Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Segment Information

v3.10.0.1
Note 11 - Segment Information
 6 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(
11
)  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
December 31, 2018,
the Company operated
146
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, sales to our independent retailers and unaffiliated
third
parties. Our retail segment net sales accounted for
79%
of our consolidated net sales in the
six
months ended
December 31, 2018.
Our wholesale segment net sales accounted for
21%.
 
Segment information for the
three
and
six
months ended
December 31, 2018
and
2017
is provided below (in thousands):
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2018
    
2017
    
2018
    
2017
  
Net sales:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
107,658
     $
117,965
     $
225,730
     $
229,552
  
Retail segment
    
158,508
      
152,991
      
303,722
      
294,566
  
Elimination of inter-company sales
    
(69,014
 )    
(72,475
 )    
(144,515
 )    
(144,335
 )
Consolidated Total
   $
197,152
     $
198,481
     $
384,937
     $
379,783
  
                                 
Operating income:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
8,821
     $
15,568
     $
23,136
     $
29,030
  
Retail segment
    
3,311
      
(635
 )    
1,752
      
(3,408
 )
Adjustment of inter-company profit (1)
    
3,996
      
2,605
      
3,039
      
3,465
  
Consolidated Total
   $
16,128
     $
17,538
     $
27,927
     $
29,087
  
                                 
Depreciation & Amortization:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
1,896
     $
1,838
     $
3,857
     $
3,825
  
Retail segment
    
3,029
      
3,116
      
6,068
      
6,215
  
Consolidated Total
   $
4,925
     $
4,954
     $
9,925
     $
10,040
  
                                 
Capital expenditures:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Wholesale segment
   $
831
     $
764
     $
1,681
     $
1,515
  
Retail segment
    
1,346
      
1,564
      
3,273
      
3,466
  
Consolidated Total
   $
2,177
     $
2,328
     $
4,954
     $
4,981
  
 
 
   
December 31,
    
June 30,
  
   
2018
    
2018
  
Total Assets:
  
 
 
 
  
 
 
 
Wholesale segment
   $
253,918
     $
241,616
  
Retail segment
    
305,299
      
317,590
  
Inventory profit elimination (2)
    
(24,726
 )    
(28,773
 )
Consolidated Total
   $
534,491
     $
530,433
  
 
 
(
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.