OPERATING SEGMENTS

The Company manages and organizes its business in three distinct reportable segments: (i) modular building manufacturing, (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations, and (iii) investment advising services. 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 investment advisory segment, through LSVM, provides services that include investment advisory services, servicing pooled investment vehicles as well as other specialty investment portfolios. 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				Investment Advising					Total
Three Months Ended June 30,	2019		2018		2019		2018		2019			2018		2019		2018
Segment net sales	$	2,894	$	4,942	$	3,971	$	5,533	$	50		$	873	$	6,915	$	11,348
Depreciation and amortization expense	51		132		60		50		—			—		111		182
Interest expense (income), net	66		84		125		130		—			—		191		214
Segment net income	159		65		159		104		(77		)	330		241		499
Total segment assets	4,813		7,586		3,812		5,876		41			987		8,666		14,449
Expenditures for segment assets	—		—		117		101		—			—		117		101



	Modular Home Manufacturing						Structural Wall Panel Manufacturing					Investment Advising					Total
Six Months Ended June 30,	2019			2018			2019		2018			2019			2018		2019			2018
Segment net sales	$	5,272		$	9,791		$	8,929	$	8,368		$	83		$	913	$	14,284		$	19,072
Depreciation and amortization expense	186			264			115		98			—			—		301			362
Interest expense (income), net	142			174			250		264			—			—		392			438
Segment net (loss) income	(639		)	(219		)	546		(177		)	(180		)	140		(273		)	(256		)
Total segment assets	4,813			7,586			3,812		5,876			41			987		8,666			14,449
Expenditures for segment assets	—			12			176		106			—			—		176			118

Reconciliation of Segment Information (unaudited)(in thousands)

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



Three Months Ended June 30,	2019		2018
Total net sales for reportable segments	$	6,915	$	11,348
Consolidated net sales	$	6,915	$	11,348



Six Months Ended June 30,	2019		2018
Total net sales for reportable segments	$	14,284	$	19,072
Consolidated net sales	$	14,284	$	19,072

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



Three Months Ended June 30,	2019			2018
Total net income for reportable segments	$	241		$	499
Unallocated amounts:
Other corporate expenses	(649		)	(331		)
Interest expense	(62		)	(24		)
Change in fair value of contingent earn-out	—			2
Provision for income taxes	(11		)	(11		)
Consolidated net (loss) income	$	(481	)	$	135



Six Months Ended June 30,	2019			2018
Total net loss for reportable segments	$	(273	)	$	(256	)
Unallocated amounts:
Other corporate expenses	(954		)	(761		)
Interest expense	(124		)	(37		)
Change in fair value of contingent earn-out	—			4
Provision for income taxes	(14		)	(15		)
Consolidated net loss	$	(1,365	)	$	(1,065	)

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



	June 30,		December 31,
	2019		2018
Total assets for reportable segments	8,666		$	11,051
Other assets	1,024		656
Consolidated assets	$	9,690	$	11,707

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



	Segment Totals				Unallocated Amount				Consolidated Totals
Three Months Ended June 30,	2019		2018		2019		2018		2019		2018
Depreciation and amortization expense	$	111	$	182	$	—	$	—	$	111	$	182
Interest expense	191		214		63		24		254		238



	Segment Totals				Unallocated Amount				Consolidated Totals
Six Months Ended June 30,	2019		2018		2019		2018		2019		2018
Depreciation and amortization expense	$	301	$	362	$	—	$	—	$	301	$	362
Interest expense	392		438		125		37		517		475

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. None of the other adjustments are considered significant.