INDUSTRY SEGMENT INFORMATION

6 Months Ended

Jul. 02, 2016

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 primarily 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 primarily 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., of Colorado Springs and Transit Mix of Pueblo, Inc. of Pueblo, Colorado (the three companies collectively are referred to as TMC). The Door segment sells hollow metal and wood doors, door frames and related hardware, 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.

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, 2016 and July 4, 2015 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (amounts in thousands):

	Construction Products Industry						HVAC Industry
	Concrete,
	Aggregates &				Combined		Heating				Combined
	Construction				Construction		and		Evaporative		HVAC		Unallocated
	Supplies		Doors		Products		Cooling		Cooling		Products		Corporate		Total
Six Months Ended July 2, 2016
Revenues from external customers	$	33,111	$	8,745	$	41,856	$	17,785	$	17,299	$	35,084	$	9	$	76,949
Depreciation, depletion and amortization		704		63		767		277		238		515		8		1,290
Operating income (loss)		1,871		847		2,718		797		1,818		2,615		(1,651)		3,682
Segment assets		36,382		7,272		43,654		19,025		13,343		32,368		2,145		78,167
Capital expenditures		2,233		52		2,285		376		115		491		—		2,776
Three Months ended July 2, 2016
Revenues from external customers	$	20,912	$	4,890	$	25,802	$	6,635	$	10,279	$	16,914	$	5	$	42,721
Depreciation, depletion and amortization		357		32		389		139		119		258		4		651
Operating income (loss)		2,065		537		2,602		(237)		1,365		1,128		(900)		2,830
Segment assets		36,382		7,272		43,654		19,025		13,343		32,368		2,145		78,167
Capital expenditures		1,314		30		1,344		259		91		350		—		1,694

	Construction Products Industry						HVAC Industry
	Concrete,
	Aggregates &				Combined		Heating				Combined		Unallocated
	Construction				Construction		and		Evaporative		HVAC		Corporate
	Supplies		Doors		Products		Cooling		Cooling		Products		(a)		Total
Six Months Ended July 4, 2015
Revenues from external customers	$	24,655	$	8,869	$	33,524	$	15,020	$	16,998	$	32,018	$	8	$	65,550
Depreciation, depletion and amortization		677		63		740		285		246		531		26		1,297
Operating (loss) income		(856)		794		(62)		302		1,696		1,998		(1,524)		412
Segment assets (a)		31,791		6,471		38,262		22,628		12,730		35,358		2,135		75,755
Capital expenditures (b)		178		32		210		209		101		310		—		520
Three Months ended July 4, 2015
Revenues from external customers	$	14,090	$	4,681	$	18,771	$	5,874	$	10,216	$	16,090	$	4	$	34,865
Depreciation, depletion and amortization		340		32		372		143		123		266		13		651
Operating (loss) income		(128)		456		328		(195)		1,245		1,050		(747)		631
Segment assets (a)		31,791		6,471		38,262		22,628		12,730		35,358		2,135		75,755
Capital expenditures (b)		178		32		210		149		68		217		—		427

(a) Segment assets are as of January 2, 2016.

(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.