INDUSTRY SEGMENT INFORMATION

9 Months Ended

Oct. 01, 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 (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. Expenses related to the corporate information technology group are allocated to all locations, including the corporate office. 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%.

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 nine-month and three-month periods ended October 1, 2011 and October 2, 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
Nine Months ended October 1, 2011
Net sales to external customers	$	24,719		$	9,164	$	33,883		$	22,920	$	21,173	$	44,093	$	10		$	258		$	78,244
Depreciation, depletion and amortization	2,452			103		2,555			314		273		587		51			—			3,193
Operating (loss) income	(3,500		)	556		(2,944		)	750		2,290		3,040		(1,837		)	(160		)	(1,901		)
Segment assets	33,568			6,224		39,792			19,411		10,094		29,505		5,838			1,140			76,275
Capital expenditures (b)	932			60		992			99		150		249		17			—			1,258
Quarter ended October 1, 2011
Net sales to external customers	$	8,266		$	3,161	$	11,427		$	8,414	$	5,570	$	13,984	$	4		$	86		$	25,501
Depreciation, depletion and amortization	806			36		842			105		48		153		17			—			1,012
Operating income (loss)	(780		)	72		(708		)	586		373		959		(541		)	(73		)	(363		)
Segment assets	33,568			6,224		39,792			19,411		10,094		29,505		5,838			1,140			76,275
Capital expenditures (b)	452			4		456			29		12		41		3			—			500

	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
Nine Months ended October 2, 2010
Net sales to external customers	$	29,008		$	9,765	$	38,773	$	25,647	$	19,846	$	45,493	$	9		$	258	$	84,533
Depreciation, depletion and amortization	2,571			108		2,679		294		345		639		49			—		3,367
Operating (loss) income	(514		)	594		80		310		2,069		2,379		(1,996		)	81		544
Segment assets (a)	36,761			5,528		42,289		18,976		11,876		30,852		6,357			63		79,561
Capital expenditures (b)	425			14		439		181		64		245		3			—		687
Quarter ended October 2, 2010
Net sales to external customers	$	10,491		$	3,025	$	13,516	$	9,746	$	5,792	$	15,538	$	2		$	86	$	29,142
Depreciation, depletion and amortization	836			36		872		98		115		213		17			—		1,102
Operating income (loss)	471			66		537		651		469		1,120		(647		)	27		1,037
Segment assets (a)	36,761			5,528		42,289		18,976		11,876		30,852		6,357			63		79,561
Capital expenditures (b)	46			5		51		90		39		129		3			—		183

(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.