BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2019

The Company has two reportable segments, U.S. and International. Prior to October 1, 2018, the U.S. segment was reported as two separate reportable segments, U.S. Wholesale and Retail Direct. The Company changed its reporting structure as of October 1, 2018 to reflect how the Company is managing its operations as well as what the chief operating decision maker reviews to make organizational decisions about resource allocations. Prior period segment information has been recast to reflect the current reportable segment structure of the Company.

The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations. The U.S. segment includes the Company’s primary domestic business that designs, markets and distributes its products to retailers, distributors and its internet websites. The International segment consists of certain business operations conducted outside the U.S. Management evaluates the performance of the U.S. and International 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.

The Company implemented its SKU Rationalization initiative to improve the productivity of its inventory and simplify its U.S. business. During the nine months ended September 30, 2019, the Company recorded an $8.5 million charge to cost of sales associated with the SKU Rationalization initiative, which negatively impacted income (loss) from operations for the U.S. segment.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
	(in thousands)
Net sales
U.S.	$	195,199	$	186,064	$	445,329	$	410,955
International	20,303		23,384		62,635		65,313
Total net sales	$	215,502	$	209,448	$	507,964	$	476,268
Income (loss) from operations
U.S.	$	24,328	$	20,027	$	24,036	$	16,455
International	(12,898)		(2,522)		(16,813)		(5,946)
Unallocated corporate expenses	(4,501)		(5,202)		(15,126)		(14,823)
Income (loss) from operations	$	6,929	$	12,303	$	(7,903)	$	(4,314)
Depreciation and amortization
U.S.	$	5,094	$	5,009	$	15,575	$	13,448
International	1,028		1,067		3,196		3,359
Total depreciation and amortization	$	6,122	$	6,076	$	18,771	$	16,807


	September 30, 2019		December 31, 2018
	(in thousands)
Assets
U.S.	$	772,871	$	604,532
International	105,975		94,210
Unallocated corporate	4,886		9,830
Total Assets	$	883,732	$	708,572