Segment Data | 12. Segment Data The Company currently operates three business segments, retail, direct and manufacturing. The operating segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. The Company’s management evaluates segment operating results based on several indicators. The primary key performance indicators are sales and operating income for each segment. The table below represents key financial information for each of the Company’s business segments as well as corporate costs. The retail segment primarily includes the Company’s retail stores. The retail segment generates revenue primarily through the sale of VMS products through Vitamin Shoppe, Super Supplements and Vitapath retail stores in the United States, Puerto Rico and in Canada. The direct segment generates revenue through the sale of VMS products primarily through the Company’s websites and catalog. The Company’s websites offer customers online access to a full assortment of approximately 23,000 SKUs. The manufacturing segment supplies the retail and direct segments, along with various thirds parties, with finished products for sale. Corporate costs represent all other expenses not allocated to the retail, direct or manufacturing segments which include, but are not limited to: human resources, legal, retail management, direct management, finance, information technology, depreciation (primarily related to assets utilized by the retail and direct business segments as well as corporate assets) and amortization, and various other corporate level activity related expenses. Intercompany sales transactions are eliminated in consolidation. The Company’s segments are designed to allocate resources internally and provide a framework to determine management responsibility. The accounting policies of the segments are consistent with those described in Note 2. Summary of Significant Accounting Policies in the Fiscal 2014 Form 10-K. The Company has allocated $165.3 million, $45.3 million and $32.6 million of its recorded goodwill to the retail, direct and manufacturing segments, respectively. The Company does not have identifiable assets separated by segment, with the exception of the identifiable assets of the manufacturing segment which were $94.4 million and $96.2 million as of June 27, 2015 and December 27, 2014, respectively. Capital expenditures for the manufacturing segment for the six months ended June 27, 2015 were approximately $2.3 million. At June 27, 2015 and December 27, 2014, long lived assets of the manufacturing segment were $61.0 million and $59.9 million, respectively. The following table contains key financial information of the Company’s business segments (in thousands): Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, Net sales: Retail $ 278,200 $ 269,586 $ 566,183 $ 542,054 Direct 30,346 32,443 65,190 67,811 Manufacturing 24,664 5,014 46,492 5,014 Segment net sales 333,210 307,043 677,865 614,879 Elimination of intersegment revenues (10,872 ) (825 ) (18,692 ) (825 ) Net sales $ 322,338 $ 306,218 $ 659,173 $ 614,054 Income from operations: Retail $ 51,613 $ 51,737 $ 107,672 $ 108,436 Direct 5,587 5,760 10,652 12,785 Manufacturing (1) (1,510 ) (871 ) (1,211 ) (871 ) Corporate costs (2) (32,126 ) (28,460 ) (62,594 ) (57,937 ) Income from operations $ 23,564 $ 28,166 $ 54,519 $ 62,413 During Fiscal 2014, the Company determined the acquired manufacturing operations represented a reportable segment. As a result, the Company has reclassified prior period income from operations to manufacturing from corporate costs to conform to current period presentation. (1) Manufacturing loss from operations for the three and six months ended June 27, 2015 includes a $1.4 million charge for accounts receivable for one wholesale customer which were deemed uncollectible. Manufacturing loss from operations for the three and six months ended June 28, 2014 includes a $1.2 million charge from adjusting Nutri-Force inventory to fair value as part of purchase accounting. (2) Corporate costs include (in thousands): Three Months Ended Six Months Ended June 27, June 28, June 27, June 28, Depreciation and amortization expenses $ 9,155 $ 8,133 $ 18,035 $ 16,173 Management realignment charges 2,174 — 2,174 — Acquisition and integration costs 410 2,248 770 4,006 |