7. The Company sold substantially all of the assets of its ready mix concrete and Daniels sand operations in the first quarter of 2019. See Note 15. During the second quarter of 2019, the Company acquired the assets of four operating businesses through three separate transactions. See Note 16 for additional discussion of the acquisitions. In conjunction with these transactions management reviewed its segment reporting structure and determined it was no longer appropriate for the consolidated business going forward. The segment reporting was revised to align with the way the Company’s decision makers evaluate, manage and allocates resources to the operating businesses after the sale of the concrete and aggregates assets of the Company’s wholly-owned subsidiaries (collectively referred to as TMC) and the acquisitions discussed below. Segment information for prior periods has been reclassified to conform to current segment reporting structure.

The Company operates primarily in the Building Products industry group. Within this industry group the Company has identified three reportable segments: the HVAC segment, the Door segment and the Construction Materials segment.

The HVAC segment produces and sells a variety of products including wall furnaces, fan coils, evaporative coolers, boiler room equipment and dryer boxes and related accessories from the Company’s wholly-owned subsidiaries, Williams Furnace Co. (WFC) of Colton, California, Phoenix Manufacturing, Inc. (PMI) of Phoenix, Arizona, Global Flow Products /American HVAC (GFP) of Broken Arrow, Oklahoma, and Inovate Dryer Technologies (Inovate) of Jupiter, Florida. Sales of this segment are nationwide although WFC and PMI sales are more concentrated in the southwestern United States. The Door segment sells hollow metal and wood doors, door frames and related hardware, sliding door systems and electronic access and security systems from the Company’s wholly-owned subsidiaries: McKinney Door and Hardware, Inc. (MDHI), Fastrac Building Supply (Fastrac) and Serenity Sliding Door Systems (Serenity), which operate out of facilities in Pueblo and Colorado Springs, Colorado. Sales of this segment are concentrated in Colorado, California and the Northwestern United States although door sales are also made throughout the United States. The Construction Materials segment offers aggregates and construction supplies from locations along the Southern Front Range of Colorado operated by the Company’s wholly-owned subsidiaries, Castle Aggregates and Castle Rebar & Supply of Colorado Springs, and TMOP Legacy Company (formerly Transit Mix of Pueblo, Inc.) of Pueblo, Colorado (the three companies collectively are referred to as the Castle Companies). During the quarter ended September 28, 2019 the Company determined to cease mining at its Pikeview aggregates quarry as continuing mining operations was no longer in the best interest of the consolidated portfolio. Accordingly, the Company recognized a $20,217,000 charge to record the reclamation liability associated with the property. The Company expects most of the reclamation to be completed by an outside party over approximately the next five years. See Note 19 for additional discussion.

In addition to the above reporting segments, an “Unallocated Corporate and Other” 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 classification also includes expenses related to a property held by the Company which are not material to the consolidated Company.

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, 2019 and September 29, 2018 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (amounts in thousands):




					Construction		Unallocated		Held for
	HVAC		Doors		Materials		Corporate		Sale		Total
Nine Months ended September 28, 2019
Revenues from external customers	$	57,712	$	17,483	$	4,579	$	0	$	—	$	79,773
Depreciation, depletion and amortization		842		199		276		54		—		1,369
Operating income (loss)		(837)		1,288		(15,105)		(6,295)		—		(20,949)
Segment assets		53,540		13,607		9,799		15,550		—		92,496
Capital expenditures		479		72		407		15		—		973
Three Months ended September 28, 2019
Revenues from external customers	$	23,702	$	6,787	$	1,515	$	(16)	$	—	$	31,987
Depreciation, depletion and amortization		320		111		142		26		—		597
Operating income (loss)		1,499		295		(28,288)		(1,412)		—		(27,906)
Segment assets		53,540		13,607		9,799		15,550		—		92,496
Capital expenditures (b)		286		(36)		275		—		—		525




					Construction		Unallocated		Held for
	HVAC		Doors		Materials		Corporate		Sale		Total
Nine Months ended September 29, 2018
Revenues from external customers	$	52,294	$	14,824	$	5,746	$	68	$	—	$	72,932
Depreciation, depletion and amortization		809		123		238		33		—		1,203
Operating income (loss)		83		1,787		(6,439)		(3,208)		—		(7,777)
Segment assets (a)		29,003		8,003		11,315		3,346		24,036		75,703
Capital expenditures		642		94		181		46		—		963
Three Months ended September 29, 2018
Revenues from external customers	$	17,163	$	4,746	$	2,021	$	35	$	—	$	23,965
Depreciation, depletion and amortization		268		41		74		10		—		393
Operating income (loss)		(511)		431		121		(1,309)		—		(1,268)
Segment assets (a)		29,003		8,003		11,315		3,346		24,036		75,703
Capital expenditures (b)		377		61		142		(5)		—		575

(a)

Segment assets are as of December 29, 2018.

(b)

Capital expenditures are presented on the accrual basis of accounting.