Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.3.1.900
Segment Information
 12 Months Ended
Dec. 31, 2015
Segment Information  
Segment Information

7.  SEGMENT INFORMATION

 

Our reportable segments are as follows:

 

Installation principally includes the sale and installation of insulation and other building products.  We sell primarily to the residential new construction market, but have seen increasing activity in both the commercial construction industry and repair/remodel of residential housing.  In addition to insulation, our installed product lines include rain gutters, garage doors, fireplaces, fireproofing and firestopping products, shower enclosures, closet shelving, and other building products. 

 

Distribution principally includes the distribution of insulation and other building products.  Our distributed products include insulation, insulation accessories, rain gutters, and roofing, among others.  Distributed products are sold primarily to contractors and dealers (including lumber yards) from distribution centers in various parts of the United States.

 

Our segments are based on our operating units, for which financial information is regularly evaluated by our corporate operating executives in determining resource allocation and assessing performance.  Accounting policies for the segments are generally the same as those for the Company.  The key performance metric we use to evaluate our businesses is segment operating profit.  Operating profit for the individual segments includes estimated corporate costs which are allocated to the segments based on various metrics including sales and headcount.  To arrive at total segment operating profit, the aforementioned allocated estimated corporate costs are removed and replaced with actual corporate costs, which are allocated to the segments based on direct benefit or usage (such as salaries of corporate employees who directly support the segment).  Differences between estimated and actual corporate costs are included in ‘‘Intercompany eliminations and other adjustments.’’

 

Intercompany sales from the Distribution segment to the Installation segment are recorded by the Distribution segment with a profit margin and by our Installation segment at cost.

 

The following table is a summary of the annual percentage of net sales by product category:

 

 

 

 

 

 

 

 

 

 

 

 

    

2015

    

2014

    

2013

Insulation

 
72

%

 
71

%

 
70

%

Rain gutters

 
7

 

 
7

 

 
7

 

Accessories

 
4

 

 
4

 

 
4

 

Afterpaint (shower enclosures, closet shelving, mirrors/glass, bath accessories, etc.)

 
4

 

 
4

 

 
3

 

Garage doors

 
3

 

 
3

 

 
3

 

Fireplaces

 
2

 

 
2

 

 
3

 

Roofing materials

 
2

 

 
2

 

 
3

 

Fireproofing and firestopping

 
2

 

 
1

 

 
1

 

Other

 
4

 

 
6

 

 
6

 

 

 
100

%

 
100

%

 
100

%

 

 

Information about us by segment is as follows, in thousands:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

Operating Profit

 

 

2015

    

2014

    

2013

    

2015

    

2014

    

2013

Our operations by segment were (1):

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

Installation

 

$
1,057,553

 

$
963,351

 

$
904,570

 

$
55,232

 

$
23,970

 

$
6,160

Distribution

 

 
646,441

 

 
628,810

 

 
578,141

 

 
55,700

 

 
52,334

 

 
46,405

Intercompany eliminations and other adjustments (2)

 

 
(87,414)

 

 
(80,084)

 

 
(71,187)

 

 
(4,796)

 

 
(13,639)

 

 
(6,389)

Total

 

$
1,616,580

 

$
1,512,077

 

$
1,411,524

 

 
106,136

 

 
62,665

 

 
46,176

General corporate expense, net (3)

 

 

 

 

 

 

 

 

 

 

 
(22,605)

 

 
(21,948)

 

 
(22,073)

Operating profit, as reported

 

 

 

 

 

 

 

 

 

 

 
83,531

 

 
40,717

 

 
24,103

Other expense, net

 

 

 

 

 

 

 

 

 

 

 
(9,416)

 

 
(12,379)

 

 
(13,329)

Income from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

$
74,115

 

$
28,338

 

$
10,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Additions

    

Depreciation and
Amortization

    

Total Assets

 

 

2015

 

2014

  

2013

  

2015

  

2014

  

2013

  

2015

 

2014

Our operations by segment were (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installation

 

$
9,802

 

$
9,270

 

$
10,505

 

$
8,371

 

$
22,564

 

$
23,924

 

$
927,303

 

$
904,118

Distribution

 

 
3,123

 

 
3,871

 

 
3,503

 

 
3,699

 

 
3,515

 

 
3,564

 

 
574,601

 

 
572,306

Corporate

 

 
1,302

 

 

 —

 

 

 —

 

 
38

 

 

 —

 

 

 —

 

 
140,345

 

 

 —

Total, as reported

 

$
14,227

 

$
13,141

 

$
14,008

 

$
12,108

 

$
26,079

 

$
27,488

 

$
1,642,249

 

$
1,476,424

 

 

 

(1)

All of our operations are located in the United States.

 

 

(2)

Intercompany eliminations include the elimination of intercompany profit of $15.6 million, $14.1 million, and $11.2 million for the years ending December 31, 2015, 2014, and 2013, respectively.  Other adjustments primarily include differences between estimated and actual corporate costs allocated to the segments.  During the years ended December 31, 2015, 2014, and 2013, other adjustments were $10.8 million, $0.5 million, and $4.8 million, respectively.

 

 

(3)

General corporate expense, net included those expenses not specifically attributable to our segments.