Segments

Segment information is presented in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting, which establishes standards for reporting information about operating segments. It also establishes standards for related disclosures about customers, products and geographic areas. Operating segments are defined as components of an enterprise that engage in business activities that earn revenues, incur expenses and prepare separate financial information that is evaluated regularly by the Company’s CODM in order to allocate resources and assess performance. Resources are allocated and performance is assessed by the CODM.

Based on the provisions of ASC 280, the Company has defined its operating segments by considering management structure and product offerings. This evaluation resulted in the following reportable segments:

•

Specialty Building Products ("SBP")—SBP distributes wallboard and accessories, metal framing, suspended ceiling systems and other products. Other products include stucco and exterior insulation and finish systems, as well as complementary offerings, such as tools, safety accessories and fasteners. The primary end markets served are new non-residential, new residential and non-residential repair and remodel construction markets.


•	Mechanical Insulation ("MI")—MI distributes and fabricates commercial and industrial insulation for pipes and mechanical systems and the primary end markets served are new non-residential construction, non-residential repair and remodel construction and industrial markets.

In addition to the two reportable segments, the Company’s consolidated results include corporate activities, which include depreciation and amortization.

For purposes of evaluation under these segment reporting principles, the CODM assesses the Company’s ongoing performance based on the periodic review of net sales and gross profit. The Company has not disclosed asset information by segment as its CODM does not use such information for purposes of allocating resources and assessing performance.

The following tables present net sales and gross profit for each reportable segment (in thousands):



	Three Months Ended March 31,
	2017					2016
	Net Sales			Gross Profit		Net Sales			Gross Profit
SBP	$	418,463		$	122,426	$	244,605		$	72,245
MI	60,994			17,485		—			—
Consolidated	$	479,457		$	139,911	$	244,605		$	72,245
Total gross profit	139,911					72,245
Total operating expenses	(131,458		)			(66,384		)
Interest expense	(15,249		)			(8,036		)
Other income, net	13,289					10
Income (loss) before income taxes	$	6,493				$	(2,165	)

Revenues are attributed to each country based on the location in which sales originate and in which assets are located. The following table provides information about the Company by geographic areas (in thousands):



	Three Months Ended March 31,
	2017		2016
United States	$	426,941	$	244,605
Canada	52,516		—
	$	479,457	$	244,605

The Company’s net sales from external customers by main product line are as follows (in thousands):



	Three Months Ended March 31,
	2017		2016
Wallboard and accessories	$	209,459	$	128,280
Metal framing	68,121		42,958
Suspended ceiling systems	72,534		26,216
Other products	83,126		47,151
Commercial and industrial insulation	46,217		—
Net sales	$	479,457	$	244,605