OPERATING SEGMENTS

Prior to the EBGL Acquisition in October 2016, the Company’s operating results reflected the operating results of KBS, along with certain corporate overhead and corporate borrowing activity. Since the October 2016 EBGL Acquisition, the Company manages and organizes its business in two distinct reportable segments: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations. The modular building manufacturing segment, through KBS, manufactures modular buildings for both single-family residential homes and larger, commercial building projects. The structural wall panel and wood foundation manufacturing segment (which also includes the building supply retail operations), manufactures structural wall panels for both residential and commercial projects as well as permanent wood foundation systems for residential homes, through the EdgeBuilder subsidiary, in addition to operating a local building supply retail operation through the Glenbrook subsidiary. The Company also has corporate level activities and expenditures which are not considered a reportable segment.

Each segments’ accounting policies are the same as those described in the summary of significant accounting policies (Note 3). There are no intersegment sales.

The Company’s reportable business segments are strategic business units that offer different products and services. Each segment is managed separately because they have different manufacturing processes and market to different customer bases, in geographically different markets.

The following table presents certain financial information regarding each reportable segment (in thousands):



	Modular Home Manufacturing						Structural Wall Panel Manufacturing						Total
December 31,	2017			2016			2017			2016			2017			2016
Segment net sales	$	24,229		$	24,654		$	16,324		$	3,502		$	40,553		$	28,156
Depreciation and amortization expense	504			502			399			131			903			633
Segment goodwill impairment expense	—			1,733			3,020			—			3,020			1,733
Interest expense, net	378			409			792			120			1,170			529
Segment net loss	(1,948		)	(3,503		)	(4,166		)	(155		)	(6,114		)	(3,658		)
Total segment assets	7,468			8,007			4,541			7,126			12,009			15,133
Expenditures for segment assets	405			51			38			22			443			73

Reconciliation of Segment Information

The following table presents the reconciliation of revenues (in thousands):



December 31,	2017		2016
Total net sales for reportable segments	$	40,553	$	28,156
Consolidated net sales	$	40,553	$	28,156

The following table presents the reconciliation of net loss (in thousands):



December 31,	2017			2016
Total net loss for reportable segments	$	(6,114	)	$	(3,658	)
Unallocated amounts:
Other corporate expenses	(1,805		)	(1,708		)
Interest expense	(1,108		)	(1,147		)
Change in fair value of contingent earn-out	361			(3		)
Provision for income taxes	(11		)	(8		)
Consolidated net loss	$	(8,677	)	$	(6,524	)

The following table presents the reconciliation of assets (in thousands):



December 31,	2017		2016
Total assets for reportable segments	$	12,009	$	15,133
Other assets	906		1,645
Consolidated assets	$	12,915	$	16,778

The following table presents the reconciliation other significant adjustments (in thousands):



	Segment Totals				Adjustments				Consolidated Totals
December 31,	2017		2016		2017		2016		2017		2016
Depreciation and amortization expense	$	903	$	633	$	—	$	—	$	903	$	633
Segment goodwill impairment expense	3,020		1,733		—		—		3,020		1,733
Interest expense	1,170		529		1,108		1,147		2,278		1,676

The adjustment to interest expense is the amount of interest incurred by the Company at the parent level, but not allocated to the operating segments. The other adjustments reflect amounts incurred at the parent not allocated to the operating segments. None of the other adjustments are considered significant.