Segment and Geographic Information | NOTE 5 – SEGMENT AND GEOGRAPHIC INFORMATION The Company follows accounting guidance which requires disclosure of segment data based on how management makes decisions about allocating resources to segments and measuring their performance. The Company conducts its business in two operating segments: Wholesale and Retail. The Company’s Wholesale segment includes the designing, manufacturing and distribution of watches of quality owned brands and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Retail segment includes the Company’s retail outlet locations. The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 35.7%, 8.4%, 6.5% and 4.5%, respectively, of the Company’s total net sales for the three months ended October 31, 2017. For the three months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.5%, 7.3%, 7.2% and 5.4%, respectively, of the Company’s total net sales. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 31.7%, 9.4%, 7.8% and 5.2%, respectively, of the Company’s total net sales for the nine months ended October 31, 2017. For the nine months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.1%, 8.4%, 8.4% and 5.9%, respectively, of the Company’s total net sales. Operating Segment Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 75,138 $ 73,749 Licensed brands category 95,015 86,818 After-sales service and all other 2,159 3,522 Total Wholesale 172,312 164,089 Retail 18,381 15,729 Consolidated total $ 190,693 $ 179,818 Operating Income (3) (4) 2017 2016 Wholesale $ 22,250 $ 28,697 Retail 2,935 2,374 Consolidated total $ 25,185 $ 31,071 Operating Segment Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 154,620 $ 162,428 Licensed brands category 208,914 205,229 After-sales service and all other 6,956 9,601 Total Wholesale 370,490 377,258 Retail 48,249 44,709 Consolidated total $ 418,739 $ 421,967 Operating Income (3) (4) 2017 2016 Wholesale $ 22,559 $ 39,898 Retail 7,295 6,642 Consolidated total $ 29,854 $ 46,540 Total Assets October 31, 2017 January 31, 2017 October 31, 2016 Wholesale $ 633,101 $ 584,518 $ 600,885 Retail 26,465 23,284 23,593 Consolidated total $ 659,566 $ 607,802 $ 624,478 Geographic Location Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating Income (3) (4) 2017 2016 2017 2016 United States (1) $ 85,685 $ 101,854 $ 2,971 $ 14,626 International (2) 105,008 77,964 22,214 16,445 Consolidated total $ 190,693 $ 179,818 $ 25,185 $ 31,071 United States and International net sales are net of intercompany sales of $87.2 million and $75.6 million for the three months ended October 31, 2017 and 2016, respectively. Geographic Location Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating (Loss) / Income (3) (4) 2017 2016 2017 2016 United States (1) $ 192,325 $ 228,734 $ (5,409) $ 12,841 International (2) 226,414 193,233 35,263 33,699 Consolidated total $ 418,739 $ 421,967 $ 29,854 $ 46,540 United States and International net sales are net of intercompany sales of $211.8 million and $231.5 million for the nine months ended October 31, 2017 and 2016, respectively. (1) The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively. (2) The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively. (3) In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. (4) In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. Total Assets October 31, 2017 January 31, 2017 October 31, 2016 United States $ 195,659 $ 207,246 $ 242,881 International 463,907 400,556 381,597 Consolidated total $ 659,566 $ 607,802 $ 624,478 Property, Plant and Equipment, Net October 31, 2017 January 31, 2017 October 31, 2016 United States $ 16,762 $ 19,197 $ 20,307 International 7,875 14,976 14,560 Consolidated total $ 24,637 $ 34,173 $ 34,867 |