SEGMENTS AND CONCENTRATIONS

9 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENTS AND CONCENTRATIONS

NOTE 5     SEGMENTS AND CONCENTRATIONS

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 results of operations for the three and nine months ended June 30, 2021 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 period presentation.

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

	For the Three Months Ended June 30,						For the Nine Months Ended June 30,
	2022			2021			2022			2021
Revenues:
OEM distribution	$	4,775,000		$	4,443,000		$	14,692,000		$	13,910,000
Retail distribution		878,000			1,277,000			2,919,000			1,898,000
Design		4,936,000			4,245,000			14,906,000			12,269,000
Total segment revenues	$	10,589,000		$	9,965,000		$	32,517,000		$	28,077,000
Operating income/(loss):
OEM distribution	$	179,000		$	361,000		$	1,002,000		$	1,080,000
Retail distribution		(397,000	)		(101,000	)		(981,000	)		(490,000	)
Design		447,000			392,000			1,422,000			281,000
Total segment operating income		229,000			652,000			1,443,000			871,000
General corporate expenses		(615,000	)		(384,000	)		(1,937,000	)		(1,586,000	)
Total (loss)/income from operations		(386,000	)		268,000			(494,000	)		(715,000	)
Other expense/(income), net		33,000			24,000			101,000			(1,323,000	)
(Loss)/income before income taxes	$	(419,000	)	$	244,000		$	(595,000	)	$	608,000
Depreciation and amortization:
OEM distribution	$	2,000		$	2,000		$	6,000		$	6,000
Design		75,000			78,000			228,000			246,000
Total depreciation and amortization	$	77,000		$	80,000		$	234,000		$	252,000

	June 30, 2022		September 30, 2021
Segment Assets:
OEM distribution	$	5,557,000	$	5,898,000
Retail distribution		4,966,000		2,178,000
Design		6,005,000		5,824,000
Total segment assets		16,528,000		13,900,000
General corporate assets		6,701,000		5,956,000
Total assets	$	23,229,000	$	19,856,000

The Company had certain customers in the OEM distribution segment whose individual percentage of the Company’s consolidated revenues was 10% or greater. Revenues from two customers or their affiliates or contract manufacturers represented 24.2% and 24.1%, respectively, of the Company’s consolidated net revenues for the three and nine months ended June 30, 2022. Revenues from one customer or its affiliates or contract manufacturers represented 13.7% of the Company’s consolidated net revenues for the three months ended June 30, 2021 and revenues from two customers or their affiliates or contract manufacturers represented 26.3% of the Company’s consolidated net revenues for the nine months ended June 30, 2021.

For the three and nine months ended June 30, 2022, the Company had one customer in the design segment whose individual percentage of the Company’s consolidated revenues was 10% or greater. Revenues from this customer represented 10.8% and 10.4%, respectively, of the Company’s consolidated net revenues for the three and nine months ended June 30, 2022. There were no customers in the design segment whose individual percentage of the Company’s consolidated revenues was 10% or greater during the three or nine months ended June 30, 2021.

At June 30, 2022 and September 30, 2021, the Company had customers in the OEM distribution segment whose accounts receivable balance accounted for 10% or more of the Company’s consolidated accounts receivable. Accounts receivable from three customers or their affiliates or contract manufacturers represented 40.4% and 44.0%, respectively, of the Company’s consolidated accounts receivable at June 30, 2022 and September 30, 2021.