11.

Segment Information

The Company’s operations are conducted through

three

operating segments consisting of direct-to-consumer (“DTC”), commercial and international franchising. The DTC segment includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S., Canada, China, Denmark, Ireland and the United Kingdom (“U.K.”), including the Company’s e-commerce sites and temporary stores. The commercial segment includes the Company’s transactions with other businesses, mainly comprised of licensing the Company’s intellectual properties for

third

party use and wholesale activities. The international franchising segment includes the licensing activities of the Company’s franchise agreements with store locations in Europe (outside of the U.K., Ireland and Denmark), Asia, Australia, the Middle East, Africa and Mexico. The operating segments have discrete sources of revenue, different capital structures and different cost structures. These operating segments represent the basis on which the Company’s chief operating decision maker regularly evaluates the business in assessing performance, determining the allocation of resources and the pursuit of future growth opportunities. Accordingly, the Company has determined that each of its operating segments represent a reportable segment. The

three

reportable segments follow the same accounting policies used for the Company’s consolidated financial statements.

Following is a summary of the financial information for the Company’s reportable segments (in thousands):

	Direct-to-				International
	Consumer		Commercial		Franchising		Total
Thirteen weeks ended November 2, 2019
Net sales to external customers		$ 66,575		$ 2,560		$ 1,249		$ 70,384
Income (loss) before income taxes		(8,578)		753		131		(7,694)
Capital expenditures		5,155		-		-		5,155
Depreciation and amortization		3,560		-		1		3,561
Thirteen weeks ended November 3, 2018
Net sales to external customers		$ 65,298		$ 2,171		$ 1,225		$ 68,694
Income (loss) before income taxes		(11,406)		1,054		360		(9,992)
Capital expenditures		1,742		-		-		1,742
Depreciation and amortization		4,022		-		26		4,048

Thirty-nine weeks ended November 2, 2019
Net sales to external customers		$ 222,837		$ 8,507		$ 2,616		$ 233,960
Income (loss) before income taxes		(9,384)		3,488		(130)		(6,027)
Capital expenditures		10,099		-		-		10,099
Depreciation and amortization		10,354		-		5		10,359
Thirty-nine weeks ended November 3, 2018
Net sales to external customers		$ 227,760		$ 4,245		$ 3,051		$ 235,056
Income (loss) before income taxes		(14,577)		1,705		981		(11,891)
Capital expenditures		8,853		-		-		8,853
Depreciation and amortization		12,159		1		26		12,186
Total Assets as of:
November 2, 2019 (1)		281,365		7,508		7,804		$ 296,677
November 3, 2018		166,833		6,625		5,396		178,854

For purposes of this table only:

(

) The increase in total assets when comparing

November 2, 2019

November 3, 2018

is mainly the result of the adoption of Topic

842

on leases effective

February 3, 2019.

The Company’s reportable segments are primarily determined by the types of products and services that they offer. Each reportable segment

may

operate in many geographic areas. Revenues are recognized in the geographic areas based on the location of the customer or franchisee. The following schedule is a summary of the Company’s sales to external customers and long-lived assets by geographic area (in thousands):

	North
	America (1)		Europe (2)		Other (3)		Total
Thirteen weeks ended November 2, 2019
Net sales to external customers	$	57,503	$	11,557	$	1,324	$	70,384
Thirteen weeks ended November 3, 2018
Net sales to external customers	$	56,440	$	11,575	$	679	$	68,694

Thirty-nine weeks ended November 2, 2019
Net sales to external customers	$	198,900	$	32,639	$	2,421	$	233,960
Property and equipment, net		60,481		5,462		11		65,954
Thirty-nine weeks ended November 3, 2018
Net sales to external customers	$	198,372	$	35,005	$	1,679	$	235,056
Property and equipment, net		64,249		9,075		19		73,343

For purposes of this table only:

(

) North America includes corporately managed locations in the United States, Canada, Puerto Rico and franchise business in Mexico

(

) Europe includes corporately managed locations in the U.K., Ireland, Denmark and franchise businesses in Europe

(

) Other includes franchise businesses outside of North America and Europe and a corporately-managed location in China