Business Segments

12 Months Ended

Dec. 31, 2019

The Company is a leading manufacturer and distributor of products and provider of services 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, application systems, railroad condition monitoring systems and equipment, wheel impact load detection, fire protection systems, 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, 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. 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.

Management believes the allocation of corporate operating expenses provides an accurate presentation of how the segments utilize corporate support activities. This provides the CODM a 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 found in Note 1.

The operating results and assets of the Company’s operating segments were as follows as of and for the year ended December 31, 2019:


	Net Sales		Segment Profit		Segment Assets		Depreciation/Amortization		Expenditures for Long-Lived Assets
Rail Products and Services	$	321,808	$	19,641	$	186,323	$	6,469	$	2,293
Construction Products	182,486		5,726		83,049		1,660		1,266
Tubular and Energy Services	150,763		11,147		77,320		8,174		4,920
Total	$	655,057	$	36,514	$	346,692	$	16,303	$	8,479

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

During 2019 and 2018, no single customer accounted for more than 10% of the Company’s consolidated net sales. Sales between segments were 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:


	2019		2018
Income from Operations:
Total segment profit	$	36,514	$	38,913
Interest expense - net	(4,920)		(6,154)
Other (expense) income	(4,492)		461
Concrete Tie Settlement expense (Note 18)	—		(43,400)
Corporate expense and other unallocated charges	(9,705)		(16,531)
Income (loss) before income taxes	$	17,397	$	(26,711)
Assets:
Total segment assets	$	346,692	$	363,239
Unallocated corporate assets	58,479		20,010

Assets	$	405,171	$	383,249
Depreciation/Amortization:
Total segment depreciation/amortization	$	16,303	$	17,328
Other	1,328		1,265
Depreciation/amortization	$	17,631	$	18,593
Expenditures for Long-Lived Assets:
Total segment expenditures for long-lived assets	$	8,479	$	4,949

Other expenditures for long-lived assets	352		302
Expenditures for long-lived assets	$	8,831	$	5,251

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


	2019		2018
United States	$	529,363	$	484,907
United Kingdom	41,879		66,451
Canada	57,574		42,810
Other	26,241		32,801
Total net sales	$	655,057	$	626,969

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


	2019		2018
United States	$	77,101	$	81,135
Canada	3,590		4,036
United Kingdom	1,610		1,671
Other	13		15
Total property, plant, and equipment - net	$	82,314	$	86,857

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


	2019		2018
Rail Products	$	194,464	$	188,590
Rail Technologies	127,344		130,934
Piling and Fabricated Bridge Products	114,076		102,246
Protective Coatings and Measurement Systems	99,760		89,026
Precast Concrete Products	68,410		56,407
Test, Inspection, and Threading Services	51,003		59,766
Total net sales	$	655,057	$	626,969