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BUSINESS SEGMENTS
 12 Months Ended
Dec. 31, 2014
BUSINESS SEGMENTS

NOTE J — BUSINESS SEGMENTS

Segment information

During the second quarter of 2014, the Company realigned its reportable segments into three categories, U.S. Wholesale, International and Retail Direct. The U.S. Wholesale segment, formerly the Wholesale segment, includes the Company’s primary domestic business that designs, markets and distributes its products to retailers and distributors. The International Segment consists of certain business operations conducted outside the U.S. which was previously included in the Wholesale segment. The Retail Direct segment is that in which the Company markets and sells a limited selection of its products to consumers through its Pfaltzgraff®, Mikasa®, Built NY®, Fred® & Friends and Lifetime Sterling® websites.

The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations. While the three segments distribute similar products, the segments have been distinct due to the different methods the Company uses to sell, market and distribute the products. Management evaluates the performance of the U.S. Wholesale, International and Retail Direct segments based on net sales and income (loss) from operations. Such measures give recognition to specifically identifiable operating costs such as cost of sales, distribution expenses and selling, general and administrative expenses. Certain general and administrative expenses, such as senior executive salaries and benefits, stock compensation, director fees and accounting, legal and consulting fees, are not allocated to the specific segments and are reflected as unallocated corporate expenses.

As a result of the Company’s realignment of its reportable segments, previous periods presented have been recast to conform with the current period presentation

     Year Ended December 31,  
     2014      2013      2012  
     (in thousands)  

Net sales:

         

U.S. Wholesale

    $ 441,293       $ 444,187       $ 422,241   

International

      125,230         38,907         42,621   

Retail Direct

      19,487         20,680         21,980   

Non-operating adjustment(1)

      —           (1,053 )       —     
  

 

 

     

 

 

     

 

 

  

Total net sales

 $ 586,010    $ 502,721    $ 486,842   
  

 

 

     

 

 

     

 

 

  

Income from operations:

U.S. Wholesale(2)

 $ 34,874    $ 46,303    $ 40,227   

International

   3,759      (2,151 )    303   

Retail Direct

   (1,034 )    (62 )    463   

Non-operating adjustment(1)

   —        (1,053 )    —     

Unallocated corporate expenses

   (16,215 )    (14,851 )    (13,658 ) 
  

 

 

     

 

 

     

 

 

  

Total income from operations

 $ 21,384    $ 28,186    $ 27,335   
  

 

 

     

 

 

     

 

 

  

Depreciation and amortization:

U.S. Wholesale

 $ 8,618    $ 8,549    $ 7,637   

International

   5,379      1,601      1,437   

Retail Direct

   203      265      250   
  

 

 

     

 

 

     

 

 

  

Total depreciation and amortization

 $ 14,200    $ 10,415    $ 9,324   
  

 

 

     

 

 

     

 

 

  

Note:

 

(1) In 2013, the Company recorded a non-operating adjustment to reduce accounts receivable for previously issued credits within the Retail Direct business which related to 2010 and earlier periods.
(2) In 2014, income from operations for the U.S. Wholesale segment includes $3.4 million of intangible asset impairment and $4.2 million related to the reduction in certain contingent consideration accruals. In 2012, income from operations for the U.S. Wholesale segment includes $1.1 million of intangible asset impairment.
     Year Ended December 31,  
     2014      2013      2012  
     (in thousands)  

Assets:

         

U.S. Wholesale

    $ 287,744       $ 291,757       $ 305,054   

International

      128,055         35,365         37,818   

Retail Direct

      535         730         512   

Unallocated/ corporate/ other

      5,068         8,887         5,413   
  

 

 

     

 

 

     

 

 

  

Total assets

 $ 421,402    $ 336,739    $ 348,797   
  

 

 

     

 

 

     

 

 

  

Capital expenditures:

U.S. Wholesale

 $ 5,431    $ 3,375    $ 3,637   

International

   650      272      1,260   

Retail Direct

   90      195      58   
  

 

 

     

 

 

     

 

 

  

Total capital expenditures

 $ 6,171    $ 3,842    $ 4,955   
  

 

 

     

 

 

     

 

 

  
     Year Ended December 31,  
     2014      2013      2012  
     (in thousands)  

Goodwill:

         

U.S. Wholesale

         

Beginning balance

    $ 2,412       $ 2,412       $ —     

Acquisition activity

      —           —           2,412   
  

 

 

     

 

 

     

 

 

  

Ending balance

   2,412      2,412      2,412   
  

 

 

     

 

 

     

 

 

  

International

Beginning balance

   2,673      2,673      2,673   

Acquisition activity

   13,016      —        —     
  

 

 

     

 

 

     

 

 

  

Ending balance

   15,689      2,673      2,673   
  

 

 

     

 

 

     

 

 

  

Total goodwill (1)

 $ 18,101    $ 5,085    $ 5,085   
  

 

 

     

 

 

     

 

 

  

Note:

 

(1) No goodwill is allocated to the Company’s Retail Direct reportable segment.

Geographical information

The following table sets forth net sales and long-lived assets by the major geographic locations (in thousands):

 

     Year ended December 31,  
     2014      2013      2012  

Net sales:

         

United States

    $ 436,049       $ 439,129       $ 430,758   

United Kingdom

      93,432         29,012         30,709   

Rest of World

      56,529         34,580         25,375   
  

 

 

     

 

 

     

 

 

  

Total

 $ 586,010    $ 502,721    $ 486,842   
  

 

 

     

 

 

     

 

 

  
            December 31,  
            2014      2013  

Long-lived assets, excluding intangible assets, at period-end:

         

United States

       $ 54,594       $ 65,043   

United Kingdom

         3,927         1,321   

Rest of World

         1,167         550   
     

 

 

     

 

 

  

Total

 $ 59,688    $ 66,914   
     

 

 

     

 

 

  

Product category information – net sales

The following table sets forth net sales by major product categories included within the Company’s U.S. Wholesale operating segment:

 

     Year Ended December 31,  
     2014      2013      2012  
     (in thousands)  

Category:

   

Kitchenware

    $ 269,265       $ 281,211       $ 256,154   

Tableware (1)

      117,546         110,108         113,911   

Home Solutions

      54,482         52,868         52,176   
  

 

 

     

 

 

     

 

 

  

Total

 $ 441,293    $ 444,187    $ 422,241   
  

 

 

     

 

 

     

 

 

  

 

(1) The tableware product category previously included revenue from Creative Tops, which is included as part of the International segment. Revenue sources disclosed in 2013 have been reclassified to conform to the current year presentation for comparative purposes.

The following table sets forth net sales by major product categories included within the Company’s International operating segment:

 

     Year Ended December 31,  
     2014      2013      2012  
     (in thousands)  

Category:

   

Kitchenware

    $ 67,604       $ —         $ —     

Tableware

      57,626         38,907         42,621   
  

 

 

     

 

 

     

 

 

  

Total

 $ 125,230    $ 38,907    $ 42,621