Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Information

v3.19.1
Note 12 - Segment Information
 9 Months Ended
Mar. 31, 2019
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 net sales 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, 2019,
the Company operated
142
design centers (our retail segment) and our independent retailers operated
161
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
79%
of our consolidated net sales in the
nine
months ended
March 31, 2019.
Our wholesale segment net sales accounted for
21%.
 
Segment information for the
three
and
nine
months ended
March 31, 2019
and
2018
is provided below (in thousands):
 
   
Three months ended
    
Nine months ended
  
   
March 31,
    
March 31,
  
   
2019
    
2018
    
2019
    
2018
  
Net Sales:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
108,367
     $
118,921
     $
334,097
     $
348,473
  
Retail segment
    
138,947
      
136,903
      
442,669
      
431,469
  
Elimination of intercompany sales
    
(69,485
 )    
(74,405
 )    
(214,000
 )    
(218,740
 )
Consolidated Total
   $
177,829
     $
181,419
     $
562,766
     $
561,202
  
                                 
Operating income:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
13,045
     $
7,927
     $
36,181
     $
36,957
  
Retail segment
    
(1,669
 )    
(2,896
 )    
83
      
(6,304
 )
Elimination of intercompany profit (a)
    
(707
 )    
(1,158
 )    
2,332
      
2,307
  
Consolidated Total
   $
10,669
     $
3,873
     $
38,596
     $
32,960
  
                                 
Depreciation and Amortization:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
1,914
     $
2,002
     $
5,771
     $
5,827
  
Retail segment
    
3,010
      
2,913
      
9,078
      
9,128
  
Consolidated Total
   $
4,924
     $
4,915
     $
14,849
     $
14,955
  
                                 
Capital expenditures:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
726
     $
1,561
     $
2,407
     $
3,076
  
Retail segment
    
1,310
      
2,579
      
4,583
      
6,045
  
Consolidated Total
   $
2,036
     $
4,140
     $
6,990
     $
9,121
  
 
   
March 31,
    
June 30,
  
   
2019
    
2018
  
Total Assets:
  
 
 
 
  
 
 
 
Wholesale segment
   $
247,343
     $
241,616
  
Retail segment
    
311,132
      
317,590
  
Inventory profit elimination (b)
    
(25,643
 )    
(28,773
 )
Consolidated Total
   $
532,832
     $
530,433
  
 
 
(a)
Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.
 
 
(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.