19.	Segment Information

We have strategically aligned our business into

three

reportable segments as defined in ASC

280,

Segment Reporting

, and as described below:

●

Wholesale.

The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned stores retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations as well as all corporate selling, general and administrative expenses, including those corporate expenses related to both Company- and licensee-owned stores. Our wholesale segment also includes our holdings of short-term investments and retail real estate previously leased as licensee stores. The earnings and costs associated with these assets are included in other loss, net, in our consolidated statements of income.

●

Retail – Company-owned

tores.

Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

●

Logistical services

With our acquisition of Zenith on

February 2, 2015,

we created the logistical services operating segment which reflects the operations of Zenith. In addition to providing shipping and warehousing services for the Company, Zenith also provides similar services to other customers, primarily in the furniture industry. Revenue from the performance of these services to other customers is included in logistics revenue in our consolidated statement of income. Zenith’s operating costs are included in selling, general and administrative expenses and total

$81,468,

$80,068

and

$79,725

for fiscal

2018,

2017

and

2016,

respectively.

During the

fourth

quarter of fiscal

2018,

we substantially completed transferring operational control of home delivery services for BHF stores from Zenith to our retail segment, including the transfer of the assets and many of the employees used in providing that service. Accordingly, the results for the retail and logistical services segments for all periods presented have been restated to present the depreciation and amortization, capital expenditures and identifiable assets associated with home delivery services formerly provided by Zenith to the Bassett retail segment as though they had been incurred within the retail segment, and intercompany revenues for those services are

longer included in the logistical services segment. The impact of the restatement upon the income (loss) from operations for both the logistical services and retail segments was

not

material. Concurrently with the transfer of home delivery operations to retail, Zenith also ceased providing such services to

third

party customers. Revenues from Zenith’s home delivery services formerly provided to

third

party customers and the associated costs thereof continue to be reported in the logistical services segment. Zenith continues to provide other intercompany shipping and warehousing services to Bassett which are eliminated in consolidation.

Inter-company sales elimination represents the elimination of wholesale sales to our Company-owned stores and the elimination of Zenith logistics revenue from our wholesale segment. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has

not

been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate, and the elimination of shipping and handling charges from Zenith for services provided to our wholesale operations.

The following table presents segment information for each of the last

three

fiscal years:

	2018			2017			2016
Net Sales
Wholesale	$	255,958		$	249,193		$	240,346
Retail		268,883			268,264			254,667
Logistical services		82,866			83,030			83,236
Inter-company eliminations:
Furniture and accessories		(122,372	)		(119,360	)		(117,817	)
Logistical services		(28,480	)		(28,624	)		(28,394	)
Consolidated	$	456,855		$	452,503		$	432,038

Income (loss) from Operations
Wholesale	$	12,274		$	19,121		$	18,672
Retail		(312	)		3,490			4,333
Logistical services		1,398			2,962			3,511
Inter-company elimination		1,494			1,445			1,677
Lease exit costs		(301	)		-			-
Asset impairment charges		(469	)		-			-
Consolidated income from operations	$	14,084		$	27,018		$	28,193

Depreciation and Amortization
Wholesale	$	3,038		$	2,648		$	2,053
Retail		6,096			6,355			6,260
Logistical services		4,069			4,309			3,936
Consolidated	$	13,203		$	13,312		$	12,249

Capital Expenditures
Wholesale	$	4,194		$	4,875		$	7,232
Retail		12,769			8,108			5,932
Logistical services		1,338			2,517			8,337
Consolidated	$	18,301		$	15,500		$	21,501

Identifiable Assets
Wholesale	$	144,209		$	152,181		$	139,477
Retail		96,241			90,186			90,091
Logistical services		51,191			51,381			48,699
Consolidated	$	291,641		$	293,748		$	278,267

A breakdown of wholesale sales by product category for each of the last

three

fiscal years is provided below:

	2018			2017			2016

Wood		35	%		35	%		37	%
Upholstery		65	%		65	%		63	%
		100	%		100	%		100	%