SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2011

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION

21. SEGMENT INFORMATION

The Company has determined that its reportable segments are those based on its method of internal reporting, which segregates its businesses by product category and production/distribution process.  Effective January 1, 2011, certain changes were made to the manner in which operating segment results are used by or provided to the chief operating decision makers of the Company, including: (1) certain costs related to wages, payroll taxes and incentive compensation that were previously reflected as unallocated corporate expenses are now being allocated to the Company's two operating segments; and (2) a majority of corporate incentive agreements (which include vendor rebate agreements) previously included in the corporate segment are now being allocated to the operating segments and reflected as a reduction of cost of goods sold.

Prior year results were reclassified to reflect the current year presentation.  In addition, certain segment information in the prior periods' consolidated financial statements has been reclassified to reflect sold businesses reported as discontinued operations.

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

Manufacturing - Utilizes various materials, such as lauan, MDF, gypsum, and particleboard, which are bonded by adhesives or a heating process to a number of products, including vinyl, paper, foil, and high-pressure laminate.  These products are utilized to produce furniture, shelving, wall, counter, and cabinet products with a wide variety of finishes and textures.  This segment also includes a cabinet door division, a vinyl printing division, the recently acquired solid surface fabrication operation (AIA) and the recently acquired exterior graphics division (Performance Graphics).  Patrick's major manufactured products also include wrapped profile mouldings, interior passage doors, and slotwall and slotwall components.  The Manufacturing segment contributed approximately 76%, 80% and 79% of the Company's net sales for the years ended December 31, 2011, 2010 and 2009, respectively.

Distribution - Distributes pre-finished wall and ceiling panels, drywall and drywall finishing products, electronics, wiring, electrical and plumbing products, cement siding, interior passage doors, roofing products, laminate flooring, shower doors, furniture, fireplace and slide-out surrounds and fascia, and other miscellaneous products.  The Distribution segment contributed approximately 24%, 20% and 21% of the Company's net sales for the years ended December 31, 2011, 2010 and 2009, respectively.

The Company sold certain assets and the business of its American Hardwoods operation in January 2009 and sold the building that housed this operation in June 2009.  Results relating to this operation, which were previously reported in the Distribution segment, were reclassified to discontinued operations for the period presented.

The Company sold certain assets and the business of its aluminum extrusion operation in July 2009.  Results relating to this operation, which comprised the entire EngineeredSolutions segment, were reclassified to discontinued operations for the period presented.

The accounting policies of the segments are the same as those described in Note 2, except that segment data includes intersegment sales.  Assets are identified to the segments with the exception of 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 as corporate division revenue.  The Company evaluates the performance of its segments and allocates resources to them based on a variety of indicators including sales, cost of goods sold, operating income and total identifiable assets.  In addition, certain significant items (the majority of which are non-cash in nature), are presented in the table below.

The table below presents information about the net income, segment assets, and certain other items that are either used by or provided to the chief operating decision makers of the Company as of and for the years ended December 31, 2011, 2010 and 2009 (in thousands):

2011
	Manufacturing		Distribution		Total
Net outside sales	$	232,460	$	75,362	$	307,822
Intersegment sales		11,800		360		12,160
Total sales		244,260		75,722		319,982
Cost of goods sold		210,797		63,636		274,433
Operating income		18,805		2,689		21,494
Identifiable assets		50,139		16,446		66,585
Depreciation and amortization		3,553		330		3,883

2010
	Manufacturing		Distribution		Total
Net outside sales	$	222,909	$	55,323	$	278,232
Intersegment sales		11,632		234		11,866
Total sales		234,541		55,557		290,098
Cost of goods sold		212,954		47,235		260,189
Operating income		7,873		1,364		9,237
Identifiable assets		39,414		13,587		53,001
Depreciation and amortization		3,618		199		3,817

2009
	Manufacturing		Distribution		Total
Net outside sales	$	168,710	$	43,812	$	212,522
Intersegment sales		8,726		9		8,735
Total sales		177,436		43,821		221,257
Cost of goods sold		160,894		37,834		198,728
Operating income		5,043		167		5,210
Identifiable assets		44,128		8,262		52,390
Depreciation and amortization		3,945		126		4,071

A reconciliation of certain line items pertaining to the total reportable segments to the consolidated financial statements as of and for the years ended December 31, 2011, 2010 and 2009 is as follows (in thousands):

	2011			2010			2009
Net sales:
Total sales for reportable segments	$	319,982		$	290,098		$	221,257
Elimination of intersegment sales		(12,160	)		(11,866	)		(8,735	)
Consolidated net sales	$	307,822		$	278,232		$	212,522
Cost of goods sold:
Total cost of goods sold for reportable segments	$	274,433		$	260,189		$	198,728
Elimination of intersegment cost of goods sold		(12,160	)		(11,866	)		(8,735	)
Consolidation reclassifications		(89	)		(175	)		(99	)
Corporate incentive agreements		(73	)		(269	)		(382	)
Other		1,403			715			131
Consolidated cost of goods sold	$	263,514		$	248,594		$	189,643
Operating income:
Operating income for reportable segments	$	21,494		$	9,237		$	5,210
Corporate incentive agreements		73			269			382
Gain on sale of fixed assets and acquisition of business		244			2,866			1,201
Unallocated corporate expenses		(7,507	)		(5,402	)		(5,093	)
Amortization		(829	)		(564	)		(353	)
Consolidated operating income	$	13,475		$	6,406		$	1,347

Consolidated total assets:
Identifiable assets for reportable segments	$	66,585	$	53,001	$	52,390
Corporate property and equipment		14,769		14,649		15,030
Current assets not allocated to segments		1,844		3,517		508
Intangibles and other assets not allocated to segments		2,572		3,650		4,558
Consolidation eliminations		-		-		(274	)
Assets held for sale		-		-		4,825
Consolidated total assets	$	85,770	$	74,817	$	77,037
Depreciation and amortization:
Depreciation and amortization for reportable segments	$	3,883	$	3,817	$	4,071
Corporate depreciation and amortization		1,033		1,153		1,200
Consolidated depreciation and amortization	$	4,916	$	4,970	$	5,271

Amortization expense related to intangible assets in the Manufacturing segment for the years ended December 31, 2011, 2010 and 2009 was $0.6 million, $0.5 million and $0.4 million, respectively.  Intangible assets amortization expense in the Distribution segment was $0.2 million and $61,000 in 2011 and 2010, respectively.  There was no amortization expense in the Distribution segment in 2009.

Corporate incentive agreements include vendor rebate agreements and are included as a reduction of cost of goods sold.  Unallocated corporate expenses include corporate general and administrative expenses comprised of wages, insurance, taxes, supplies, travel and entertainment, professional fees and other.  Beginning in January 2011, a majority of the corporate expenses were allocated to the business units within the Company's Manufacturing and Distribution segments in accordance with changes made to the Company's internal reporting structure.

Major Customers

The Company had one RV customer that accounted for approximately 34% and 29% of the trade receivables balance at December 31, 2011 and 2010, respectively.  This same customer accounted for approximately 32%, 27% and 21% of consolidated net sales for the years ended December 31, 2011, 2010 and 2009, respectively.  In addition, sales to a different RV customer accounted for approximately 17%, 18% and 14% of consolidated net sales in 2011, 2010 and 2009, respectively.   In addition, in 2009, sales to a MH customer accounted for approximately 12% of consolidated net sales of the Company.  There were no other customers that accounted for more than 10% of the trade receivables balance at December 31, 2011 and 2010.