OPERATING SEGMENTS

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, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 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 (unaudited)(in thousands):



	Modular Home Manufacturing						Structural Wall Panel Manufacturing					Total
March 31,	2019			2018			2019		2018			2019			2018
Segment net sales	$	2,378		$	4,849		$	4,957	$	2,835		$	7,335		$	7,684
Depreciation and amortization expense	135			132			55		48			190			180
Interest expense, net	76			90			125		134			201			224
Segment net (loss) income	(797		)	(284		)	387		(281		)	(410		)	(565		)
Total segment assets	5,166			7,095			4,348		3,563			9,514			10,658
Expenditures for segment assets	—			12			60		5			60			17

Reconciliation of Segment Information (unaudited)(in thousands)

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



March 31,	2019		2018
Total net sales for reportable segments	$	7,335	$	7,684
Consolidated net sales	$	7,335	$	7,684

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



March 31,	2019			2018
Total net loss for reportable segments	$	(410	)	$	(565	)
Unallocated amounts:
Other corporate expenses	(306		)	(430		)
Interest expense	(62		)	(13		)
Change in fair value of contingent earn-out	—			2
Provision for income taxes	(3		)	(4		)
Consolidated net loss	$	(781	)	$	(1,010	)

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



	March 31,		December 31,
	2019		2018
Total assets for reportable segments	9,514		$	10,937
Other assets	1,480		641
Consolidated assets	$	10,994	$	11,578

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



	Segment Totals				Unallocated Amount				Consolidated Totals
March 31,	2019		2018		2019		2018		2019		2018
Depreciation and amortization expense	$	190	$	180	$	—	$	—	$	190	$	180
Interest expense	201		224		62		13		263		237

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