Segments

ASC 280, Segment Reporting, defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

Beginning January 1, 2017, the Company’s operating segments consist of the Mid-Atlantic, Southeast, Texas, Intermountain and Western divisions after the Company realigned certain of its markets, which resulted in the consolidation of the Company’s historical Mountain West division into the Intermountain division. Following the realignment, the CODM continues to review aggregate information to allocate resources and assess performance. Based on this, as well as the similar economic characteristics, nature of products, distribution methods and customers of the divisions both before and after the realignment, the Company has aggregated its operating segments into one reportable segment, “Geographic divisions.”

In addition to our reportable segment, the Company’s consolidated results include “Other reconciling items.” Other reconciling items is comprised of our corporate activities and other income and expenses not allocated to the operating segments.

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total Company operations for the three months ended March 31, 2017 and 2016. Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance.



	Three Months Ended March 31, 2017
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	757,700	$	178,197	$	16,227	$	47,403
Other reconciling items	—		—		586		(13,840		)
	$	757,700	$	178,197	$	16,813



	Three Months Ended March 31, 2016
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	727,418	$	166,617	$	15,606	$	52,979
Other reconciling items	—		—		1,076		(19,270		)
	$	727,418	$	166,617	$	16,682

Reconciliation to consolidated financial statements:



	Three Months Ended March 31,
(in thousands)	2017		2016
Income (loss) before income taxes	$	4,717	$	(10,696	)
Interest expense	6,088		8,231
Depreciation and amortization	16,813		16,682
Merger and integration costs	4,441		2,836
Non-cash stock compensation expense	1,231		1,889
Acquisition costs	273		—
Impairment of assets	—		11,883
Inventory step-up charges	—		2,884
Adjusted EBITDA of other reconciling items	13,840		19,270
Adjusted EBITDA of geographic divisions reportable segment	$	47,403	$	52,979