Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company previously had two reportable segments, the recreational vehicle products segment (the “RV Segment”) and the manufactured housing products segment (the “MH Segment”). The Company has recently increased its focus on the significant opportunities in the aftermarket for its products, primarily sales to retail dealers, wholesale distributors and service centers. Additionally, over the past several years, sales of components for manufactured homes have become a smaller part of the Company’s business, largely due to the growth the Company has experienced with respect to its components sold to customers for traditional recreational vehicles as well as the expanded use of its components in other non-RV applications, which we refer to as adjacent industries. Unit growth for MH Segment products has also been lower over the last decade, primarily due to the real estate, credit and economic environment, including the availability of site built homes at stable prices and high interest rate spreads between conventional mortgages for site-built homes and loans for manufactured homes. In response to these changes in the Company’s business, subsequent to March 31, 2016, the Company modified its internal reporting structure, reflecting a change in how its chief operating decision maker (“CODM”) assesses the performance of the Company’s operating results and makes decisions about resource allocations. The Company’s new reportable segments are the OEM Segment and the Aftermarket Segment. Intersegment sales are insignificant.

The OEM Segment, which accounted for 92 percent, 93 percent and 95 percent of consolidated net sales for each of the years ended December 31, 2016, 2015 and 2014, respectively, manufactures or distributes a broad array of components for the leading OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; pontoon boats; trains; manufactured homes; and modular housing. Approximately 71 percent of the Company’s OEM Segment net sales in 2016 were of components for travel trailer and fifth-wheel RVs.

The Aftermarket Segment, which accounted for 8 percent, 7 percent and 5 percent of consolidated net sales for each of the years ended December 31, 2016, 2015 and 2014, respectively, supplies components to the related aftermarket channels of the RV and adjacent industries, primarily to retail dealers, wholesale distributors and service centers. The Aftermarket Segment also includes the sale of replacement glass and awnings to fulfill insurance claims.

Decisions concerning the allocation of the Company’s resources are made by the Company’s CODM, with oversight by the Board of Directors. The CODM 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 OEM and Aftermarket Segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements. The change in reported segments had no effect on the Company’s net income, total assets or liabilities, or stockholders’ equity.

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)	OEM		Aftermarket		Total		and Other			Total
2016
Net sales to external customers (a)	$	1,548,091	$	130,807	$	1,678,898	$	—		$	1,678,898
Operating profit (b)	180,850		20,000		200,850		—			200,850
Total assets (c)	569,385		65,211		634,596		152,308			786,904
Expenditures for long - lived assets (d)	80,588		6,014		86,602		—			86,602
Depreciation and amortization	$	42,593	$	3,298	$	45,891	$	276		$	46,167
2015
Net sales to external customers (a)	$	1,300,060	$	103,006	$	1,403,066	$	—		$	1,403,066
Operating profit (loss) (b)	105,224		14,746		119,970		(3,716		)	116,254
Total assets (c)	500,734		56,683		557,417		65,439			622,856
Expenditures for long - lived assets (d)	65,492		2,095		67,587		—			67,587
Depreciation and amortization	$	38,583	$	2,898	$	41,481	$	143		$	41,624
2014
Net sales to external customers (a)	$	1,127,026	$	63,756	$	1,190,782	$	—		$	1,190,782
Operating profit (loss) (b)	88,744		8,697		97,441		(1,954		)	95,487
Total assets (c)	441,127		54,489		495,616		48,225			543,841
Expenditures for long - lived assets (d)	119,715		27,655		147,370		—			147,370
Depreciation and amortization	$	30,954	$	1,554	$	32,508	$	88		$	32,596

(a) Thor Industries, Inc. (“Thor”), a customer of both segments, accounted for 37 percent, 28 percent and 33 percent of the Company’s consolidated net sales for the years ended December 31, 2016, 2015 and 2014, respectively. Berkshire Hathaway Inc. (through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 26 percent, 26 percent and 28 percent of the Company’s consolidated net sales for the years ended December 31, 2016, 2015 and 2014, respectively. Jayco, Inc., a customer of both segments, accounted for 10 percent of the Company’s consolidated net sales for the year ended December 31, 2015, this customer was subsequently acquired by Thor and is included in the Thor’s 2016 percentage above. No other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2016, 2015 and 2014. International sales, primarily in Europe and Australia, and export sales represented approximately 2 percent, 1 percent and 1 percent of consolidated net sales in 2016, 2015 and 2014, respectively.

(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 $42.0 million, $38.6 million and $105.0 million of long-lived assets, as part of the acquisitions of businesses in the years ended December 31, 2016, 2015 and 2014, respectively.

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

(In thousands)	2016		2015		2014
OEM Segment:
Chassis, chassis parts and slide-out mechanisms	$	743,160	$	664,542	$	593,756
Windows and doors	335,717		301,171		258,915
Furniture and mattresses	245,596		161,840		132,356
Axles and suspension solutions	115,538		108,464		88,909
Other	108,080		64,043		53,090
Total OEM Segment net sales	1,548,091		1,300,060		1,127,026
Total Aftermarket Segment net sales	130,807		103,006		63,756
Total net sales	$	1,678,898	$	1,403,066	$	1,190,782

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

(In thousands)	2016		2015		2014
Net sales:
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	1,099,882	$	938,787	$	841,497
Motorhomes	116,191		86,513		70,332
Adjacent industries OEMs	332,018		274,760		215,197
Total OEM Segment net sales	1,548,091		1,300,060		1,127,026
Aftermarket Segment:
Total Aftermarket Segment net sales	130,807		103,006		63,756
Total net sales	$	1,678,898	$	1,403,066	$	1,190,782