Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Information

v3.8.0.1
Note 12 - Segment Information
 6 Months Ended
Dec. 31, 2017
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(
12
)     Segment Information
 
Our wholesale and retail operating segments represent strategic business areas of our vertically integrated enterprise that operate separately and provide their own distinctive services. This vertical structure enables us to offer our complete line of home furnishings and accents more effectively while controlling quality and cost. We evaluate performance of the respective segments based upon revenues and operating income. Inter-segment transactions result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.
 
As of
December 31, 2017,
the Company operated
1
48
design centers (our retail segment) and our independent retailers operated
157
design centers. Our wholesale segment net sales include sales to our retail segment, which are eliminated in consolidation, sales to our independent retailers and unaffiliated
third
parties. Our retail segment net sales accounted for
78%
of our consolidated net sales in the
six
months ended
December 31, 2017.
Our wholesale segment net sales accounted for
22%.
Information for the
three
and
six
months ended
December 31, 2017
and
2016
sales by product line for our wholesale segment is provided below:
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2017
    
2016
    
2017
    
2016
  
Case Goods
    
31
 %    
32
 %    
32
 %    
32
 %
Upholstered Products
    
52
 %    
50
 %    
51
 %    
51
 %
Home Accents and Other
    
17
 %    
18
 %    
17
 %    
17
 %
     
100
 %    
100
 %    
100
 %    
100
 %
 
The proportion of retail segment sales by these product lines for the
three
and
six
months ended
December 31, 2017
and
2016
is provided as follows:
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2017
    
2016
    
2017
    
2016
  
Case Goods
    
29
 %    
31
 %    
30
 %    
30
 %
Upholstered Products
    
49
 %    
48
 %    
48
 %    
49
 %
Home Accents and Other
    
22
 %    
21
 %    
22
 %    
21
 %
     
100
 %    
100
 %    
100
 %    
100
 %
 
Segment information for the
three
and
six
months ended
December 31, 2017
and
2016
is provided below (in thousands):
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2017
    
2016
    
2017
    
2016
  
Net sales:
                                
Wholesale segment
   $
117,965
     $
113,693
     $
229,552
     $
228,257
  
Retail segment
    
152,991
      
156,292
      
294,566
     $
308,547
  
Elimination of inter-company sales
    
(72,475
 )    
(75,313
 )    
(144,335
 )    
(148,845
 )
Consolidated Total
   $
198,481
     $
194,672
     $
379,783
     $
387,959
  
                                 
Operating income:
                                
Wholesale segment
   $
15,568
     $
14,179
     $
29,030
     $
30,670
  
Retail segment
    
(635
 )    
2,147
      
(3,408
 )    
3,170
  
Adjustment of inter-company profit (1)
    
2,605
      
768
      
3,465
      
1,591
  
Consolidated Total
   $
17,538
     $
17,094
     $
29,087
     $
35,431
  
                                 
Depreciation & Amortization:
                                
Wholesale segment
   $
1,838
     $
1,869
     $
3,825
     $
3,779
  
Retail segment
    
3,116
      
3,131
      
6,215
      
6,220
  
Consolidated Total
   $
4,954
     $
5,000
     $
10,040
     $
9,999
  
                                 
Capital expenditures:
                                
Wholesale segment
   $
764
     $
1,944
     $
1,515
     $
5,583
  
Retail segment
    
1,564
      
1,870
      
3,466
      
5,671
  
Acquisitions
    
-
      
-
      
-
      
-
  
Consolidated Total
   $
2,328
     $
3,814
     $
4,981
     $
11,254
  
 
 
   
December 31,
    
June 30,
  
   
2017
    
2017
  
Total Assets:
                
Wholesale segment
   $
275,596
     $
279,364
  
Retail segment
    
305,989
      
319,341
  
Inventory profit elimination (2)
    
(26,573
 )    
(30,483
 )
Consolidated Total
   $
555,012
     $
568,222
  
 
(
1
)
Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.
(
2
)
Represents the wholesale profit contained in the retail segment inventory that has
not
yet been realized. These profits are realized when the related inventory is sold.