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, 2015
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
(13)
Segment Information
 
Our operations are classified into two operating segments: wholesale and retail. These operating segments represent strategic business areas of our vertically integrated business which, although they operate separately and provide their own distinctive services, enable us to more efficiently control the quality and cost of our complete line of home furnishings and accents.
 
The wholesale segment is principally involved in the development of the Ethan Allen brand, which encompasses the design, manufacture, domestic and offshore sourcing, sale and distribution of a full range of home furnishings and accents to a network of independently operated and Ethan Allen operated design centers as well as related marketing and brand awareness efforts. Wholesale revenue is generated upon the wholesale sale and shipment of our product to all retail design centers, including those operated by Ethan Allen.
 
The retail segment sells home furnishings and accents to consumers through a network of Company operated design centers and online through ethanallen.com. Retail revenue is generated upon the retail sale and delivery of our product to our customers.
 
Inter-segment eliminations result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.
 
We evaluate performance of the respective segments based upon revenues and operating income. While the manner in which our home furnishings and accessories are marketed and sold is consistent, the nature of the underlying recorded sales (i.e. wholesale versus retail) and the specific services that each operating segment provides (i.e. wholesale manufacturing, sourcing, and distribution versus retail selling) are different. Within each segment, we maintain revenue information according to each respective product line (i.e. case goods, upholstery, or home accents and other). A breakdown of wholesale segment sales by these product lines for the three and six months ended December 31, 2015 and 2014 is provided as follows:
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Case Goods
     33 %     32 %     33 %     34 %
Upholstered Products
     50 %     49 %     50 %     47 %
Home Accents and Other
     17 %     19 %     17 %     19 %
      100 %     100 %     100 %     100 %
 
A breakdown of retail segment sales by these product lines for the three and six months ended December 31, 2015 and 2014 is provided as follows:
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Case Goods
     30 %     33 %     30 %     32 %
Upholstered Products
     48 %     45 %     47 %     45 %
Home Accents and Other
     22 %     22 %     23 %     23 %
      100 %     100 %     100 %     100 %
 
Segment information for the three and six months ended December 31, 2015 and 2014 is provided below (in thousands):
 
   
Three months ended
    
Six months ended
  
   
December 31,
    
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Net sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale segment
   $ 126,413     $ 116,210     $ 246,868     $ 240,810  
Retail segment
     164,703       153,207       310,743       298,250  
Elimination of inter-company sales
     (83,581 )     (72,350 )     (159,685 )     (151,287 )
Consolidated Total
   $ 207,535     $ 197,067     $ 397,926     $ 387,773  
                                 
Operating income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale segment
  $ 19,690     $ 13,155     $ 40,277     $ 34,697  
Retail segment
     6,689       2,953       8,329       4,715  
Adjustment of inter-company profit (1)
     128       1,552       (1,199 )     (1,282 )
Consolidated Total
   $ 26,507     $ 17,660     $ 47,407     $ 38,130  
                                 
Depreciation & Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale segment
   $ 1,909     $ 1,995     $ 3,820     $ 4,089  
Retail segment
     2,897       2,680       5,769       5,305  
Consolidated Total
   $ 4,806     $ 4,675     $ 9,589     $ 9,394  
                                 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale segment
   $ 2,340     $ 3,048     $ 3,856     $ 7,009  
Retail segment
     1,896       4,657       3,518       6,106  
Acquisitions
    -       -       -       1,991  
Consolidated Total
   $ 4,236     $ 7,705     $ 7,374     $ 15,106  
 
 
 
 
   
December 31,
    
June 30,
  
   
2015
    
2015
  
Total Assets:
 
 
 
 
 
 
 
 
Wholesale segment
   $ 276,470     $ 295,949  
Retail segment
     334,756       341,886  
Inventory profit elimination (2)
     (32,416 )     (31,858 )
Consolidated Total
   $ 578,810     $ 605,977  
 
(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.