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Business Segments, Geographic Data, Sales by Product Group and Major Customers
 9 Months Ended
Sep. 30, 2015
Business Segments, Geographic Data, Sales by Product Group and Major Customers
Note 2 — Business Segments, Geographic Data, Sales by Product Group and Major Customers

The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio of products. The Company’s reportable segments are Traditional Toys and Electronics, and Role Play, Novelty and Seasonal Toys, each of which includes worldwide sales.

The Traditional Toys and Electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, foot to floor ride-on vehicles, wagons and pet treats and related products.

The Role Play, Novelty and Seasonal Toys segment includes role play and dress-up products, Halloween and everyday costume play, novelty toys, seasonal and outdoor products and indoor and outdoor kids’ furniture.

Segment performance is measured at the operating income level. All sales are made to external customers and general corporate expenses have been attributed to the various segments based upon sales volumes. Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill and other assets.
 
Results are not necessarily those that would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the three and nine months ended September 30, 2014 and 2015 and as of December 31, 2014 and September 30, 2015 are as follows (in thousands):
 
   
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
  
  
2014
    
2015
    
2014
    
2015
  
                         
Net Sales
                        
Traditional Toys and Electronics
  
$
173,785
    
$
204,332
    
$
258,872
    
$
332,737
  
Role Play, Novelty and Seasonal Toys
    
175,577
      
132,695
      
297,172
      
249,597
  
   
$
349,362
    
$
337,027
    
$
556,044
    
$
582,334
  
 
 
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
  
  
2014
  
2015
  
2014
  
2015
  
                 
Operating Income
                
Traditional Toys and Electronics
  
$
21,322
    
$
20,431
    
$
6,208
    
$
9,547
  
Role Play, Novelty and Seasonal Toys
    
22,490
      
24,197
      
17,861
      
27,874
  
   
$
43,812
    
$
44,628
    
$
24,069
    
$
37,421
  
 
   
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
  
  
2014
    
2015
    
2014
    
2015
  
                         
Depreciation and Amortization Expense
                        
Traditional Toys and Electronics
  
$
4,773
    
$
4,546
    
$
9,062
    
$
8,825
  
Role Play, Novelty and Seasonal Toys
    
3,859
      
2,833
      
7,072
      
5,395
  
   
$
8,632
    
$
7,379
    
$
16,134
    
$
14,220
  
 
   
December 31,
    
September 30,
  
   
2014
    
2015
  
Assets
            
Traditional Toys and Electronics
  
$
313,380
    
$
397,082
  
Role Play, Novelty and Seasonal Toys
    
248,402
      
242,475
  
   
$
561,782
    
$
639,557
  

The following tables present information about the Company by geographic area as of December 31, 2014 and September 30, 2015 and for the three and nine months ended September 30, 2014 and 2015 (in thousands):
 
   
December 31,
2014
    
September 30,
2015
  
Long-lived Assets
            
China
  
$
8,816
    
$
10,201
  
United States
    
1,689
      
7,827
  
Hong Kong
    
591
      
576
  
   
$
11,096
    
$
18,604
  
 
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2014
    
2015
    
2014
    
2015
  
Net Sales by Customer Area
                        
United States
  
$
281,989
    
$
242,467
    
$
448,842
    
$
416,690
  
Europe
    
28,018
      
55,389
      
41,410
      
92,948
  
Canada
    
14,434
      
16,441
      
22,948
      
27,255
  
Hong Kong
    
1,354
      
414
      
2,095
      
1,210
  
Other
    
23,567
      
22,316
      
40,749
      
44,231
  
   
$
349,362
    
$
337,027
    
$
556,044
    
$
582,334
  

Major Customers

Net sales to major customers for the three and nine months ended September 30, 2014 and 2015 were as follows (in thousands, except for percentages):
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2014
    
2015
    
2014
    
2015
  
  
  
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
  
                                                 
Wal-Mart
  
$ 
81,731
      
23.4
%
  
$ 
77,240
      
22.9
%
  
$ 
115,295
      
20.7
%
  
$ 
126,743
      
21.7
%
Target
    
55,849
      
16.0
      
40,647
      
12.1
      
79,954
      
14.4
      
66,292
      
11.4
  
Toys ‘R’ Us 
    
33,770
      
9.7
      
27,292
      
8.1
      
61,063
      
11.0
      
50,620
      
8.7
  
   
$
171,350
      
49.1
%
  
$
145,179
      
43.1
%
  
$
256,312
      
46.1
%
  
$ 
243,655
      
41.8
%

No other customer accounted for more than 10% of the Company’s total net sales.

At December 31, 2014 and September 30, 2015, the Company’s three largest customers accounted for approximately 29.8% and 33.0% respectively, of net accounts receivable. The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses.