13.

SEGMENTS

Segment Reporting

Previously, the Company managed its business in two segments: Commercial Trailer Products and Diversified Products. In the third quarter of 2017, the Company completed the acquisition of Supreme. As a result, the Company implemented a new reporting segment during the fourth quarter referred to as the Final Mile Products segment, which includes the operations of Supreme and other truck body activities previously reported in the Company’s Commercial Trailer Products segment. The Commercial Trailer Products segment manufactures standard and customized van and platform trailers and other transportation related equipment to customers who purchase directly from the Company or through independent dealers. The Diversified Products segment, comprised of four strategic business units including, Tank Trailer, Aviation &; Truck Equipment, Process Systems and Composites, focuses on the Company’s commitment to expand its customer base, diversify its product offerings and revenues and extend its market leadership by leveraging its proprietary DuraPlate^® panel technology, drawing on its core manufacturing expertise and making available products that are complementary to truck and tank trailers and transportation equipment.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that the Company evaluates segment performance based on income from operations. The Company has not allocated certain corporate related administrative costs, interest and income taxes included in the corporate and eliminations segment to the Company’s other reportable segments. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up.

Reportable segment information is as follows (in thousands):

	Commercial		Diversified		Final Mile		Corporate and
	Trailer Products		Products		Products		Eliminations		Consolidated
2017
Net sales
External customers	$	1,348,251	$	348,449	$	70,461	$	-	$	1,767,161
Intersegment sales		131		12,909		-		(13,040)		-
Total net sales	$	1,348,382	$	361,358	$	70,461	$	(13,040)	$	1,767,161

Depreciation and amortization		9,975		22,236		1,152		1,690		35,053
Income (Loss) from operations		151,999		20,376		(2,098)		(39,461)		130,816
Reconciling items to net income
Interest expense										16,400
Other, net										(8,122)
Income tax expense										11,116
Net income									$	111,422
Assets	$	311,705	$	340,651	$	404,246	$	294,911	$	1,351,513

2016
Net sales
External customers	$	1,506,070	$	339,374	$	-	$	-	$	1,845,444
Intersegment sales		40		13,030		-		(13,070)		-
Total net sales	$	1,506,110	$	352,404	$	-	$	(13,070)	$	1,845,444

Depreciation and amortization		12,345		22,970		-		1,454		36,769
Income (Loss) from operations		212,351		24,595		-		(34,414)		202,532
Reconciling items to net income
Interest expense										15,663
Other, net										1,452
Income tax expense										65,984
Net income									$	119,433
Assets	$	312,848	$	370,338	$	-	$	215,547	$	898,733

2015
Net sales
External customers	$	1,582,019	$	445,470	$	-	$	-	$	2,027,489
Intersegment sales		222		11,457		-		(11,679)		-
Total net sales	$	1,582,241	$	456,927	$	-	$	(11,679)	$	2,027,489

Depreciation and amortization		12,674		23,888		-		1,436		37,998
Income (Loss) from operations		159,385		51,078		-		(30,094)		180,369
Reconciling items to net income
Interest expense										19,548
Other, net										(2,490)
Income tax expense										59,022
Net income									$	104,289
Assets	$	336,235	$	397,892	$	-	$	215,543	$	949,670

Customer Concentration

The Company is subject to a concentration of risk as the five largest customers together accounted for approximately 24%, 24% and 25% of the Company’s aggregate net sales in 2017, 2016 and 2015, respectively. In addition, for each of the last three years there were no customers whose revenue individually represented 10% or more of our aggregate net sales. International sales accounted for less than 10% in each of the last three years.

Product Information

The Company offers products primarily in four general categories: (1) new trailers, (2) used trailers, (3) components, parts and service and (4) equipment and other. The following table sets forth the major product categories and their percentage of consolidated net sales (dollars in thousands):

	Commercial		Diversified		Final Mile
	Trailer Products		Products		Products		Eliminations		Consolidated
Year ended December 31,
2017	$		$		$		$		$		%
New trailers		1,273,584		140,105		-		-		1,413,689		80.0
Used trailers		10,720		3,278		-		-		13,998		0.8
Components, parts and service		48,008		117,681		1,877		(13,040)		154,526		8.7
Equipment and other		16,070		100,294		68,584		-		184,948		10.5
Total net external sales		1,348,382		361,358		70,461		(13,040)		1,767,161		100.0

	Commercial		Diversified		Final Mile
	Trailer Products		Products		Products		Eliminations		Consolidated
2016	$		$		$		$		$		%
New trailers		1,421,586		129,639		-		(89)		1,551,136		84.1
Used trailers		11,998		3,176		-		-		15,174		0.8
Components, parts and service		56,191		111,519		-		(12,955)		154,755		8.4
Equipment and other		16,335		108,070		-		(26)		124,379		6.7
Total net external sales		1,506,110		352,404		-		(13,070)		1,845,444		100.0

	Commercial		Diversified		Final Mile
	Trailer Products		Products		Products		Eliminations		Consolidated
2015	$		$		$		$		$		%
New trailers		1,474,201		218,028		-		-		1,692,229		83.5
Used trailers		31,022		4,558		-		-		35,580		1.8
Components, parts and service		60,482		119,696		-		(11,628)		168,550		8.3
Equipment and other		16,536		114,645		-		(51)		131,130		6.4
Total net external sales		1,582,241		456,927		-		(11,679)		2,027,489		100.0