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BUSINESS SEGMENTS | 12 Months Ended
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Dec. 31, 2017
BUSINESS SEGMENTS | NOTE K — BUSINESS SEGMENTS Segment information The Company has three reportable segments, U.S. Wholesale, International and Retail Direct. The U.S. 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. 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, Fred and Friends, Built NY, Fitz and Floyd, Housewares Deals 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.
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in thousands) |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Wholesale |  | $ | 462,588 |  |  | $ | 470,981 |  |  | $ | 458,593 |
International |  |  | 97,757 |  |  |  | 101,070 |  |  |  | 108,000 |
Retail Direct |  |  | 19,131 |  |  |  | 20,568 |  |  |  | 21,077 |
Total net sales |  | $ | 579,476 |  |  | $ | 592,619 |  |  | $ | 587,670 |
Income from operations: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Wholesale(1) |  | $ | 39,764 |  |  | $ | 39,745 |  |  | $ | 41,343 |
International (2) |  |  | (6,984 | ) |  |  | 3,052 |  |  |  | (1,600 | )
Retail Direct |  |  | (423 | ) |  |  | 770 |  |  |  | (596 | )
Unallocated corporate expenses |  |  | (17,177 | ) |  |  | (16,490 | ) |  |  | (14,916 | )
Total income from operations |  | $ | 15,180 |  |  | $ | 27,077 |  |  | $ | 24,231 |
Depreciation and amortization: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Wholesale(3) |  | $ | 9,851 |  |  | $ | 10,095 |  |  | $ | 8,784 |
International |  |  | 4,185 |  |  |  | 3,917 |  |  |  | 5,272 |
Retail Direct |  |  | 153 |  |  |  | 136 |  |  |  | 147 |
Total depreciation and amortization |  | $ | 14,189 |  |  | $ | 14,148 |  |  | $ | 14,203 |
Capital expenditures: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Wholesale |  | $ | 3,899 |  |  | $ | 2,767 |  |  | $ | 4,087 |
International |  |  | 2,135 |  |  |  | 424 |  |  |  | 1,004 |
Retail Direct |  |  | 277 |  |  |  | 189 |  |  |  | 75 |
Total capital expenditures |  | $ | 6,311 |  |  | $ | 3,380 |  |  | $ | 5,166 |
(1) | In 2016 and 2015, income from operations for the U.S. Wholesale segment includes $2.4 million and $0.4 million, respectively, of restructuring expenses related to the U.S. Wholesale restructuring plan as described in Note A. The 2016 period also includes a $1.2 million charge to correct prior years’ depreciation of certain assets within the U.S. Wholesale segment.
(2) | 2017 income from operations for the International segment includes $1.0 million of restructuring expenses related to the integration of entities in Europe. 2015 income from operations for the International segment includes a $1.0 million net charge related to the change in certain contingent consideration accruals.
(3) | The 2016 period includes a $1.2 million charge to correct prior years’ depreciation of certain assets within the U.S. Wholesale segment.
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |
|  | (in thousands) |
Assets: |  |  |  |  |  |  |  |
U.S. Wholesale |  | $ | 281,398 |  |  | $ | 287,313 |
International |  |  | 105,984 |  |  |  | 95,698 |
Retail Direct |  |  | 613 |  |  |  | 501 |
Unallocated/ corporate/ other |  |  | 13,526 |  |  |  | 16,342 |
Total assets |  | $ | 401,521 |  |  | $ | 399,854 |
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |
|  | (in thousands) |
Goodwill: |  |  |  |  |  |  |  |
U.S. Wholesale |  |  |  |  |  |  |  |
Beginning balance |  | $ | 2,412 |  |  | $ | 2,412 |
Acquisition activity |  |  | 434 |  |  |  | — |
Ending balance |  |  | 2,846 |  |  |  | 2,412 |
International |  |  |  |  |  |  |  |
Beginning balance |  |  | 11,789 |  |  |  | 15,689 |
Foreign currency translation adjustment |  |  | 1,137 |  |  |  | (3,900 | )
Ending balance |  |  | 12,926 |  |  |  | 11,789 |
Total goodwill (1) |  | $ | 15,772 |  |  | $ | 14,201 |
(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:
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in thousands) |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 460,788 |  |  | $ | 472,962 |  |  | $ | 462,234 |
United Kingdom |  |  | 74,834 |  |  |  | 74,991 |  |  |  | 81,347 |
Rest of World |  |  | 43,854 |  |  |  | 44,666 |  |  |  | 44,089 |
Total |  | $ | 579,476 |  |  | $ | 592,619 |  |  | $ | 587,670 |
|  | December 31, |
|  | 2017 |  |  | 2016 |
|  | (in thousands) |
Long-lived assets, excluding intangible assets, at period-end: |  |  |  |  |  |  |  |
United States |  | $ | 45,285 |  |  | $ | 43,431 |
United Kingdom |  |  | 2,779 |  |  |  | 1,186 |
Rest of World |  |  | 729 |  |  |  | 1,112 |
Total |  | $ | 48,793 |  |  | $ | 45,729 |
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, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Category: |  | (in thousands) |
Kitchenware |  | $ | 276,574 |  |  | $ | 286,815 |  |  | $ | 295,592 |
Tableware |  |  | 134,034 |  |  |  | 135,901 |  |  |  | 125,445 |
Home Solutions |  |  | 51,980 |  |  |  | 48,265 |  |  |  | 37,556 |
Total |  | $ | 462,588 |  |  | $ | 470,981 |  |  | $ | 458,593 |
The following table sets forth net sales by major product categories included within the Company’s International operating segment:
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in thousands) |
Category: |  |  |  |
Kitchenware |  | $ | 59,686 |  |  | $ | 59,742 |  |  | $ | 61,291 |
Tableware |  |  | 38,071 |  |  |  | 41,328 |  |  |  | 46,709 |
Total |  | $ | 97,757 |  |  | $ | 101,070 |  |  | $ | 108,000 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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