11.	Segment Information :

The Company follows the accounting guidance that requires the utilization of a “management approach” to define and report the financial results of operating segments. The management approach defines operating segments along the lines used by the Company’s chief operating decision maker (CODM) to assess performance and make operating and resource allocation decisions. The CODM evaluates performance and allocates resources based primarily on operating income (loss). The operating segments are based primarily on internal management reporting.

The Company operates in

three

reportable segments; carbon flat products, specialty metals flat products, and tubular and pipe products. The flat products segments’ assets and resources are shared by the carbon and specialty metals segments and both segments’ products are stored in the shared facilities and, in some locations, processed on shared equipment. As such, total assets and capital expenditures are reported in the aggregate for the flat products segments. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the carbon flat products segment and the specialty metals flat products segment based upon an established allocation methodology. Through its carbon flat products segment, the Company sells and distributes large volumes of processed carbon and coated flat-rolled sheet, coil and plate products. Through its specialty metals flat products segment, the Company sells and distributes processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. Through its tubular and pipe products segment, the Company distributes metal tubing, pipe, bar, valve and fittings and fabricates pressure parts supplied to various industrial markets.

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all

three

segments), including compensation for certain personnel, expenses related to being a publicly traded entity such as board of directors’ expenses, audit expenses, and various other professional fees.

The following table provides financial information by segment and reconciles the Company’s operating income by segment to the consolidated income before income taxes for the

three

months ended

March 31, 2018

and

2017.

	For the Three Months Ended
	March 31,
(in thousands)	2018			2017
Net sales
Carbon flat products	$	240,894		$	216,916
Specialty metals flat products		65,529			57,955
Tubular and pipe products		69,175			60,022
Total net sales	$	375,598		$	334,893

Depreciation and amortization
Carbon flat products	$	2,560		$	2,889
Specialty metals flat products		204			226
Tubular and pipe products		1,456			1,396
Corporate		26			25
Total depreciation and amortization	$	4,246		$	4,536

Operating income (loss)
Carbon flat products	$	8,106		$	7,375
Specialty metals flat products		3,011			3,985
Tubular and pipe products		4,267			2,487
Corporate expenses		(3,039	)		(2,796	)
Total operating income	$	12,345		$	11,051
Other income (loss), net		(46	)		(26	)
Income before interest and income taxes		12,299			11,025
Interest and other expense on debt		1,986			1,626
Income before income taxes	$	10,313		$	9,399

	For the Three Months Ended
	March 31,
(in thousands)	2018		2017
Capital expenditures
Flat products segments	$	4,944	$	1,405
Tubular and pipe products		2,710		661
Corporate		89		-
Total capital expenditures	$	7,743	$	2,066

	As of
	March 31,		December 31,
(in thouands)	2018		2017
Assets
Flat products segments	$	490,622	$	409,116
Tubular and pipe products		199,938		194,787
Corporate		319		255
Total assets	$	690,879	$	604,158

There were

material revenue transactions between the carbon flat products, specialty metals products, and tubular and pipe products segments.

The Company sells certain products internationally, primarily in Canada, Mexico and Dominican Republic. International sales are immaterial to the consolidated financial results and to the individual segments’ results.