7. Industry Segment Information

The Company operates primarily in the Building Products industry group. Within this industry group the Company has identified three reportable segments: the HVAC segment, the Door segment and the Construction Materials segment.

The HVAC segment produces and sells a variety of products including wall furnaces, fan coils, evaporative coolers, boiler room equipment and dryer boxes and related accessories from the Company’s wholly-owned subsidiaries, Williams Furnace Co. (WFC) of Colton, California, Phoenix Manufacturing, Inc. (PMI) of Phoenix, Arizona, Global Flow Products /American HVAC (GFP) of Broken Arrow, Oklahoma, and InOvate Dryer Technologies (InOvate) of Jupiter, Florida. Sales of this segment are nationwide although WFC and PMI sales are more concentrated in the southwestern United States. The Door segment sells hollow metal and wood doors, door frames and related hardware, sliding door systems and electronic access and security systems from the Company’s wholly-owned subsidiaries: McKinney Door and Hardware, Inc. (MDHI), Fastrac Building Supply (Fastrac) and Serenity Sliding Door Systems (Serenity), which operate out of facilities in Pueblo and Colorado Springs, Colorado. Sales of this segment are concentrated in Colorado, California and the Northwestern United States although door sales are also made throughout the United States. The Construction Materials segment offers construction supplies from locations along the Southern Front Range of Colorado operated by the Company’s wholly-owned subsidiaries, Castle Aggregates and Castle Rebar & Supply of Colorado Springs, and TMOP Legacy Company (formerly Transit Mix of Pueblo, Inc.) of Pueblo, Colorado (the three companies collectively are referred to as the Castle Companies).

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. 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 three-month periods ended March 28, 2020 and March 30, 2019 along with the items necessary to reconcile the segment information to the totals reported in the financial statements (amounts in thousands):




					Construction		Unallocated		Held for
Three Months ended March 28, 2020	HVAC		Doors		Materials		Corporate		Sale		Total
Revenues from external customers	$	23,655	$	5,721	$	1,470	$	—	$	—	$	30,845
Depreciation and amortization		332		73		48		61		—		513
Operating income (loss)		2,536		79		(636)		(1,845)		—		134
Segment assets		46,250		11,506		7,291		22,760		380		88,187
Capital expenditures (b)		12		14		—		—		—		26




					Construction		Unallocated		Held for
Three Months ended March 30, 2019	HVAC		Doors		Materials		Corporate		Sale		Total
Revenues from external customers	$	16,720	$	4,242	$	1,554	$	11	$	—	$	22,528
Depreciation and amortization		411		43		52		13		—		519
Operating income (loss)		(481)		379		14,044		(1,567)		—		12,375
Segment assets (a)		50,822		14,248		10,463		13,554		896		89,983
Capital expenditures (b)		44		19		—		—		—		63

(a) Segment assets are as of December 28, 2019.

(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.