7. The Company sold substantially all of the assets of its ready mix concrete and Daniels sand operations in the first quarter of 2019. See Note 15. During the second quarter of 2019, the Company acquired the assets of four operating businesses through three separate transactions. See Note 16 for additional discussion of the acquisitions. In conjunction with these transactions management reviewed its segment reporting structure and determined it was no longer appropriate for the consolidated business going forward. The segment reporting was revised to align with the way the operating businesses are being managed and measured by management after the sale of TMC’s assets and the acquisitions discussed below. Prior year amounts have been reclassified to conform to current segment reporting structure.

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 aggregates and 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 and Other” 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 classification also includes expenses related to a property held by the Company which are not material to the consolidated Company.

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 June 29, 2019 and June 30, 2018 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
	HVAC		Doors		Materials		Corporate		Sale		Total
Six Months Ended June 29, 2019
Revenues from external customers	$	34,010	$	10,696	$	3,064	$	16	$	—	$	47,786
Depreciation, depletion and amortization		522		89		134		28		—		772
Operating income (loss)		(2,336)		993		13,183		(4,883)		—		6,957
Segment assets		45,984		13,783		11,407		14,438		—		85,612
Capital expenditures		193		108		132		15		—		448
Three Months ended June 29, 2019
Revenues from external customers	$	17,289	$	6,454	$	1,509	$	5	$	—	$	25,257
Depreciation, depletion and amortization		112		46		82		15		—		254
Operating income (loss)		(1,858)		614		(861)		(3,314)		—		(5,419)
Segment assets		45,984		13,783		11,407		14,438		—		85,612
Capital expenditures (b)		149		89		132		15		—		385




					Construction		Unallocated		Held for
	HVAC		Doors		Materials		Corporate		Sale		Total
Six Months Ended June 30, 2018
Revenues from external customers	$	35,131	$	10,078	$	3,725	$	33	$	—	$	48,967
Depreciation, depletion and amortization		540		82		165		23		—		810
Operating income (loss)		594		1,356		(6,561)		(1,899)		—		(6,510)
Segment assets (a)		29,003		8,003		11,315		3,346		24,036		75,703
Capital expenditures		545		79		64		46		—		734
Three Months ended June 30, 2018
Revenues from external customers	$	17,622	$	5,782	$	2,124	$	29	$	—	$	25,557
Depreciation, depletion and amortization		271		42		80		12		—		405
Operating income (loss)		279		918		692		(875)		—		1,014
Segment assets (a)		29,003		8,003		11,315		3,346		24,036		75,703
Capital expenditures (b)		280		46		—		(5)		—		321

(a)

Segment assets are as of December 29, 2018.

(b)

Capital expenditures are presented on the accrual basis of accounting.