Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company has two reportable segments: the recreational vehicle products segment (the “RV Segment”) and the manufactured housing products segment (the “MH Segment”). Intersegment sales are insignificant.

The RV Segment, which accounted for 92 percent, 90 percent, and 88 percent of consolidated net sales for the years ended December 31, 2015, 2014 and 2013 respectively, manufactures or distributes a variety of products used in the production of RVs, including:

● Steel chassis for towable RVs	● Furniture and mattresses
● Axles and suspension solutions for towable RVs	● Entry, luggage, patio and ramp doors
● Slide-out mechanisms and solutions	● Electric and manual entry steps
● Thermoformed bath, kitchen and other products	● Awnings and awning accessories
● Windows	● Electronic components
● Manual, electric and hydraulic stabilizer and     leveling systems	● LED televisions, sound systems, navigation     systems and wireless backup cameras
● Chassis components	● Other accessories

The Company also supplies certain of these products to the RV aftermarket, and to adjacent industries, including buses and trailers used to haul boats, livestock, equipment and other cargo, and pontoon boats. Approximately 73 percent of the Company’s RV Segment net sales in 2015 were of products to original equipment manufacturers (“OEMs”) of travel trailer and fifth-wheel RVs.

The MH Segment, which accounted for 8 percent, 10 percent and 12 percent of consolidated net sales for the years ended December 31, 2015, 2014 and 2013, respectively, manufactures or distributes a variety of products used in the production of manufactured homes, including:

●Vinyl and aluminum windows	●Aluminum and vinyl patio doors
●Thermoformed bath and kitchen products	●Steel chassis and related components
●Steel and fiberglass entry doors	●Axles

The Company also supplies certain of these products to the manufactured housing aftermarket, and to adjacent industries, including modular housing and mobile office units. Certain of the Company’s MH Segment customers manufacture both manufactured homes and modular homes, and certain of the products manufactured by the Company are suitable for both types of homes. As a result, the Company is not always able to determine in which type of home its products are installed.

Decisions concerning the allocation of the Company’s resources are made by the Company’s key executives, with oversight by the Board of Directors. This group evaluates the performance of each segment based upon segment operating profit or loss, generally defined as income or loss before interest and income taxes. Decisions concerning the allocation of resources are also based on each segment’s utilization of assets. Management of debt is a corporate function. The accounting policies of the RV and MH Segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements.

Corporate expenses are allocated between the segments based upon net sales. Accretion related to contingent consideration and other non-segment items are included in the segment to which they relate.

Information relating to segments follows for the years ended December 31:

	Segments						Corporate
(In thousands)	RV		MH		Total		and Other			Total
2015
Net sales to external customers (a)	$	1,284,928	$	118,138	$	1,403,066	$	—		$	1,403,066
Operating profit (loss) (b)	$	107,485	$	12,485	$	119,970	$	(3,716	)	$	116,254
Total assets (c)	$	519,795	$	27,702	$	547,497	$	75,449		$	622,946
Expenditures for long - lived assets (d)	$	30,126	$	1,193	$	31,319	$	—		$	31,319
Depreciation and amortization	$	39,065	$	2,412	$	41,477	$	147		$	41,624

	Segments						Corporate
(In thousands)	RV		MH		Total		and Other			Total
2014
Net sales to external customers (a)	$	1,074,448	$	116,334	$	1,190,782	$	—		$	1,190,782
Operating profit (loss) (b)	$	86,571	$	10,870	$	97,441	$	(1,954	)	$	95,487
Total assets (c)	$	451,264	$	29,482	$	480,746	$	63,095		$	543,841
Expenditures for long - lived assets (d)	$	145,406	$	2,039	$	147,445	$	—		$	147,445
Depreciation and amortization	$	29,933	$	2,568	$	32,501	$	95		$	32,596
2013
Net sales to external customers (a)	$	893,694	$	121,882	$	1,015,576	$	—		$	1,015,576
Operating profit (loss) (b)	$	68,248	$	11,926	$	80,174	$	(1,876	)	$	78,298
Total assets (c)	$	306,139	$	32,948	$	339,087	$	114,097		$	453,184
Expenditures for long - lived assets (d)	$	34,989	$	2,682	$	37,671	$	—		$	37,671
Depreciation and amortization	$	24,615	$	2,806	$	27,421	$	79		$	27,500

(a) Thor Industries, Inc., a customer of the RV Segment, accounted for 29 percent, 33 percent and 34 percent of the Company’s consolidated net sales for the years ended December 31, 2015, 2014 and 2013, respectively. Berkshire Hathaway Inc. (through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 26 percent, 28 percent and 28 percent of the Company’s consolidated net sales for the years ended December 31, 2015, 2014 and 2013, respectively. Jayco, Inc., a customer of the RV Segment, accounted for 10 percent of the Company's consolidated net sales for the year ended December 31, 2015. No other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2015, 2014 and 2013.

(b) Certain general and administrative expenses are allocated between the segments based upon net sales or operating profit, depending upon the nature of the expense.

(c) Segment assets include accounts receivable, inventories, fixed assets, goodwill and other intangible assets. Corporate and other assets include cash and cash equivalents, prepaid expenses and other current assets, deferred taxes, and other assets.

(d) Expenditures for long-lived assets include capital expenditures, as well as fixed assets, goodwill and other intangible assets purchased as part of the acquisition of businesses. The Company purchased $38.6 million, $105.0 million and $4.8 million of long-lived assets, as part of the acquisitions of businesses in the years ended December 31, 2015, 2014 and 2013, respectively.

Net sales by product were as follows for the years ended December 31:

(In thousands)	2015		2014		2013
RV Segment:
Chassis, chassis parts and slide-out mechanisms	$	638,261	$	564,543	$	493,244
Windows and doors	245,016		204,054		181,934
Furniture and mattresses	163,380		133,371		100,196
Axles and suspension solutions	114,531		92,261		69,818
Other	123,740		80,219		48,502
Total RV Segment net sales	$	1,284,928	$	1,074,448	$	893,694
MH Segment:
Windows and doors	$	73,035	$	66,140	$	67,029
Chassis and chassis parts	29,798		33,842		38,359
Other	15,305		16,352		16,494
Total MH Segment net sales	$	118,138	$	116,334	$	121,882
Total net sales	$	1,403,066	$	1,190,782	$	1,015,576

The composition of net sales was as follows for the years ended December 31:

(In thousands)	2015		2014		2013
Net sales:
RV Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	938,787	$	841,497	$	727,783
Motorhomes	86,513		70,332		47,937
RV aftermarket	87,447		49,570		25,334
Adjacent industries	172,181		113,049		92,640
Total RV Segment net sales	$	1,284,928	$	1,074,448	$	893,694
MH Segment:
Manufactured housing OEMs	$	82,032	$	77,421	$	80,245
Manufactured housing aftermarket	15,559		14,186		13,719
Adjacent industries	20,547		24,727		27,918
Total MH Segment net sales	$	118,138	$	116,334	$	121,882
Total net sales	$	1,403,066	$	1,190,782	$	1,015,576

In the third quarter of 2015, the Company refined its methodology for categorizing sales within the RV Segment. This change improves accuracy, but has no impact on total RV Segment net sales or trends. Prior periods have been reclassified to conform to this presentation.

Potential Future Changes to Reporting Segments

Over the past several years, largely due to the growth the Company has experienced in its RV Segment, the MH Segment is now a smaller part of the Company. Net sales to manufactured housing OEMs are 6 percent of consolidated net sales for the year ending December 31, 2015. In addition, the Company has recently increased its focus on the significant opportunities in the aftermarket. The Company continues to evaluate the information provided to its Chief Operating Decision Maker (“CODM”), and assess how changes to its reporting structures would be used by the CODM to assess the performance of the Company’s operating segments and make decisions about resource allocations. Any such changes could necessitate a revision to the operating segments the Company reports.