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7. The Company operates primarily in two industry groups, Heating, Ventilation and Air Conditioning (HVAC) and Construction Products. Within each of these two industry groups, the Company has identified two reportable segments: the Heating and Cooling segment and the Evaporative Cooling segment in the HVAC industry group and the CACS segment and the Door segment in the Construction Products industry group.
The Heating and Cooling segment produces and sells gas-fired wall furnaces, console heaters and fan coils from the Company’s wholly-owned subsidiary, Williams Furnace Co. of Colton, California (WFC). The Evaporative Cooling segment produces and sells evaporative coolers from the Company’s wholly-owned subsidiary, Phoenix Manufacturing, Inc. of Phoenix, Arizona (PMI). Sales of these two segments are nationwide, but are concentrated in the southwestern United States. Concrete, Aggregates and Construction Supplies are offered from numerous locations along the Southern Front Range of Colorado operated by the Company’s wholly-owned subsidiaries collectively referred to as Transit Mix Concrete Co. (TMC). Doors are fabricated and sold along with the related hardware from Colorado Springs and Pueblo, Colorado through the Company’s wholly-owned subsidiary, McKinney Door and Hardware, Inc. of Pueblo, Colorado (MDHI). Sales of these two segments are highly concentrated in the Southern Front Range area in Colorado although door sales are also made throughout the United States.
In addition to the above reporting segments, an “Unallocated Corporate” classification is used to report the unallocated expenses of the corporate office which provides treasury, insurance and tax services as well as strategic business planning and general management services, and an “Other” classification is used to report a real estate operation and the activity of the new business venture discussed in Note 9. The Company purchased the residence of and made a loan to an executive of one of the Company’s subsidiaries in connection with his relocation. The residence is classified as an asset held for resale. The residence and the loan receivable are included in the assets of the “Other” classification. The loan is secured by marketable securities and bears interest at 5%. Expenses related to the corporate information technology group are allocated to all locations, including the corporate office.
The Company evaluates the performance of its segments and allocates resources to them based on a number of criteria including operating income, return on investment and other strategic objectives. Operating income is determined by deducting operating expenses from all revenues. In computing operating income, none of the following has been added or deducted: unallocated corporate expenses, interest, other income or loss or income taxes.
The following table presents information about reported segments for the six-month and three-month periods ended July 2, 2011 and July 3, 2010 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (amounts in thousands):
|
|
|
Construction Products |
|
HVAC Products |
|
|
|
|
|
|
|
|
|
|
Concrete, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates &
Construction
Supplies |
|
Doors |
|
Combined
Construction
Products |
|
Heating
and
Cooling |
|
Evaporative
Cooling |
|
Combined
HVAC
Products |
|
Unallocated
Corporate |
|
Other |
|
Total |
|
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months ended July 2, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers |
|
$ |
16,453 |
|
$ |
6,003 |
|
$ |
22,456 |
|
$ |
14,506 |
|
$ |
15,603 |
|
$ |
30,109 |
|
$ |
6 |
|
$ |
172 |
|
$ |
52,743 |
|
|
Depreciation, depletion and amortization |
|
1,646 |
|
67 |
|
1,713 |
|
209 |
|
225 |
|
434 |
|
34 |
|
— |
|
2,181 |
|
|
Operating (loss) income |
|
(2,721 |
) |
485 |
|
(2,236 |
) |
164 |
|
1,917 |
|
2,081 |
|
(1,296 |
) |
(87 |
) |
(1,538 |
) |
|
Segment assets |
|
35,100 |
|
6,182 |
|
41,282 |
|
17,157 |
|
12,906 |
|
30,063 |
|
5,772 |
|
1,144 |
|
78,261 |
|
|
Capital expenditures (b) |
|
(480 |
) |
(56 |
) |
(536 |
) |
(70 |
) |
(138 |
) |
(208 |
) |
(14 |
) |
— |
|
(758 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended July 2, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers |
|
$ |
9,099 |
|
$ |
2,890 |
|
$ |
11,989 |
|
$ |
6,111 |
|
$ |
9,786 |
|
$ |
15,897 |
|
$ |
3 |
|
$ |
86 |
|
$ |
27,975 |
|
|
Depreciation, depletion and amortization |
|
821 |
|
34 |
|
855 |
|
104 |
|
112 |
|
216 |
|
18 |
|
— |
|
1,089 |
|
|
Operating (loss) income |
|
(1,046 |
) |
285 |
|
(761 |
) |
88 |
|
1,436 |
|
1,524 |
|
(609 |
) |
(71 |
) |
83 |
|
|
Segment assets |
|
35,100 |
|
6,182 |
|
41,282 |
|
17,157 |
|
12,906 |
|
30,063 |
|
5,772 |
|
1,144 |
|
78,261 |
|
|
Capital expenditures (b) |
|
(283 |
) |
(43 |
) |
(326 |
) |
(44 |
) |
(53 |
) |
(97 |
) |
(9 |
) |
— |
|
(432 |
) |
|
|
|
Construction Products |
|
HVAC Products |
|
|
|
|
|
|
|
|
|
|
Concrete, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates &
Construction
Supplies |
|
Doors |
|
Combined
Construction
Products |
|
Heating
and
Cooling |
|
Evaporative
Cooling |
|
Combined
HVAC
Products |
|
Unallocated
Corporate |
|
Other |
|
Total |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months ended July 3, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers |
|
$ |
18,517 |
|
$ |
6,740 |
|
$ |
25,257 |
|
$ |
15,901 |
|
$ |
14,054 |
|
$ |
29,955 |
|
$ |
7 |
|
$ |
172 |
|
$ |
55,391 |
|
|
Depreciation, depletion and amortization |
|
1,735 |
|
72 |
|
1,807 |
|
196 |
|
230 |
|
426 |
|
32 |
|
— |
|
2,265 |
|
|
Operating (loss) income |
|
(985 |
) |
524 |
|
(461 |
) |
(387 |
) |
1,600 |
|
1,213 |
|
(1,349 |
) |
54 |
|
(543 |
) |
|
Segment assets (a) |
|
36,761 |
|
5,528 |
|
42,289 |
|
18,976 |
|
11,876 |
|
30,852 |
|
6,357 |
|
63 |
|
79,561 |
|
|
Capital expenditures (b) |
|
384 |
|
9 |
|
393 |
|
122 |
|
30 |
|
152 |
|
— |
|
— |
|
545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended July 3, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers |
|
$ |
11,789 |
|
$ |
3,112 |
|
$ |
14,901 |
|
$ |
7,081 |
|
$ |
9,678 |
|
$ |
16,759 |
|
$ |
4 |
|
$ |
86 |
|
$ |
31,750 |
|
|
Depreciation, depletion and amortization |
|
894 |
|
38 |
|
932 |
|
98 |
|
115 |
|
213 |
|
16 |
|
— |
|
1,161 |
|
|
Operating (loss) income |
|
628 |
|
180 |
|
808 |
|
(84 |
) |
1,450 |
|
1,366 |
|
(704 |
) |
27 |
|
1,497 |
|
|
Segment assets (a) |
|
36,761 |
|
5,528 |
|
42,289 |
|
18,976 |
|
11,876 |
|
30,852 |
|
6,357 |
|
63 |
|
79,561 |
|
|
Capital expenditures (b) |
|
379 |
|
9 |
|
388 |
|
91 |
|
25 |
|
116 |
|
— |
|
— |
|
504 |
|
(a) Segment assets are as of January 1, 2011.
(b) Capital expenditures are presented on the accrual basis of accounting.
There are no differences in the basis of segmentation or in the basis of measurement of segment profit or loss from the last Annual Report on Form 10-K.
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