Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Information

v3.8.0.1
Note 12 - Segment Information
 9 Months Ended
Mar. 31, 2018
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
March 31, 2018,
the Company operated
147
design centers (our retail segment) and our independent retailers operated
160
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
77%
of our consolidated net sales in the
nine
months ended
March 31, 2018.
Our wholesale segment net sales accounted for
23%.
Information for the
three
and
nine
months ended
March 31, 2018
and
2017
sales by product line for our wholesale segment is provided below:
 
   
Three months ended
    
Nine months ended
  
   
March 31,
    
March 31,
  
   
2018
    
2017
    
2018
    
2017
  
Case Goods
    
34
 %    
32
 %    
32
 %    
32
 %
Upholstered Products
    
49
 %    
53
 %    
51
 %    
52
 %
Home Accents and Other
    
17
 %    
15
 %    
17
 %    
16
 %
     
100
 %    
100
 %    
100
 %    
100
 %
 
The proportion of retail segment sales by these product lines for the
three
and
nine
months ended
March 31, 2018
and
2017
is provided as follows:
 
   
Three months ended
    
Nine months ended
  
   
March 31,
    
March 31,
  
   
2018
    
2017
    
2018
    
2017
  
Case Goods
    
31
 %    
30
 %    
31
 %    
30
 %
Upholstered Products
    
47
 %    
48
 %    
47
 %    
48
 %
Home Accents and Other
    
22
 %    
22
 %    
22
 %    
22
 %
     
100
 %    
100
 %    
100
 %    
100
 %
 
Segment information for the
three
and
nine
months ended
March 31, 2018
and
2017
is provided below (in thousands):
 
   
Three months ended
    
Nine months ended
  
   
March 31,
    
March 31,
  
   
2018
    
2017
    
2018
    
2017
  
Net sales:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
118,921
     $
110,819
     $
348,473
     $
339,076
  
Retail segment
    
136,903
      
141,948
      
431,469
      
450,495
  
Elimination of inter-company sales
    
(74,405
 )    
(72,266
 )    
(218,740
 )    
(221,111
 )
Consolidated Total
   $
181,419
     $
180,501
     $
561,202
     $
568,460
  
                                 
Operating income:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
7,927
     $
9,729
     $
36,957
     $
40,399
  
Retail segment
    
(2,896
 )    
(7,319
 )    
(6,304
 )    
(4,149
 )
Adjustment of inter-company profit (1)
    
(1,158
 )    
1,510
      
2,307
      
3,101
  
Consolidated Total
   $
3,873
     $
3,920
     $
32,960
     $
39,351
  
                                 
Depreciation & Amortization:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
2,002
     $
1,832
     $
5,827
     $
5,611
  
Retail segment
    
2,913
      
3,192
      
9,128
      
9,412
  
Consolidated Total
   $
4,915
     $
5,024
     $
14,955
     $
15,023
  
                                 
Capital expenditures:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
1,561
     $
2,193
     $
3,076
     $
7,776
  
Retail segment
    
2,579
      
1,665
      
6,045
      
7,336
  
Acquisitions
    
-
      
-
      
-
      
-
  
Consolidated Total
   $
4,140
     $
3,858
     $
9,121
     $
15,112
  
 
 
 
   
March 31,
    
June 30,
  
   
2018
    
2017
  
Total Assets:
  
 
 
 
  
 
 
 
Wholesale segment
   $
276,884
     $
279,364
  
Retail segment
    
316,175
      
319,341
  
Inventory profit elimination (2)
    
(28,502
 )    
(30,483
 )
Consolidated Total
   $
564,557
     $
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.