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 and six months ended June 30, 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 June 30, 2017
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	886,375	$	211,687	$	16,944	$	71,321
Other reconciling items	—		—		614		(11,744		)
	$	886,375	$	211,687	$	17,558



	Three Months Ended June 30, 2016
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	797,547	$	191,655	$	15,945	$	67,717
Other reconciling items	—		—		1,194		(10,183		)
	$	797,547	$	191,655	$	17,139



	Six Months Ended June 30, 2017
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	1,644,075	$	389,884	$	33,171	$	118,724
Other reconciling items	—		—		1,200		(25,584		)
	$	1,644,075	$	389,884	$	34,371



	Six Months Ended June 30, 2016
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	1,524,965	$	358,272	$	31,551	$	120,696
Other reconciling items	—		—		2,270		(29,453		)
	$	1,524,965	$	358,272	$	33,821

Reconciliation to consolidated financial statements:



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2017		2016		2017		2016
Income before income taxes	$	26,976	$	26,873	$	31,693	$	16,177
Interest expense	6,495		8,121		12,583		16,352
Depreciation and amortization	17,558		17,139		34,371		33,821
Merger and integration costs	6,324		3,597		10,765		6,433
Non-cash stock compensation expense	2,154		1,804		3,385		3,693
Acquisition costs	44		—		317		—
Impairment of assets	26		—		26		11,883
Inventory step-up charges	—		—		—		2,884
Adjusted EBITDA of other reconciling items	11,744		10,183		25,584		29,453
Adjusted EBITDA of geographic divisions reportable segment	$	71,321	$	67,717	$	118,724	$	120,696