INDUSTRY SEGMENT INFORMATION

6 Months Ended

Jul. 02, 2011

INDUSTRY SEGMENT INFORMATION

INDUSTRY SEGMENT INFORMATION

7.The Company operates primarily in two industry groups, Heating, Ventilation and Air Conditioning (HVAC) and Construction Products. Within each of these two industry groups, the Company has identified two reportable segments: the Heating and Cooling segment and the Evaporative Cooling segment in the HVAC industry group and the CACS segment and the Door segment in the Construction Products industry group.

The Heating and Cooling segment produces and sells gas-fired wall furnaces, console heaters and fan coils from the Company’s wholly-owned subsidiary, Williams Furnace Co. of Colton, California (WFC). The Evaporative Cooling segment produces and sells evaporative coolers from the Company’s wholly-owned subsidiary, Phoenix Manufacturing, Inc. of Phoenix, Arizona (PMI). Sales of these two segments are nationwide, but are concentrated in the southwestern United States. Concrete, Aggregates and Construction Supplies are offered from numerous locations along the Southern Front Range of Colorado operated by the Company’s wholly-owned subsidiaries collectively referred to as Transit Mix Concrete Co. (TMC). Doors are fabricated and sold along with the related hardware from Colorado Springs and Pueblo, Colorado through the Company’s wholly-owned subsidiary, McKinney Door and Hardware, Inc. of Pueblo, Colorado (MDHI). Sales of these two segments are highly concentrated in the Southern Front Range area in Colorado although door sales are also made throughout the United States.

In addition to the above reporting segments, an “Unallocated Corporate” classification is used to report the unallocated expenses of the corporate office which provides treasury, insurance and tax services as well as strategic business planning and general management services, and an “Other” classification is used to report a real estate operation and the activity of the new business venture discussed in Note 9. The Company purchased the residence of and made a loan to an executive of one of the Company’s subsidiaries in connection with his relocation.  The residence is classified as an asset held for resale.  The residence and the loan receivable are included in the assets of the “Other” classification.  The loan is secured by marketable securities and bears interest at 5%.  Expenses related to the corporate information technology group are allocated to all locations, including the corporate office.

The Company evaluates the performance of its segments and allocates resources to them based on a number of criteria including operating income, return on investment and other strategic objectives. Operating income is determined by deducting operating expenses from all revenues. In computing operating income, none of the following has been added or deducted: unallocated corporate expenses, interest, other income or loss or income taxes.

The following table presents information about reported segments for the six-month and three-month periods ended July 2, 2011 and July 3, 2010 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (amounts in thousands):

	Construction Products									HVAC Products
	Concrete,
	Aggregates & Construction Supplies			Doors			Combined Construction Products			Heating and Cooling			Evaporative Cooling			Combined HVAC Products			Unallocated Corporate			Other			Total
2011
Six Months ended July 2, 2011
Revenues from external customers	$	16,453		$	6,003		$	22,456		$	14,506		$	15,603		$	30,109		$	6		$	172		$	52,743
Depreciation, depletion and amortization	1,646			67			1,713			209			225			434			34			—			2,181
Operating (loss) income	(2,721		)	485			(2,236		)	164			1,917			2,081			(1,296		)	(87		)	(1,538		)
Segment assets	35,100			6,182			41,282			17,157			12,906			30,063			5,772			1,144			78,261
Capital expenditures (b)	(480		)	(56		)	(536		)	(70		)	(138		)	(208		)	(14		)	—			(758		)
Quarter ended July 2, 2011
Revenues from external customers	$	9,099		$	2,890		$	11,989		$	6,111		$	9,786		$	15,897		$	3		$	86		$	27,975
Depreciation, depletion and amortization	821			34			855			104			112			216			18			—			1,089
Operating (loss) income	(1,046		)	285			(761		)	88			1,436			1,524			(609		)	(71		)	83
Segment assets	35,100			6,182			41,282			17,157			12,906			30,063			5,772			1,144			78,261
Capital expenditures (b)	(283		)	(43		)	(326		)	(44		)	(53		)	(97		)	(9		)	—			(432		)

	Construction Products								HVAC Products
	Concrete,
	Aggregates & Construction Supplies			Doors		Combined Construction Products			Heating and Cooling			Evaporative Cooling		Combined HVAC Products		Unallocated Corporate			Other		Total
2010
Six Months ended July 3, 2010
Revenues from external customers	$	18,517		$	6,740	$	25,257		$	15,901		$	14,054	$	29,955	$	7		$	172	$	55,391
Depreciation, depletion and amortization	1,735			72		1,807			196			230		426		32			—		2,265
Operating (loss) income	(985		)	524		(461		)	(387		)	1,600		1,213		(1,349		)	54		(543		)
Segment assets (a)	36,761			5,528		42,289			18,976			11,876		30,852		6,357			63		79,561
Capital expenditures (b)	384			9		393			122			30		152		—			—		545
Quarter ended July 3, 2010
Revenues from external customers	$	11,789		$	3,112	$	14,901		$	7,081		$	9,678	$	16,759	$	4		$	86	$	31,750
Depreciation, depletion and amortization	894			38		932			98			115		213		16			—		1,161
Operating (loss) income	628			180		808			(84		)	1,450		1,366		(704		)	27		1,497
Segment assets (a)	36,761			5,528		42,289			18,976			11,876		30,852		6,357			63		79,561
Capital expenditures (b)	379			9		388			91			25		116		—			—		504

(a)       Segment assets are as of January 1, 2011.

(b)       Capital expenditures are presented on the accrual basis of accounting.

There are no differences in the basis of segmentation or in the basis of measurement of segment profit or loss from the last Annual Report on Form 10-K.