SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2019

The Company has two reportable segments, Manufacturing and Distribution, which are based on its method of internal reporting, which segregates its businesses based on the way in which its chief operating decision maker allocates resources, evaluates financial results, and determines compensation.

A description of the Company’s reportable segments is as follows:

Manufacturing – This segment includes the following products: laminated products that are utilized to produce furniture, shelving, walls, countertops and cabinet products; cabinet doors; fiberglass bath fixtures and tile systems; hardwood furniture; vinyl printing; decorative vinyl and paper laminated panels; solid surface, granite, and quartz countertop fabrication; RV painting; fabricated aluminum products; fiberglass and plastic components; fiberglass bath fixtures and tile systems; softwoods lumber; custom cabinetry; polymer-based flooring; electrical systems components including instrument and dash panels; wrapped vinyl, paper and hardwood profile mouldings; interior passage doors; air handling products; slide-out trim and fascia; thermoformed shower surrounds; specialty bath and closet building products; fiberglass and plastic helm systems and components products; wiring and wire harnesses; boat covers, towers, tops and frames; marine hardware; aluminum fuel tanks; CNC molds and composite parts; slotwall panels and components; and other products.

Distribution – The Company distributes pre-finished wall and ceiling panels; drywall and drywall finishing products; electronics and audio systems components; appliances; wiring, electrical and plumbing products; fiber reinforced polyester products; cement siding; raw and processed lumber; interior passage doors; roofing products; laminate and ceramic flooring; tile; shower doors; furniture; fireplaces and surrounds; interior and exterior lighting products; and other miscellaneous products in addition to providing transportation and logistics services.

The accounting policies of the segments are the same as those described in Note 1, except that segment data includes intersegment sales. Assets are identified to the segments except for cash, prepaid expenses, land and buildings, and certain deferred assets, which are identified with the corporate division. The corporate division charges rents to the segments for use of the land and buildings based upon estimated market rates. The Company accounts for intersegment sales similar to third party transactions, which reflect current market prices. The Company also records certain income from purchase incentive agreements at the corporate division. The Company evaluates the performance of its segments and allocates resources to them based on a variety of indicators including but not limited to sales and operating income as presented in the tables below.

The tables below present information that is provided to the chief operating decision maker of the Company as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 (in thousands):



2019
	Manufacturing		Distribution		Total
Net outside sales	$	1,642,263	$	694,819	$	2,337,082
Intersegment sales	31,223		4,340		35,563
Total sales	1,673,486		699,159		2,372,645
Operating income	174,913		38,953		213,866
Total assets	990,692		304,230		1,294,922
Capital expenditures	25,291		1,973		27,264
Depreciation and amortization	52,036		7,534		59,570



2018
	Manufacturing		Distribution		Total
Net outside sales	$	1,745,467	$	517,594	$	2,263,061
Intersegment sales	33,581		3,641		37,222
Total sales	1,779,048		521,235		2,300,283
Operating income	215,246		31,491		246,737
Total assets	948,557		240,499		1,189,056
Capital expenditures	31,152		1,852		33,004
Depreciation and amortization	44,747		7,613		52,360



2017
	Manufacturing		Distribution		Total
Net outside sales	$	1,337,785	$	297,868	$	1,635,653
Intersegment sales	30,669		2,579		33,248
Total sales	1,368,454		300,447		1,668,901
Operating income	151,635		18,858		170,493
Capital expenditures	21,204		309		21,513
Depreciation and amortization	27,481		3,521		31,002

A reconciliation of certain line items pertaining to the total reportable segments to the consolidated financial statements as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 is as follows (in thousands):



	2019			2018			2017
Net sales:
Total sales for reportable segments	$	2,372,645		$	2,300,283		$	1,668,901
Elimination of intersegment sales	(35,563		)	(37,222		)	(33,248		)
Consolidated net sales	$	2,337,082		$	2,263,061		$	1,635,653

Operating income:
Operating income for reportable segments	$	213,866		$	246,737		$	170,493
Unallocated corporate expenses	(23,516		)	(34,109		)	(29,219		)
Amortization	(35,908		)	(34,213		)	(19,374		)
Consolidated operating income	$	154,442		$	178,415		$	121,900

Total assets:
Identifiable assets for reportable segments	$	1,294,922		$	1,189,056
Corporate assets unallocated to segments	36,681			35,280
Cash and cash equivalents	139,390			6,895
Consolidated total assets	$	1,470,993		$	1,231,231

Depreciation and amortization:
Depreciation and amortization for reportable segments	$	59,570		$	52,360		$	31,002
Corporate depreciation and amortization	3,225			2,692			2,539
Consolidated depreciation and amortization	$	62,795		$	55,052		$	33,541

Capital expenditures:
Capital expenditures for reportable segments	$	27,264		$	33,004		$	21,513
Corporate capital expenditures	397			1,482			984
Consolidated capital expenditures	$	27,661		$	34,486		$	22,497

Amortization expense related to intangible assets in the Manufacturing segment for the years ended December 31, 2019, 2018 and 2017 was $29.5 million, $27.4 million and $16.2 million, respectively. Intangible assets amortization expense in the Distribution segment was $6.4 million, $6.8 million and $3.1 million in 2019, 2018 and 2017, respectively.

Unallocated corporate expenses include corporate general and administrative expenses comprised of wages, insurance, taxes, supplies, travel and entertainment, professional fees and other.

Major Customers

One RV customer accounted for approximately 14% and 12% of the trade receivables balance at December 31, 2019 and 2018, respectively. In addition, a second RV customer accounted for approximately 13% of the trade receivables balance at December 31, 2018.

One RV customer accounted for approximately 23%, 29% and 32% of consolidated net sales in 2019, 2018 and 2017, respectively. In addition, a second RV customer accounted for approximately 17%, 20% and 25% of consolidated net sales in 2019, 2018 and 2017, respectively.