Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Segment Information

v3.19.3
Note 13 - Segment Information
 3 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(
13
)
Segment Information
 
Our operating segments are aligned with how the Company, including its chief operating decision maker, manages the business. As such, our reportable operating segments are the Wholesale segment and the Retail segment. 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
September 30, 2019,
the Company operated
145
design centers (our retail segment) and our independent retailers operated
156
design centers. Our wholesale segment net sales include sales to our retail segment, which are eliminated in consolidation, and sales to our independent retailers. Our retail segment net sales accounted for
79%
of our consolidated net sales in the
three
months ended
September 30, 2019.
Our wholesale segment net sales accounted for the remaining
21%.
 
Segment information for the
three
months ended
September 30, 2019
and
2018
is provided below (in thousands):
 
   
Three months ended
  
   
September 30,
  
   
2019
    
2018
  
Net sales
                
Wholesale segment
   $
101,329
     $
118,072
  
Retail segment
    
137,266
      
145,214
  
Elimination of intercompany sales
    
(64,674
 )    
(75,501
 )
Consolidated Total
   $
173,921
     $
187,785
  
                 
Income before income taxes
                
Wholesale segment
   $
16,928
     $
14,315
  
Retail segment
    
1,564
      
(1,559
 )
Elimination of intercompany profit (a)
    
149
      
(957
 )
Operating income
    
18,641
      
11,799
  
Interest income, net of interest (expense)
    
19
      
(27
 )
Consolidated Total
   $
18,660
     $
11,772
  
                 
Depreciation and amortization
                
Wholesale segment
   $
1,890
     $
1,961
  
Retail segment
    
2,086
      
3,039
  
Consolidated Total
   $
3,976
     $
5,000
  
                 
Capital expenditures
                
Wholesale segment
   $
1,163
     $
850
  
Retail segment
    
2,251
      
1,927
  
Consolidated Total
   $
3,414
     $
2,777
  
 
 
(a)
Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.
 
   
September 30,
    
June 30,
  
   
2019
    
2019
  
Total Assets:
  
 
 
 
  
 
 
 
Wholesale segment
   $
249,539
     $
237,354
  
Retail segment
    
430,563
      
299,125
  
Inventory profit elimination (b)
    
(26,203
 )    
(26,128
 )
Consolidated Total
   $
653,899
     $
510,351
  
 
 
(b)
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.