Business Segments

The Company is a leading manufacturer and distributor of products and services for transportation and energy infrastructure with locations in North America and Europe. The Company is organized and evaluated by product group, which is the basis for identifying reportable segments. Each segment represents a revenue-producing component of the Company for which separate financial information is produced internally that is subject to evaluation by the Company’s chief operating decision maker in deciding how to allocate resources. Each segment is evaluated based upon its segment profit contribution to the Company’s consolidated results.

The Company markets its products directly in all major industrial areas of the United States, Canada, and Europe, primarily through an internal sales force.

The Company’s Rail Products and Services segment provides a full line of new and used rail, trackwork, and accessories to railroads, mines, and other customers in the rail industry. The Rail Products and Services segment also designs and produces insulated rail joints, power rail, track fasteners, concrete railroad ties, coverboards, and special accessories for mass transit and other rail systems. In addition, the Rail Products and Services segment engineers, manufactures, and assembles friction management products and railway wayside data collection and management systems.

The Company’s Construction Products segment sells and rents steel sheet piling, H-bearing pile, and other piling products for foundation and earth retention requirements. The Construction Products segment also sells bridge decking, bridge railing, structural steel fabrications, expansion joints, bridge forms, and other products for highway construction and repair. Lastly, the Construction Products segment produces precast concrete buildings and a variety of specialty precast concrete products.

The Company’s Tubular and Energy Services segment provides pipe coatings for natural gas pipelines and utilities, upstream test and inspection services, and precision measurement systems for the oil and gas market, and produces threaded pipe products for the oil and gas markets as well as industrial water well and irrigation markets.

The following table illustrates net sales, profit (loss), assets, depreciation/amortization, and expenditures for long-lived assets of the Company by segment for the years ended or at December 31, 2017, 2016, and 2015. Segment profit is the earnings from operations before income taxes and includes internal cost of capital charges for net assets used in the segment at a rate of generally 1% per month excluding recently acquired businesses. The internal cost of capital charges are eliminated during the consolidation process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies except that the Company accounts for inventory on a First-In, First-Out (“FIFO”) basis at the segment level compared to a Last-In, First-Out (“LIFO”) basis at the consolidated level.



	2017
	Net Sales		Segment Profit			Segment Assets		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	256,127	$	12,216		$	192,038	$	7,004	$	2,915
Construction Products	161,801		11,620			83,154		1,955		1,390
Tubular and Energy Services	118,449		3,849			100,706		9,410		1,282
Total	$	536,377	$	27,685		$	375,898	$	18,369	$	5,587

	2016
	Net Sales		Segment (Loss) Profit*			Segment Assets*		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	239,127	$	(26,228	)	$	174,049	$	7,276	$	856
Construction Products	145,602		8,189			81,074		2,256		687
Tubular and Energy Services	98,785		(116,126		)	100,006		12,644		3,810
Total	$	483,514	$	(134,165	)	$	355,129	$	22,176	$	5,353

	2015
	Net Sales		Segment Profit (Loss)**			Segment Assets**		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	328,982	$	27,037		$	241,222	$	8,098	$	4,273
Construction Products	176,394		12,958			86,335		2,720		1,260
Tubular and Energy Services	119,147		(81,344		)	216,715		14,857		4,303
Total	$	624,523	$	(41,349	)	$	544,272	$	25,675	$	9,836



*	Segment loss includes impairment of goodwill, definite-lived intangible assets, and property, plant, and equipment as further described in Note 4 Goodwill and Other Intangible Assets and Note 7 Property, Plant, and Equipment.



**	Segment loss includes impairment of goodwill as further described in Note 4 Goodwill and Other Intangible Assets.

During 2017, 2016, and 2015, no single customer accounted for more than 10% of the Company’s consolidated net sales. Sales between segments are immaterial.

Reconciliations of reportable segment net sales, profits (losses), assets, depreciation/amortization, and expenditures for long-lived assets to the Company’s consolidated totals are as follows for the years ended and as of December 31:



	2017			2016			2015
Income (loss) from Operations:
Profit (loss) for reportable segments	$	27,685		$	(134,165	)	$	(41,349	)
Interest expense	(8,377		)	(6,551		)	(4,378		)
Interest income	307			228			206
Other income	367			1,523			5,585
LIFO (expense) income	(2,009		)	2,643			2,468
Equity in income (loss) of nonconsolidated investments	6			(1,290		)	(413		)
Corporate expense, cost of capital elimination, and other unallocated charges	(9,937		)	(9,557		)	(12,696		)
Income (loss) before income taxes	$	8,042		$	(147,169	)	$	(50,577	)
Assets:
Total for reportable segments	$	375,898		$	355,129		$	544,272
Unallocated corporate assets	25,845			41,072			28,209
LIFO	(5,187		)	(3,178		)	(5,821		)
Total Assets	$	396,556		$	393,023		$	566,660
Depreciation/Amortization:
Total for reportable segments	$	18,369		$	22,176		$	25,675
Other	1,472			1,316			999
Total	$	19,841		$	23,492		$	26,674
Expenditures for Long-Lived Assets:
Total for reportable segments	$	5,587		$	5,353		$	9,836
Expenditures funded through financing agreements	—			—			288
Other expenditures	562			2,311			5,077
Total	$	6,149		$	7,664		$	15,201

The following table summarizes the Company’s sales by major geographic region in which the Company has operations for the years ended December 31:



	2017		2016		2015
United States	$	431,868	$	390,930	$	522,404
Canada	38,859		30,644		40,545
United Kingdom	37,237		37,188		26,817
Other	28,413		24,752		34,757
	$	536,377	$	483,514	$	624,523

The following table summarizes the Company’s long-lived assets by geographic region at December 31:



	2017		2016		2015
United States	$	89,439	$	96,650	$	118,053
Canada	4,788		5,445		6,186
United Kingdom	1,850		1,842		2,449
Other	19		36		57
	$	96,096	$	103,973	$	126,745

The following table summarizes the Company’s sales by major product line:



	2017		2016		2015
Rail Technologies	$	100,257	$	90,469	$	98,237
Rail Distribution	90,696		83,236		126,277
Piling	73,158		70,535		94,853
Precast Concrete Products	55,877		54,514		52,044
Test and Inspection Services	39,198		20,765		35,906
Protective Coatings	38,096		23,043		33,532
Fabricated Bridge	32,766		20,553		29,496
Precision Measurement Systems	29,670		42,830		36,048
Other products	76,659		77,569		118,130
	$	536,377	$	483,514	$	624,523