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Segments
 3 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segments
10. SEGMENTS
Operating segments for the Company are determined based on information used by the chief operating decision maker (“CODM”) in deciding how to evaluate performance and allocate resources to each of the segments. The CODM reviews Adjusted EBITDA and Adjusted EBITDA Margin as the key segment measures of performance. Adjusted EBITDA is defined as segment operating income (loss) plus depreciation and amortization, adjusted by adding thereto or subtracting therefrom stock-based compensation costs, business transformation costs, acquisition costs, capital structure transaction costs, and certain other costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.
The Company has two reportable segments, Residential and Commercial. The reportable segments were determined primarily based on products and end markets as follows:
• Residential—The Residential segment manufactures and distributes decking, rail, trim and accessories through a national network of dealers and distributors and multiple home improvement retailers providing extensive geographic coverage and enabling the Company to effectively serve contractors. The additions of Ultralox and Versatex are complementary to the Residential segment railing and trim businesses, respectively. The recent addition of Return Polymers provides a full-service recycled PVC material processing, sourcing, logistical support, and scrap management programs. This segment is impacted by trends in and the strength of home repair and remodel activity.
• Commercial—The Commercial segment manufactures, fabricates and distributes resin based extruded sheeting products for a variety of commercial and industrial applications through a widespread distribution network as well as directly to original equipment manufacturers. This segment includes Scranton Products which manufactures lockers and partitions and Vycom which manufactures resin based sheeting products. This segment is impacted by trends in and the strength of the new construction sector.
The segment data below includes data for Residential and Commercial for the three months ended December 31 2020 and 2019 (in thousands).
 
   
Three Months Ended December 31,
 
   
2020
   
2019
 
Net sales to customers
          
Residential
  $185,640   $135,668 
Commercial
   26,638    30,375 
   
 
 
   
 
 
 
Total
  $212,278   $166,043 
Segment Adjusted EBITDA
          
Residential
  $58,776   $38,915 
Commercial
   3,316    3,023 
   
 
 
   
 
 
 
Total Adjusted EBITDA for reporting segments
  $62,092   $41,938 
Unallocated net expenses
   (13,640)    (8,132) 
Adjustments to Income (loss) before income tax provision (benefit)
          
Depreciation and amortization
   (24,270)    (24,141) 
Stock-based compensation costs
   (2,980)    (685) 
Business transformation costs (1)
   —
 
 
    (163) 
Acquisition costs (2)
   —
 
 
    (565) 
Initial public offering costs 
   —
 
 
    (1,978) 
Other costs (
3
)
   (1,467)    (361) 
Interest expense
   (6,196)    (19,759) 
   
 
 
   
 
 
 
Income (loss) before income taxes
  $13,539   $(13,846) 
   
 
 
   
 
 
 
 
(1)
Business transformation costs reflect consulting and other costs related to the transformation of the senior management team of $0.2 million for the three months ended December 31, 2019.
(2)
Acquisition costs reflect costs directly related to completed acquisitions $0.6 million for the three months ended December 31, 2019.
(3)
Other 
costs include costs
 for legal expense of $0.5 million for the three months ended December 31, 2020 and costs related to an incentive plan and other ancillary expenses associated with the initial public offering of $1.0 million and $0.4 million for the three months ended December 31, 2020 and December 31, 2019, respectively.