INDUSTRY SEGMENT INFORMATION

9 Months Ended

Sep. 28, 2013

INDUSTRY SEGMENT INFORMATION

INDUSTRY SEGMENT INFORMATION

7. The Company operates primarily in two industry groups, Heating, Ventilation and Air Conditioning (HVAC) and Construction Products. The Company has identified two reportable segments within each of the industry groups: 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. (WFC) of Colton, California. The Evaporative Cooling segment produces and sells evaporative coolers from the Company’s wholly-owned subsidiary, Phoenix Manufacturing, Inc. (PMI) of Phoenix, Arizona. 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 Castle Concrete Company and Transit Mix Concrete Co., both located in Colorado Springs, Colorado and Transit Mix of Pueblo, Inc. of Pueblo, Colorado (the three companies collectively are referred to as “TMC”). The Door segment sells hollow metal doors, door frames and related hardware, wood doors, lavatory fixtures and electronic access and security systems from the Company’s wholly-owned subsidiary, McKinney Door and Hardware, Inc. (MDHI) which operates out of facilities in Pueblo and Colorado Springs, Colorado. Sales of these two segments are highly concentrated in the Southern Front Range of 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 Williams EcoLogix, Inc. (WEI). WEI is a wholly owned subsidiary of Continental Materials Corporation which was set up in anticipation of distributing a product that was being developed by a third party. Development of the product has ceased and the sole employee was terminated in February 2013. WEI is currently dormant and the Company does not expect to incur any additional significant expenses related to this subsidiary.

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 September 28, 2013 and September 29, 2012 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (dollar 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
2013
Nine Months ended September 28, 2013
Revenues from external customers	$	31,395		$	12,117	$	43,512		$	21,965	$	22,419	$	44,384	$	10		$	29		$	87,935
Depreciation, depletion and amortization	1,616			93		1,709			309		269		578		41			—			2,328
Operating (loss) income	(2,829		)	992		(1,837		)	1,297		2,418		3,715		(2,184		)	(790		)	(1,096		)
Segment assets	32,216			6,660		38,876			17,937		11,209		29,146		2,353			—			70,375
Capital expenditures (b)	939			57		996			520		477		997		6			—			1,999
Three Months ended September 28, 2013
Revenues from external customers	$	11,801		$	3,991	$	15,792		$	6,876	$	6,193	$	13,069	$	4		$	—		$	28,865
Depreciation, depletion and amortization	431			31		462			103		90		193		14			—			669
Operating income (loss)	(707		)	382		(325		)	83		575		658		(654		)	(16		)	(337		)
Segment assets	32,216			6,660		38,876			17,937		11,209		29,146		2,353			—			70,375
Capital expenditures (b)	792			18		810			136		237		373		—			—			1,183

	Construction Products								HVAC Products
	Concrete,
	Aggregates & Construction Supplies			Doors		Combined Construction Products			Heating and Cooling		Evaporative Cooling		Combined HVAC Products		Unallocated Corporate			Other			Total
2012
Nine Months ended September  29, 2012
Revenues from external customers	$	29,332		$	9,535	$	38,867		$	22,545	$	21,628	$	44,173	$	11		$	258		$	83,309
Depreciation, depletion and amortization	2,169			100		2,269			316		282		598		71			—			2,938
Operating (loss) income	(3,208		)	427		(2,781		)	466		2,101		2,567		(1,928		)	(187		)	(2,329		)
Segment assets (a)	31,629			5,767		37,396			17,054		12,250		29,304		3,839			1,006			71,545
Capital expenditures (b)	697			26		723			330		425		755		9			—			1,487
Three Months ended September  29, 2012
Revenues from external customers	$	12,659		$	3,083	$	15,742		$	7,672	$	5,662	$	13,334	$	4		$	86		$	29,166
Depreciation, depletion and amortization	579			33		612			108		97		205		8			—			825
Operating (loss) income	(187		)	88		(99		)	258		394		652		(672		)	(46		)	(165		)
Segment assets (a)	31,629			5,767		37,396			17,054		12,250		29,304		3,839			1,006			71,545
Capital expenditures (b)	500			9		509			135		206		341		3			—			853

(a) Segment assets are as of December 29, 2012.

(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 2012 Form 10-K.