of product for some of our larger customers are not feasible in other countries right now. We’ve got other businesses that we get paid for the tariffs and the cost of doing business in China. Our customers still want the product out of China and they’re willing to pay us for it. And then there are other businesses on the Hooker Branded side where we’re just not able to ramp up as quick in Vietnam as we’d like and rather than disrupt our supply chain, we’ll just move at a little bit slower pace. But I think probably to go from 20%, 22% of our total sales sourced out of China maybe to 16% or 17% this year would be pretty good an estimate.

Got it, okay. Thanks for that explanation. So you also talked about e-commerce. Obviously that’s a standout now. So can you give us a sense as to what your penetration is in terms of overall sales for the company or percentage of sales that go to e-commerce retailers?

It’s Paul Toms again. I’m going to guess that’s somewhere between 12%, 13% of our total volume, maybe a little bit more and it varies between divisions. Domestic Upholstery almost 9%; Home Meridian is probably a bigger share of their business than it is of Hooker Branded, but it’s I think north of 10% of both Hooker Branded and Home Meridian.

Got it, okay. So obviously you guys entered with backlog up 9%, but you talked about the order of cancellations and the deferrals from customers. So given the timing where you are now, you only have about two weeks left of the first fiscal quarter. I know, Paul, you did mention you expect a significant negative impact on the quarter. Is there any more color that you can provide us on how we should think about the extent of sales and earnings for the first quarter given that you already are – like I said, you only have two weeks or so left in the quarter?

Right. So the coronavirus actually impacted us in different ways within the same first quarter. To start our fiscal year which is typically right around 1st of February, this year was February 3, if you think about that, that was when the virus was at its peak and was disrupting the return to work of employees in China and a lot of Chinese employees that are in management and supervision of factories in Vietnam. So early in the quarter, the disruption from the virus was actually on our supply side and factories didn’t ramp up as quickly as normal and there were delayed shipments. Six weeks later, it starts to impact here and as they put all the [covers] [ph] in place here to have businesses closed, people shelter at home, things like that, it significantly reduced demand. And our large customers that have hundred of stores that were closed immediately cancelling orders, postponing orders, asking that you don’t ship anything like overnight came to a halt. And that’s probably going to impact the last six weeks of the 12-week quarter, 13-week quarter. So we’re probably – our planning is – you didn’t ask about second quarter, but we expect May to be very similar to April and business to get somewhat better in June, July, August and then hopefully better again by September. But it’s hard to say what the impact is in the first quarter. February, in spite of not being able to get production out of China and Vietnam, might have impacted a few direct customers where we ship containers direct from Asia to their stores. January and February was pretty normal similar to the February in the prior year. March, the first two weeks were reasonably normal and we started to get production back up in Asia. But of course, half of March was normal. I would say mid-March is when everything just kind of came to a stop. It was maybe some business that was in the pipeline that we realized – by early April, late March we realized we didn’t have sufficient orders to run our Domestic Upholstery plants full schedule. So we furloughed two or probably be three weeks all of our Domestic Upholstery plants. We furloughed about half of our warehouse employees because of the same reduced demand. So it’s really hard at this point to say how the quarter is going to checkout, but it will definitely be behind prior year because of the disruption.

Right, okay. Thanks for that color. So obviously as you noted, you are reducing salaries and some other expenses. You’re reducing your CapEx just like other companies as well. So as far as – first I guess on the expense side of the business, in total how much would you say either on a quarterly basis or an annual basis, however you want to do it, the extent of some of these – all of these operating expense cutbacks, just wanted to see if you guys could quantify that? And then I guess CapEx I think you said about 2 million or so I think is the CapEx for this fiscal year, but just wanted to clarify that?

Okay. So operating budgets and expenses that we have control over, fixed expenses that we have control over, we set a target of 15% to 20% reduction in those and about 10% in salaries and wages. And I think we’re very closed to that, so maybe all-in you’re looking at 12% to 13% decline in spending every month. In the first month, we’ll have some offsets to that in severance for employees that were dislocated, would be the larger one. Some of the savings will take a few months to work with landlords on any concessions on rent and some of our other vendors. But I think on the spending side, you can expect 10% to 12% less. And then some of our other costs will fluctuate with sales, commissions, royalties, things like that, which will be down proportionately to sales. We have relatively small CapEx for a company our size, because we don’t have a lot of retail stores or other large manufacturing operations of the upholstery plants or nowhere near as capital intensive as casegoods facilities used to be. So CapEx, we have I think budget this year of around $5 million and we’ve identified at least half of that, maybe 3 million that we would postpone into future years without any significant impact to the business.

Got it, okay. And then last couple of questions for me. I guess how should we think about priority of your cash flow usage now? Plus also I know your debt matures early next year as far as your expectation to renew that facility. Just wanted to get your revolving credit facility as far as what is your expectation to be able to renew that, that would be great? Thank you.

Paul’s been working on a lot of models the last few weeks, so I’ll let him take that question.

Okay.

Okay. Regarding the credit facility, we fully intend and expect to renew it. We’ve had discussions with our bank. Obviously there are no firm commitments, but we’re working closely with our bank to make sure that they understand our situation like many of their other clients. We fully intend to renew that. I think right now the cost of – we can start renewing it now, but the costs are pretty high. So we’ll just continue to monitor that. We’ve done a lot of cash flow forecasting and believe that we have sufficient liquidity to get through this crisis. Of course it’s early in the crisis and there are a lot of developments yet to be seen. So I think over the next couple of months, we’ll have a clearer picture of our total cash needs and where we need to go with that. But I think we are comfortable now. I think we’ve mentioned a couple of times we entered this year with a solid cash balance and we’ve built the cash balance since then. So we have the advantage of having the time to evaluate the situation before making any more deeper or more drastic adjustments. I know that was kind of a big answer, but at this point there’s a lot of uncertainty.

Right. But I guess the other – what I was trying to also ask as far as dividend versus debt reduction, I know you guys paid the dividend during the last recession unlike a lot of other companies which did not pay the dividends. So just wanted to get a better sense of how you’re thinking about dividend payments versus debt reduction?

Debt reduction, we plan to make our regularly scheduled debt payments. And what I was getting at when I said the luxury of not having to pull levers too soon is that we obviously need to evaluate the dividend based on how things develop. We’ll have to have conversations about our next dividend in early June and I think we’ll have more clarity. Obviously, it’s got to be on the table but it’s not something that we relish doing. So I think that we have the luxury of a couple more months of visibility before we have to make a decision about the dividend. It’s not our intention to cut it, but survival and liquidity is the most important consideration.

Got it, okay. That’s all I have.

I think 50 years we’ve had a consistent history of paying dividends even through the last financial crisis 2008, '09 and '10. So we definitely put a priority to maintain the dividend, but everything remains to be seen in terms of demand from our customers to buy our products and how our customers pay us for the products we have already shipped them. And I think in six weeks we’ll have more visibility than we have today, so we’ve postponed the decision on the late June dividend until early June.

Got it, okay. That’s all I have. Thank you very much.

All right.

Thank you. Our next question comes from JP Geygan with Global Value Investment Corp. Your line is now open.

Good morning. Thank you for taking my questions. You spoke on it a little bit but I’m hoping you might elaborate on your cost structure, specifically the variable component versus the fixed component and specifically how you can scale the business?

Paul, you want to take a stab at that or I will?

Yes. About 5% of net sales is – or maybe just a little bit under that or in that ballpark, 5% of net sales are variable SG&A costs; that’s commissions, designed royalties and expenses and some more flexible marketing costs. Beyond that, most of our operating costs are fixed or semi-fixed, which is – that’s the area that we’ve focused on trying to make cost reduction decisions, whether it’s layoffs or looking for vendor concessions or just reducing spending in cases like some marketing spend. So the scaling of the business, some of it naturally scales with the variable cost. The rest of it are the hard decisions that we’ve had to make, whether it’s like I said layoffs or furloughs or going to our vendors and partners for additional contributions.

This is Paul Toms. I think what’s helped us in past downturns is that our cost of goods sold doesn’t vary hardly at all in really high sales or low sales periods. Our cost from our vendors, which is about 85% of what we sell, is sourced outside of our own plants. And those costs just don’t change as opposed to when we had manufacturing facilities and if you’re underutilizing and the cost of products produced went through the roof. Our upholstery plants, 15% of our total business is upholstery produced domestically in our plants and the cost will go up on those products. But labor is the key component there and we don’t have as many fixed costs from machinery and equipment in those plants as we had in the casegoods facility. We’re also thankful at this time that we don’t have retail stores – a reason for not having retail stores was it limited our ability to sell into a multitude of other distribution channels. But I think right now we’re grateful we don’t have cost of leases and other costs related to retail stores.

Then in your 8-K when you referenced your low fixed cost broad distribution business model, it gives you the flexibility to scale the business up or down. You’re referencing your distribution model in the lack of a retail footprint and/or your fixed cost structure relative to revenue not necessarily fixed cost as a portion of your cost of goods sold.

Cost of goods sold pretty much stays the same.

Right. Most of the cost of goods sold is variable. That’s right, Paul.

Great. Thank you for the clarification. My second question is given the unique and fluid market situation right now, could you talk about where you see opportunity?

That’s a good question. I think this has shown that e-commerce, which is a significant part of our business, I think we’re further along and developing e-commerce than most of our peers. It is certainly an area we want to continue to grow. But honestly, at this point we’re more focused on trying to navigate our way through a significant downturn in sales and all the impacts of trying to reduce the amount of product coming from overseas and just making sure employees are safe and trying to see what we can do to take care of them during this time. But we haven’t been as focused on opportunities. We’ve got things that are in works, have been in works for probably most of our business units; new products, new programs, new categories to be in, new licensing opportunities. There are all out there, even launching HMidea, new ready-to-assemble casegoods line that will be sold through mass channel that we haven’t been in, in a meaningful way before and the product category we haven’t been in at all. So those things are all in the hopper, but our focus really the last four weeks has been just what’s right in front of us and navigating our way through this.

Great. Thank you for your time. That does it for me.

All right. Thank you.

Thank you. Our next question comes from John Deysher with Pinnacle. Your line is now open.

Hi. Good morning. Thanks for taking my question. I was just curious back to the backlog question, I think you indicated it was up 9% at year end. What was the number at year end at the end of January and what would the number be at the end of March?

We can get you the number for the end of January. I’m not sure that the number at the end of March would be meaningful because there’s still orders in the backlog that we know are not shippable in normal timeframe. Customers may have left them, but said don’t ship these until I give you release and that could be two, three months down the road. So I don’t have the number – it’s not a number that we typically provide other than to say up or down by a certain percent. But I can tell you the backlog at the end of March is going to be less than it was at the beginning of the year. And I’m not sure that the backlog – we gave you the number, I’m not sure that that even is an accurate number of what we could actually ship today of that backlog.

Okay, that’s fair. But the year-end will be disclosed in the 10-K?

It will.

Okay, good. What were the quality issues that led to the decline with the large customer? And how have those been fixed at this point?

Doug or Lee, would you like to answer that?

Sure. I’ll do that. This is Doug Townsend. The quality issue was the manufacturing defect that was in a very small percentage of a very large cutting. It was less than 0.5%. But because it was a defect, we had to return the whole thing. There was an inspection issue and we dealt with it in terms of the quality management team that’s over there and the management of the factory.

So because it was less than 0.5% of I guess the total order size, you had to take back the whole inventory?

Yes.

Interesting. And what country was that? Do you know?

Yes, it came out of Vietnam.

Vietnam, okay. But you’re confident that that’s been solved at this point?

Yes. We’ve put in new procedures, new management, new team.

Okay. All right, good. That’s encouraging. And the large customer that you referenced, are you still doing any business with them at a lower level or --? You are.

Yes. It’s at a lower level, but they’re still a significant customer.

Okay. All right, good. So that door still stays open there. All right, that’s good news. And I guess the question is we’re talking about the rolling returns in terms of the economy opening up depending on which areas are most impacted. In terms of your customer base, how would you say that those are positioned for that rolling, reopening of economy? I think we all know where the hotspots are, but how would you say your customer base is positioned as we go forward?

John, this is Paul Toms. I would say we’re positioned probably as well as anybody could be because of the broad distribution we have. We’re selling retailers and 25, 26 different channels of distribution from some that haven’t been as impacted or have actually been advantaged by this, like e-commerce, catalogues. We’re selling regional powerhouses, parities [ph] in the southeast, rooms to go in the southeast and across I guess parts of the – new part of the country. Macy’s as a customer that’s national. Of course, they’ve had their own challenges through this. We’re selling to other department stores. We’re selling to a lot of independent furniture retailers, some that are single store mom and pops and it remains to be seen how they fare through all of this. Others that are strong, in particular markets like Berkshire Hathaway Furniture divisions. So I think we are so broadly distributed that it will come back kind of as the country comes back. There’s not really a pocket of the country that we’re more concentrated in than elsewhere.

Okay. And remind us again what was the total e-commerce side of the business last year as a percentage of the total roughly?

Paul Huckfeldt, you can help me here but I’m thinking companywide about 12% to 13% of sales.

Yes, that sounds about right. Of course that’s pure play. There’s the omni-channel. So probably more of it is sold by the Internet, but that 12% is probably about right for pure play e-commerce.

Okay. All right, good. Thanks very much and good luck.

Thank you.

Thank you.

Thank you. I’m not showing any further questions at this time. I would now like to turn the call back over to Paul Toms for closing remarks.

All right. Thank you, Joel. I really have nothing additional to add. As we’ve said multiple times in this call, these are really unprecedented times. I have no doubt the company will get through them. We’ve got a strong management team. Everybody is focused on doing what we need to, to get through this crisis. And I look forward to reporting back to you in about two months how we’re doing and having much more visibility into the impacts of the coronavirus crisis. Thank you for joining us today. Goodbye.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.