Segment Information

12 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

20. SEGMENT INFORMATION

The Company has two operating segments, which are also its reportable segments. The Company's operating segments are organized based upon primary market channels and, in most instances, the end use of products.

Through its Electrical Raceway segment, the Company manufactures products that deploy, isolate and protect a structure's electrical circuitry from the original power source to the final outlet. These products, which include electrical conduit, armored cable, cable trays, mounting systems and fittings, are critical components of the electrical infrastructure for maintenance, repair and remodel markets. The vast majority of the Company's Electrical Raceway net sales are made to electrical distributors, who then serve electrical contractors and the Company considers both to be customers.

Through the MP&S segment, the Company provides products and services that frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications. The Company's principal products in this segment are metal framing products and in-line galvanized mechanical tube. Through its metal framing business, the Company designs, manufactures and installs metal strut and fittings used to assemble mounting structures that support heavy equipment and electrical content in buildings and other structures.

Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is the sum of income (loss) from operations before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, gain (loss) on extinguishment of debt, restructuring and impairments, stock-based compensation, certain legal matters, consulting fees, transaction costs, gain on sale of joint venture and other items, such as inventory reserves and adjustments, release of indemnified uncertain tax positions, the impact of foreign exchange gains or losses and the impact from the Fence and Sprinkler exit.

Intersegment transactions primarily consist of product sales at designated transfer prices on an arm's-length basis. Gross profit earned and reported within the segment is eliminated in the Company's consolidated results. Certain manufacturing and distribution expenses are allocated between the segments on a pro rata basis due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment. Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments. These shared assets are reported within the MP&S segment. We allocate certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.

	Fiscal year ended
	September 30, 2019							September 30, 2018							September 30, 2017
(in thousands)	External Net Sales		Inter- segment Sales			Adjusted EBITDA		External Net Sales		Inter- segment Sales			Adjusted EBITDA		External Net Sales		Inter- segment Sales			Adjusted EBITDA
Electrical Raceway	$	1,442,278	$	1,215		$	292,585	$	1,365,067	$	1,544		$	255,260	$	1,093,500	$	1,283		$	189,351
MP&S	474,260		—			$	70,040	470,072		81			$	51,339	410,434		98			$	63,687
Eliminations	—		(1,215		)			—		(1,625		)			—		(1,381		)
Consolidated operations	$	1,916,538	$	—				$	1,835,139	$	—				$	1,503,934	$	—

	Capital Expenditures						Total Assets
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2017		September 30, 2019		September 30, 2018		September 30, 2017
Electrical Raceway	$	19,856	$	16,389	$	13,037	$	871,771	$	751,024	$	757,775
MP&S	13,934		14,267		8,212		252,708		291,164		306,229
Unallocated	1,070		7,845		3,873		312,516		281,872		151,088
Consolidated operations	$	34,860	$	38,501	$	25,122	$	1,436,995	$	1,324,060	$	1,215,092

Presented below is a reconciliation of operating segment Adjusted EBITDA to Income before income taxes:

	Fiscal Year Ended
(in thousands)	September 30, 2019			September 30, 2018			September 30, 2017
Operating segment Adjusted EBITDA
Electrical Raceway	$	292,585		$	255,260		$	189,351
MP&S	70,040			51,339			63,687
Total	$	362,625		$	306,599		$	253,038
Unallocated expenses (a)	(38,217		)	(35,050		)	(25,430		)
Depreciation and amortization	(72,347		)	(66,890		)	(54,727		)
Interest expense, net	(50,473		)	(40,694		)	(26,598		)
Gain (loss) on extinguishment of debt	—			—			(9,805		)
Restructuring charges	(3,804		)	(1,849		)	(1,256		)
Stock-based compensation	(11,798		)	(14,664		)	(12,788		)
Certain legal matters	—			4,833			(7,551		)
Transaction costs	(1,200		)	(9,314		)	(4,779		)
Gain on purchase of business	7,384			—			—
Gain on sale of a business	—			27,575			—
Gain on sale of joint venture	—			—			5,774
Other (b)	(7,501		)	(4,194		)	10,247
Income before income taxes	$	184,669		$	166,352		$	126,125
(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.
(b) Represents other items, such as inventory reserves and adjustments, release of indemnified uncertain tax positions and the impact of foreign exchange gains or losses.

The Company's long-lived assets and net sales by geography were as follows:

	Long-lived assets						Net sales
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2017		September 30, 2019		September 30, 2018		September 30, 2017
United States	$	219,614	$	201,101	$	202,823	$	1,689,194	$	1,651,636	$	1,367,907
Other Americas	147		138		164		33,485		43,013		37,908
Europe	43,207		11,090		9,306		142,279		90,915		55,181
Asia-Pacific	1,998		2,386		3,378		51,580		49,575		42,938
Total	$	264,966	$	214,715	$	215,671	$	1,916,538	$	1,835,139	$	1,503,934

The table below shows the amount of net sales from external customers for each of the Company's product categories which accounted for 10% or more of consolidated net sales in any of the last three fiscal years:

	Fiscal Year Ended
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2017
Metal Electrical Conduit and Fittings	$	546,533	$	517,935	$	349,239
Armored Cable and Fittings	360,494		336,388		323,070
PVC Electrical Conduit & Fittings	292,243		311,811		265,389
Other raceway products	243,008		198,933		155,802
Electrical Raceway	1,442,278		1,365,067		1,093,500
Mechanical Pipe	259,613		253,381		211,245
Other MP&S products	214,647		216,691		199,189
MP&S	474,260		470,072		410,434
Net sales	$	1,916,538	$	1,835,139	$	1,503,934

Risks and Concentrations

Concentration of Credit Risk — The Company extends credit to various customers in the retail and construction industries. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact the Company's overall credit risk. Although the Company generally does not require collateral, the Company performs ongoing credit evaluations of customers and maintains reserves for potential credit losses. As of September 30, 2019, no single customer represented more than 10% of the Company's accounts receivable balance. As of September 30, 2018, one customer, Sonepar Management US, Inc., represented 11% of the Company's accounts receivable balance. As of November 28, 2018, all amounts outstanding as of September 30, 2018, that are due to be paid from Sonepar Management US, Inc., have been received. In fiscal 2017, no single customer accounted for more than 10% of sales or accounts receivable.

Concentration of Employees — As of September 30, 2019, approximately 27% of the Company's employees were represented by a union under a collective bargaining agreement. All unions are either located in the United States or Canada with no unions or Worker's Councils at any of the other locations abroad. Our Harvey, Illinois Special Metal Processing Facility agreement with the United Steelworkers Union, involving a bargaining unit of 15 employees, expired on November 11, 2018 and we successfully negotiated a new agreement which now expires in November 2022. Our Harvey, Illinois collective bargaining agreement with the United Steelworkers involves nearly 400 represented employees, is set expire in April 2020. The Company believes its relationship with its employees is good.