Business Segments

12 Months Ended

Dec. 31, 2018

The Company is a leading manufacturer and distributor of products and service provider for transportation and energy infrastructure with locations in North America and Europe. The Company is organized and operates in three different operating segments: the Rail Products and Services segment, the Construction Products segment, and the Tubular and Energy Services segment. The segments represent components of the Company (a) that engage in activities from which revenue is generated and expenses are incurred; (b) whose operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who makes decisions about resources to be allocated to the segments, and (c) for which discrete financial information is available. Operating segments are evaluated on their segment profit contribution to the Company's consolidated results. Other income and expenses, interest, income taxes, and certain other items are managed on a consolidated basis.

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, assets, depreciation/amortization, and expenditures for long-lived assets of the Company by segment. Segment profit from operations includes allocated corporate operating expenses. Prior to January 1, 2018, the allocation of corporate operating expenses reflected a cost of capital for the assets used in each segment at a rate of generally 1% per month. In 2018, operating expenses related to corporate headquarter functions that directly support the segment activity were allocated based on segment headcount, revenue contribution, or activity of the business units within the segments, based on the corporate activity type provided to the segment. The expense allocation excludes certain corporate costs that are separately managed from the segments. The prior year periods have been updated to reflect the change in allocating corporate operating expenses.

Management believes the current allocation of corporate operating expenses provides a more accurate presentation of how the segments utilize corporate support activities as compared to the cost of capital method previously used. This provides the CODM more meaningful segment profitability reporting to support operating decisions and the allocation of resources.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

The operating results and assets of the Company's operating segments were as follows as of and for the year ended December 31, 2018:


	Net Sales		Segment Profit		Segment Assets		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	319,524	$	19,468	$	175,704	$	6,810	$	941
Construction Products	158,653		6,798		97,133		1,728		796
Tubular and Energy Services	148,792		12,647		90,402		8,790		3,212
Total	$	626,969	$	38,913	$	363,239	$	17,328	$	4,949

The operating results and assets of the Company's operating segments were as follows as of and for the year ended December 31, 2017:


	Net Sales		Segment Profit		Segment Assets		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	256,127	$	11,078	$	192,038	$	7,004	$	2,915
Construction Products	161,801		14,040		83,154		1,955		1,390
Tubular and Energy Services	118,449		3,483		100,706		9,410		1,282
Total	$	536,377	$	28,601	$	375,898	$	18,369	$	5,587

During 2018 and 2017, 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, assets, depreciation/amortization, and expenditures for long-lived assets to the Company’s consolidated totals are as follows as of and for the years ended December 31:


	2018		2017*
Income from Operations:
Total segment profit	$	38,913	$	28,601
Interest expense - net	(6,154)		(8,070)
Other income	461		373
Concrete Tie Settlement expense (Note 19)	(43,400)		—
Corporate expense and other unallocated charges	(16,531)		(10,853)
(Loss) income before income taxes	$	(26,711)	$	10,051
Assets:
Total segment assets	$	363,239	$	375,898
Unallocated corporate assets	20,010		25,845

Assets	$	383,249	$	401,743
Depreciation/Amortization:
Total segment depreciation/amortization	$	17,328	$	18,369
Other	1,265		1,472
Depreciation/amortization	$	18,593	$	19,841
Expenditures for Long-Lived Assets:
Total segment expenditures for long-lived assets	$	4,949	$	5,587

Other expenditures	302		562
Expenditures for long-lived assets	$	5,251	$	6,149

* Year ended December 31, 2017 amounts have been revised to reflect the change in inventory accounting method, as described in Notes 1 and 6 to the Consolidated Financial Statements.

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


	2018		2017
United States	$	484,907	$	431,868
United Kingdom	66,451		37,237
Canada	42,810		38,859
Other	32,801		28,413
Total net sales	$	626,969	$	536,377

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


	2018		2017
United States	$	81,135	$	89,439
Canada	4,036		4,788
United Kingdom	1,671		1,850
Other	15		19
Total property, plant, and equipment - net	$	86,857	$	96,096

The following table summarizes the Company’s sales by major product line for the years ended December 31:


	2018		2017
Rail Products	$	188,590	$	155,870
Rail Technologies	130,934		100,257
Piling and Fabricated Bridge Products	102,246		105,924
Protective Coatings and Measurement Systems	89,026		67,766
Test, Inspection, and Threading Services	59,766		50,683
Precast Concrete Products	56,407		55,877
Total net sales	$	626,969	$	536,377