19. Segment Reporting

We report our results of operations in two segments: (1) Firearms (which includes Firearms and Manufacturing Services divisions) and (2) Outdoor Products & Accessories (which includes Outdoor Products & Accessories and Electro-Optics divisions). Our two segments are defined based on the reporting and review process used by the chief operating decision maker, our Chief Executive Officer. The Firearms segment has been determined to be a single operating segment and reporting segment based on our reliance on production metrics such as gross margin per unit produced, units produced per day, incoming orders per day, and revenue produced by trade channel, all of which are particular to the Firearms segment. The Outdoor Products & Accessories segment represents two operating segments that have been aggregated into a reportable segment, which are evaluated by a measurement of incoming orders per day and sales and gross margin by customer and brand.

The Firearms segment includes our firearms, services, and other components, which we manufacture or provide at our facilities in Springfield, Massachusetts, Houlton, Maine, Meridian, Idaho, and Deep River, Connecticut and our firearm products, which we develop, assemble, and market in our Springfield, Massachusetts facility. The Outdoor Products & Accessories segment includes our accessories products, which we develop, source, market, and distribute at our facilities in Columbia, Missouri and Jacksonville, Florida and our electro-optics products, which we develop, market, and assemble in our Wilsonville, Oregon facility. We report operating costs based on the activities performed within each segment.

Segment assets are those directly used in or clearly allocable to a reportable segment’s operations. Assets by business segment are presented in the following table as of April 30, 2018 and 2017 (in thousands):

	As of April 30, 2018						As of April 30, 2017
	Firearms		Outdoor Products & Accessories		Total		Firearms		Outdoor Products & Accessories		Total
Total assets	$	346,517	$	398,543	$	745,060	$	393,341	$	394,695	$	788,036
Property, plant, and equipment, net		146,154		12,971		159,125		135,985		13,700		149,685
Intangibles, net		4,944		107,816		112,760		2,792		138,525		141,317
Goodwill		18,490		172,797		191,287		13,770		155,247		169,017

Results by business segment are presented in the following table for the years ended April 30, 2018, 2017, and 2016 (in thousands):

	For the Year Ended April 30, 2018 (a)
	Firearms			Outdoor Products & Accessories				Corporate			Intersegment Eliminations			Total
Revenue from external customers	$	448,986		$	157,864			$	—		$	—		$	606,850
Intersegment revenue		3,807			13,816				—			(17,623	)		—
Total net sales		452,793			171,680				—			(17,623	)		606,850
Cost of sales		332,889	(b)		93,822				—			(15,613	)		411,098
Gross margin		119,903			77,859				—			(2,010	)		195,752
Operating income/(loss)		30,213			(5,508	)	(c)		(44,128	)		46,471			27,048
Income tax expense/(benefit) (d)		16,729			(8,059	)			(11,181	)		—			(2,511	)

	For the Year Ended April 30, 2017 (a)
	Firearms		Outdoor Products & Accessories				Corporate			Intersegment Eliminations			Total
Revenue from external customers	$	772,997	$	130,191			$	—		$	—		$	903,188
Intersegment revenue		3,643		10,530				—			(14,173	)		—
Total net sales		776,640		140,721				—			(14,173	)		903,188
Cost of sales		464,019		75,737		(e)		—			(11,840	)		527,916
Gross margin		312,619		64,985				—			(2,332	)		375,272
Operating income/(loss)		201,442		(3,949	)	(f)		(47,787	)		50,233			199,939
Income tax expense/(benefit)		77,585		(2,300	)			(11,833	)		—			63,452

	For the Year Ended April 30, 2016 (a)
	Firearms			Outdoor Products & Accessories			Corporate			Intersegment Eliminations			Total
Revenue from external customers	$	652,065	(g)	$	70,843	(g)	$	—		$	—		$	722,908
Intersegment revenue		1,821			743			—			(2,564	)		—
Total net sales		653,886			71,586			—			(2,564	)		722,908
Cost of sales		394,118	(g)		37,536	(g)		—			(2,558	)		429,096
Gross margin		259,767			34,051			—			(6	)		293,812
Operating income/(loss)		153,728			3,511			(17,201	)		18,605			158,643
Income tax expense/(benefit)		58,103			1,006			(7,974	)		—			51,135

(a)	For the years ended April 30, 2018, 2017, and 2016, we allocated all of corporate overhead expenses except for interest and income taxes, such as general and administrative expenses and other corporate-level expenses, to both our Firearms and Outdoor Products & Accessories segments.

(b)	Amount includes $500,000 of additional cost of goods sold from the fair value inventory step-up related to our 2018 Acquisitions.

(c)	Amount includes $20.8 million of amortization of intangible assets identified as a result of our acquisitions.

(d)	Amounts include an income tax benefit of approximately $8.7 million, primarily caused by the effect of Tax Reform, which resulted in the remeasurement of deferred tax assets and liabilities at lower enacted corporate federal tax rates.

(e)	Amount includes $4.7 million of additional cost of goods sold from the fair value inventory step-up and backlog expense related to the 2017 Acquisitions.

(f)	Amount includes $18.4 million of amortization of intangible assets identified as a result of our acquisitions.

(g)

Effective October 1, 2015, our Thompson/Center accessories business was transitioned from our Firearms segment to our Outdoor Products & Accessories segment. As a result of the transition, we have reclassified $5.6 million and $4.6 million of revenue and cost of sales, respectively, from the Firearms segment to the Outdoor Products & Accessories segment for the year ended April 30, 2016.