SEGMENTS AND CONCENTRATIONS

12 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

SEGMENTS AND CONCENTRATIONS

NOTE 16        SEGMENTS AND CONCENTRATIONS

Segments

The Company has three reportable segments: OEM distribution, retail distribution and design. See Note 2 for more information on the composition and accounting policies of our reportable segments.

Our chief operating decision maker (“CODM”) regularly reviews revenue and operating income for each segment to assess financial results and allocate resources. In Fiscal 2021, due to the growth of our retail division, we determined it to be a separate reportable segment. For our OEM and retail distribution segments, we exclude general and administrative and general corporate expenses from their measure of profitability as these expenses are not allocated to the segments and therefore not included in the measure of profitability used by the CODM. For the design segment, general and administrative expenses directly attributable to that segment are included in its measure of profitability as these expenses are included in the measure of its profitability reviewed by the CODM. We do not include intercompany activity in our segment results shown below to be consistent with the information that is presented to the CODM. Segment assets consist of accounts receivable and inventory, which are regularly reviewed by the CODM, as well as goodwill and intangible assets resulting from design segment acquisitions.

The Fiscal 2020 results of operations for each segment discussed below have been reformatted from what was previously disclosed to segregate the retail distribution segment and exclude general corporate expenses from segment operating income to show them as a reconciling item so that results are comparable to the current year presentation.

Information by segment and related reconciliations are shown in tables below: 

	Revenues
	Fiscal 2021		Fiscal 2020
OEM distribution	$	19,290,000	$	19,726,000
Retail distribution		3,183,000		1,026,000
Design		16,549,000		13,726,000
Total segment revenues	$	39,022,000	$	34,478,000

	Operating Income/(Loss)
	Fiscal 2021			Fiscal 2020
OEM distribution	$	1,479,000		$	1,616,000
Retail distribution		(779,000	)		(337,000	)
Design		603,000			(378,000	)
Total segment operating income		1,303,000			901,000
General corporate expenses		(2,068,000	)		(2,883,000	)
Total loss from operations		(765,000	)		(1,982,000	)
Other income, net		(1,289,000	)		(216,000	)
Income/(loss) before income taxes	$	524,000		$	(1,766,000	)

	Depreciation and Amortization
	Fiscal 2021		Fiscal 2020
OEM distribution	$	7,000	$	7,000
Retail distribution		1,000		–
Design		319,000		265,000
Total	$	327,000	$	272,000

	Segment Assets
	September 30,
	2021		2020
OEM distribution	$	5,898,000	$	5,103,000
Retail distribution		2,178,000		416,000
Design		5,824,000		6,649,000
Total segment assets		13,900,000		12,168,000
General corporate assets		5,956,000		7,188,000
Total assets	$	19,856,000	$	19,356,000

Geographic Concentrations

The Company’s long-lived assets consist of property and equipment and operating lease right of use assets, all of which are located in the United States. The following table sets forth our consolidated net revenues by country for Fiscal 2021 and Fiscal 2020: 

	Revenues
	Fiscal 2021		Fiscal 2020
United States	$	25,670,000	$	21,017,000
China		5,640,000		5,093,000
Germany		2,787,000		3,375,000
Poland		3,111,000		2,675,000
Other foreign countries		1,814,000		2,318,000
Total	$	39,022,000	$	34,478,000

Customer Concentrations

In Fiscal 2021 and Fiscal 2020, the Company had significant customers in the OEM distribution segment whose individual percentage of the Company’s consolidated revenues and accounts receivable was 10% or greater.

The following customers or their affiliates or contract manufacturers accounted for 10% or more of the Company’s consolidated net revenues for Fiscal 2021 and Fiscal 2020: 

	Fiscal 2021		Fiscal 2020
Customer A	$	5,343,000	$	6,145,000
Customer B		3,913,000		3,448,000
Customer C		5,111,000		4,912,000

The following customers or their affiliates or contract manufacturers accounted for 10% or more of the Company’s consolidated accounts receivable at September 30, 2021 and 2020:

	September 30,
	2021		2020
Customer A	$	1,454,000	$	977,000
Customer B		1,259,000		966,000
Customer C		1,138,000		843,000

Supplier Concentration

The Company’s OEM and retail distribution segments procure substantially all their products through independent suppliers in China through Forward China. Depending on the product, Forward China may require several different suppliers to furnish component parts or pieces.