Note 7 – Segment Information

Industry Segments

The Company has two identifiable business segments. The Wholesale segment designs, manufactures, sources and distributes decorated party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. The Retail segment operates specialty retail party supply stores in the United States and Canada, principally under the names Party City, Halloween City and Toy City, and it operates e-commerce websites, principally through the domain name Partycity.com. The Retail segment also franchises both individual stores and franchise areas throughout the United States, Mexico and Puerto Rico, principally under the name Party City. The Company’s industry segment data for the three months ended September 30, 2018 and September 30, 2017 was as follows:


	Wholesale			Retail		Consolidated
Three Months Ended September 30, 2018
Revenues:
Net sales	$	424,569		$	375,680	$	800,249
Royalties and franchise fees		—			2,206		2,206

Total revenues		424,569			377,886		802,455
Eliminations		(249,409	)		—		(249,409	)

Net revenues	$	175,160		$	377,886	$	553,046

Income from operations	$	15,501		$	16,237	$	31,738

Interest expense, net							27,705
Other expense, net							5,696

Loss before income taxes						$	(1,663	)


	Wholesale			Retail		Consolidated
Three Months Ended September 30, 2017
Revenues:
Net sales	$	381,858		$	364,057	$	745,915
Royalties and franchise fees		—			2,759		2,759

Total revenues		381,858			366,816		748,674
Eliminations		(188,565	)		0		(188,565	)

Net revenues	$	193,293		$	366,816	$	560,109

Income from operations	$	22,808		$	14,580	$	37,388

Interest expense, net							23,228
Other income, net							593

Income before income taxes						$	13,567

The Company’s industry segment data for the nine months ended September 30, 2018 and September 30, 2017 was as follows:


	Wholesale			Retail		Consolidated
Nine Months Ended September 30, 2018
Revenues:
Net sales	$	988,129		$	1,150,609	$	2,138,738
Royalties and franchise fees		—			7,832		7,832

Total revenues		988,129			1,158,441		2,146,570
Eliminations		(524,689	)		—		(524,689	)

Net revenues	$	463,440		$	1,158,441	$	1,621,881

Income from operations	$	31,997		$	87,448	$	119,445

Interest expense, net							76,481
Other expense, net							9,076

Income before income taxes						$	33,888


	Wholesale			Retail		Consolidated
Nine Months Ended September 30, 2017
Revenues:
Net sales	$	929,255		$	1,103,127	$	2,032,382
Royalties and franchise fees		—			9,020		9,020

Total revenues		929,255			1,112,147		2,041,402
Eliminations		(459,416	)		—		(459,416	)

Net revenues	$	469,839		$	1,112,147	$	1,581,986

Income from operations	$	49,258		$	63,500	$	112,758

Interest expense, net							65,214
Other expense, net							860

Income before income taxes						$	46,684