Segment Reporting

12 Months Ended

Dec. 31, 2018

SEGMENT REPORTING

The Company has two reportable segments, the OEM Segment and the Aftermarket Segment. Intersegment sales are insignificant.

The OEM Segment, which accounted for 91 percent, 92 percent and 92 percent of consolidated net sales for each of the years ended December 31, 2018, 2017 and 2016, respectively, manufactures and distributes a broad array of engineered components for the leading OEMs in the recreation and industrial product markets, consisting of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; boats; trains; manufactured homes; and modular housing. Approximately 64 percent of the Company’s OEM Segment net sales in 2018 were of components for travel trailer and fifth-wheel RVs.

The Aftermarket Segment, which accounted for 9 percent, 8 percent and 8 percent of consolidated net sales for each of the years ended December 31, 2018, 2017 and 2016, respectively, supplies engineered 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 Chief Operating Decision Maker (“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 2 of the Notes to Consolidated Financial Statements.

The following tables presents the Company’s revenues disaggregated by segment and geography based on the billing address of the Company’s customers for the years ended December 31:


			2018
(In thousands)	U.S. (a)		Int’l (b)		Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	1,431,574	$	9,156	$	1,440,730
Motorhomes	143,488		43,809		187,297
Adjacent industries OEMs	574,100		40,489		614,589
Total OEM Segment net sales	2,149,162		93,454		2,242,616
Aftermarket Segment:
Total Aftermarket Segment net sales	222,588		10,603		233,191
Total net sales	$	2,371,750	$	104,057	$	2,475,807


			2017
(In thousands)	U.S. (a)		Int’l (b)		Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	1,403,079	$	2,904	$	1,405,983
Motorhomes	138,895		20,522		159,417
Adjacent industries OEMs	398,919		12,304		411,223
Total OEM Segment net sales	1,940,893		35,730		1,976,623
Aftermarket Segment:
Total Aftermarket Segment net sales	160,637		10,510		171,147
Total net sales	$	2,101,530	$	46,240	$	2,147,770


			2016
(In thousands)	U.S. (a)		Int’l (b)		Total
OEM Segment:
RV OEMs:
Travel trailers and fifth-wheels	$	1,097,385	$	2,497	$	1,099,882
Motorhomes	108,961		7,230		116,191
Adjacent industries OEMs	325,550		6,468		332,018
Total OEM Segment net sales	1,531,896		16,195		1,548,091
Aftermarket Segment:
Total Aftermarket Segment net sales	124,733		6,074		130,807
Total net sales	$	1,656,629	$	22,269	$	1,678,898

^(a)Net sales to customers in the United States of America

^(b)Net sales to customers domiciled in countries outside of the United States of America

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		Subtotal		and Other		Total
2018
Net sales to external customers ^(a)	$	2,242,616	$	233,191	$	2,475,807	$	—	$	2,475,807
Operating profit ^(b)	167,459		31,329		198,788		—		198,788
Total assets ^(c)	1,034,254		129,776		1,164,030		79,863		1,243,893
Expenditures for long-lived assets ^(d)	247,895		20,544		268,439		—		268,439
Depreciation and amortization	63,447		4,079		67,526		—		67,526

2017
Net sales to external customers ^(a)	$	1,976,623	$	171,147	$	2,147,770	$	—	$	2,147,770
Operating profit ^(b)	190,276		24,005		214,281		—		214,281
Total assets ^(c)	785,926		76,309		862,235		83,623		945,858
Expenditures for long-lived assets ^(d)	148,570		4,875		153,445		—		153,445
Depreciation and amortization	50,751		3,662		54,413		314		54,727

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

(a) Thor Industries, Inc. (“Thor”), a customer of both segments, accounted for 31 percent, 38 percent and 37 percent of the Company’s consolidated net sales for the years ended December 31, 2018, 2017 and 2016, respectively. Berkshire Hathaway Inc. (through its subsidiaries Forest River, Inc. and Clayton Homes, Inc.), a customer of both segments, accounted for 23 percent, 25 percent and 26 percent of the Company’s consolidated net sales for the years ended December 31, 2018, 2017 and 2016, respectively. No other customer accounted for more than 10 percent of consolidated net sales in the years ended December 31, 2018, 2017 and 2016.

(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 $150.9 million, $65.0 million and $42.0 million of long-lived assets, as part of the acquisitions of businesses in the years ended December 31, 2018, 2017 and 2016, respectively.

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


(In thousands)	2018		2017		2016
OEM Segment:
Chassis, chassis parts and slide-out mechanisms	$	908,065	$	914,397	$	743,160
Windows and doors	615,644		424,625		335,717
Furniture and mattresses	380,514		342,680		245,596
Axles and suspension solutions	122,897		123,513		115,538
Other	215,496		171,408		108,080
Total OEM Segment net sales	2,242,616		1,976,623		1,548,091
Total Aftermarket Segment net sales	233,191		171,147		130,807
Total net sales	$	2,475,807	$	2,147,770	$	1,678,898