Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Segment Information

v3.20.1
Note 14 - Segment Information
 9 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(
14
)
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
March 31, 2020,
the Company operated 
144
design centers (our retail segment) and our independent retailers operated
159
design centers. Our wholesale segment net sales include sales to our retail segment, which are eliminated in consolidation, and sales to our independent retailers and other
third
parties. Our retail segment net sales accounted for
79%
of our consolidated net sales in the
nine
months ended
March 31, 2020.
Our wholesale segment net sales accounted for the remaining
21%.
 
Segment information for the
three
and
nine
months ended
March 31, 2020
and
2019
is provided below (in thousands):
 
   
Three months ended
    
Nine months ended
  
   
March 31,
    
March 31,
  
   
2020
    
2019
    
2020
    
2019
  
Net sales
                                
Wholesale segment
   $
93,139
     $
108,367
     $
286,357
     $
334,097
  
Retail segment
    
115,698
      
138,947
      
392,065
      
442,669
  
Elimination of intercompany sales
    
(59,063
 )    
(69,485
 )    
(180,153
 )    
(214,000
 )
Consolidated Total
   $
149,774
     $
177,829
     $
498,269
     $
562,766
  
                                 
Income (loss) before income taxes
                                
Wholesale segment
   $
8,936
     $
13,045
     $
31,594
     $
36,181
  
Retail segment
    
(8,772
 )    
(1,669
 )    
(7,343
 )    
83
  
Elimination of intercompany profit (a)
    
(918
 )    
(707
 )    
2,840
      
2,332
  
Operating income (loss)
    
(754
 )    
10,669
      
27,091
      
38,596
  
Interest income, net of interest (expense)
    
213
      
(62
 )    
295
      
63
  
Consolidated Total
   $
(541
 )   $
10,607
     $
27,386
     $
38,659
  
                                 
Depreciation and amortization
                                
Wholesale segment
   $
1,748
     $
1,914
     $
5,388
     $
5,771
  
Retail segment
    
2,667
      
2,903
      
7,457
      
8,971
  
Consolidated Total
   $
4,415
     $
4,817
     $
12,845
     $
14,742
  
                                 
Capital expenditures
                                
Wholesale segment
   $
3,027
     $
726
     $
5,338
     $
2,407
  
Retail segment
    
1,512
      
1,310
      
7,119
      
4,583
  
Consolidated Total
   $
4,539
     $
2,036
     $
12,457
     $
6,990
  
 
 
(a)
Represents the change in wholesale profit contained in the retail segment inventory at the end of the period.
 
   
March 31,
    
June 30,
  
 
  
2020
    
2019
  
Total Assets
                
Wholesale segment
   $
316,974
     $
237,354
  
Retail segment
    
409,231
      
299,125
  
Inventory profit elimination (a)
    
(23,101
 )    
(26,128
 )
Consolidated Total
   $
703,104
     $
510,351
  
 
 
(a)
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.