Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Segment Information

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Note 13 - Segment Information
6 Months Ended
Dec. 31, 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
December 31, 2019,
the Company operated
144
design centers (our retail segment) and our independent retailers operated
158
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
six
months ended
December 31, 2019.
Our wholesale segment net sales accounted for the remaining
21%.
 
Segment information for the
three
and
six
months ended
December 31, 2019
and
2018
is provided below (in thousands):
 
   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2019
   
2018
   
2019
   
2018
 
Net sales
                               
Wholesale segment
  $
91,889
    $
107,658
    $
193,218
    $
225,730
 
Retail segment
   
139,101
     
158,508
     
276,367
     
303,722
 
Elimination of intercompany sales
   
(56,416
)    
(69,014
)    
(121,090
)    
(144,515
)
Consolidated Total
  $
174,574
    $
197,152
    $
348,495
    $
384,937
 
                                 
Income (loss) before income taxes
                               
Wholesale segment
  $
5,730
    $
8,821
    $
22,658
    $
23,136
 
Retail segment
   
(135
)    
3,311
     
1,429
     
1,752
 
Elimination of intercompany profit (a)
   
3,609
     
3,996
     
3,758
     
3,039
 
Operating income
   
9,204
     
16,128
     
27,845
     
27,927
 
Interest income, net of interest (expense)
   
63
     
152
     
82
     
125
 
Consolidated Total
  $
9,267
    $
16,280
    $
27,927
    $
28,052
 
                                 
Depreciation and amortization
                               
Wholesale segment
  $
1,750
    $
1,896
    $
3,640
    $
3,857
 
Retail segment
   
2,704
     
3,029
     
4,790
     
6,068
 
Consolidated Total
  $
4,454
    $
4,925
    $
8,430
    $
9,925
 
                                 
Capital expenditures
                               
Wholesale segment
  $
1,148
    $
831
    $
2,311
    $
1,681
 
Retail segment
   
3,425
     
1,346
     
5,676
     
3,273
 
Consolidated Total
  $
4,573
    $
2,177
    $
7,987
    $
4,954
 
 
 
(a)
Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.
 
   
December 31,
   
June 30,
 
 
 
2019
   
2019
 
Total Assets:
               
Wholesale segment
  $
233,374
    $
237,354
 
Retail segment
   
411,359
     
299,125
 
Inventory profit elimination (b)
   
(22,806
)    
(26,128
)
Consolidated Total
  $
621,927
    $
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.