Reportable Segment Information - Notes to Financial Statements

9 Months Ended

Oct. 28, 2017

Reportable Segment Information [Abstract]

NOTE 5 – REPORTABLE SEGMENT INFORMATION:

The Company has determined that it has four operating segments, as defined under ASC 280-10, including Cato, It’s Fashion, Versona and Credit. As outlined in ASC 280-10, the Company has two reportable segments: Retail and Credit. The Company has aggregated its three retail operating segments, including e-commerce, based on the aggregation criteria outlined in ASC 280-10, which states that two or more operating segments may be aggregated into a single reportable segment if aggregation is consistent with the objective and basic principles of ASC 280-10, which require the segments to have similar economic characteristics, products, production processes, clients and methods of distribution.

The Company’s retail operating segments have similar economic characteristics and similar operating, financial and competitive risks. They are similar in nature of product, as they all offer women’s apparel, shoes and accessories. Merchandise inventory for the Company’s retail operating segments is sourced from the same countries and some of the same vendors, using similar production processes. Merchandise for the Company’s operating segments is distributed to retail stores in a similar manner through the Company’s single distribution center and is subsequently distributed to clients in a similar manner.

The Company operates its women’s fashion specialty retail stores in 33 states as of October 28, 2017, principally in the southeastern United States. The Company offers its own credit card to its customers and all credit authorizations, payment processing and collection efforts are performed by a separate subsidiary of the Company.

NOTE 5 – REPORTABLE SEGMENT INFORMATION (CONTINUED):

The following schedule summarizes certain segment information (in thousands):

Three Months Ended				Nine Months Ended
October 28, 2017	Retail	Credit	Total	October 28, 2017	Retail	Credit	Total

Revenues	$189,263	$1,010	$190,273	Revenues	$633,816	$3,159	$636,975
Depreciation	5,039	8	5,047	Depreciation	14,958	31	14,989
Interest and other income	(1,200)	-	(1,200)	Interest and other income	(3,472)	-	(3,472)
Income/(Loss) before income taxes	(313)	177	(136)	Income/(Loss) before income taxes	22,872	921	23,793
Capital expenditures	2,337	-	2,337	Capital expenditures	8,762	-	8,762

Three Months Ended				Nine Months Ended
October 29, 2016	Retail	Credit	Total	October 29, 2016	Retail	Credit	Total

Revenues	$208,060	$1,202	$209,262	Revenues	$732,408	$3,714	$736,122
Depreciation	5,722	12	5,734	Depreciation	17,045	37	17,082
Interest and other income	(1,288)	-	(1,288)	Interest and other income	(5,593)	-	(5,593)
Income/(Loss) before income taxes	3,010	364	3,374	Income/(Loss) before income taxes	70,330	1,204	71,534
Capital expenditures	14,091	-	14,091	Capital expenditures	24,043	-	24,043

	Retail	Credit	Total

Total assets as of October 28, 2017	$492,785	$55,566	$548,351
Total assets as of January 28, 2017	554,716	51,608	606,324

The Company evaluates segment performance based on income before taxes. The Company does not allocate certain corporate expenses or income taxes to the credit segment.

The following schedule summarizes the direct expenses of the credit segment, which are reflected in Selling, general and administrative expenses (in thousands):

	Three Months Ended				Nine Months Ended
		October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016

Bad debt expense	$	208	$	216	$	466	$	658
Payroll		210		214		654		650
Postage		133		153		406		488
Other expenses		274		255		681		714
Total expenses	$	825	$	838	$	2,207	$	2,510