Business Segment Information | Note 19. Business Segment Information The Company is organized into three reportable segments based on management’s process for making operating decisions, allocating capital and measuring performance, and based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows: Fire & Emergency Commercial Recreation For purposes of measuring financial performance of its business segments, the Company does not allocate to individual business segments costs or items that are of a corporate nature. The caption “Corporate and Other” includes corporate office expenses, results of insignificant operations, intersegment eliminations and income and expense not allocated to reportable segments. Identifiable assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, certain property, plant and equipment and certain other assets pertaining to corporate and other centralized activities. Intersegment sales generally include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated in consolidation. In considering the financial performance of the business, the chief operating decision maker analyzes the primary financial performance measure of Adjusted EBITDA. Adjusted EBITDA is defined as net income for the relevant period before depreciation and amortization, interest expense and provision for income taxes, as adjusted for transaction expenses, sponsor expenses, restructuring costs, loss on early extinguishment of debt, certain legal settlements, non-cash purchase accounting expenses, stock based compensation expense and deferred purchase price payment which the Company believes are not indicative of the Company’s ongoing operating performance. Adjusted EBITDA is not a measure defined by U.S. GAAP, but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of this performance measure to income before provision for income taxes is included below. The Company believes that Adjusted EBITDA is useful to investors and used by management for measuring profitability because the measure excludes the impact of certain items which management believes has less bearing on the Company’s core operating performance. The Company believes that utilizing Adjusted EBITDA allows for a more meaningful comparison of operating fundamentals between companies within its industries by eliminating the impact of capital structure and taxation differences between the companies. The Company also adjusts for exceptional items which are determined to be those that in management’s judgment need to be disclosed by virtue of their size, nature or incidence, which include non-cash items and items settled in cash. In determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. This is consistent with the way that financial performance is measured by management and reported to our Board of Directors, assists in providing a meaningful analysis of the Company’s operating performance and used as a measurement in incentive compensation for management. Selected financial information of the Company’s segments for the three months ended April 30, 2018 and April 29, 2017, is as follows (in thousands): Three Months Ended April 30, 2018 Fire & Emergency Commercial Recreation Corporate and Other Consolidated Sales: Net Sales—External Customers $ 252,018 $ 157,995 $ 198,794 $ 127 $ 608,934 Net Sales—Intersegment $ — $ 3,499 $ 7,845 $ (11,344 ) $ — Depreciation and amortization $ 4,006 $ 2,830 $ 3,055 $ 1,210 $ 11,101 Capital expenditures $ 1,141 $ 1,277 $ 2,927 $ 4,684 $ 10,029 Identifiable assets $ 613,749 $ 287,998 $ 337,544 $ 119,374 $ 1,358,665 Adjusted EBITDA $ 21,788 $ 9,530 $ 12,735 $ (9,960 ) Three Months Ended April 29, 2017 Fire & Emergency Commercial Recreation Corporate and Other Consolidated Sales: Net Sales—External Customers $ 219,002 $ 159,524 $ 166,337 $ 453 $ 545,316 Net Sales—Intersegment $ — $ 2,980 $ 4,318 $ (7,298 ) $ — Depreciation and amortization $ 2,819 $ 1,748 $ 2,599 $ 687 $ 7,853 Capital expenditures $ 3,570 $ 1,269 $ 428 $ 13,274 $ 18,541 Identifiable assets $ 574,220 $ 265,619 $ 247,830 $ 87,762 $ 1,175,431 Adjusted EBITDA $ 24,399 $ 14,663 $ 7,292 $ (8,793 ) Selected financial information of the Company’s segments for the six months ended April 30, 2018 and April 29, 2017, is as follows (in thousands): Six Months Ended April 30, 2018 Fire & Emergency Commercial Recreation Corporate and Other Consolidated Sales: Net Sales—External Customers $ 467,269 $ 290,234 $ 366,042 $ 245 $ 1,123,790 Net Sales—Intersegment $ — $ 8,082 $ 10,945 $ (19,027 ) $ — Depreciation and amortization $ 8,517 $ 5,572 $ 5,923 $ 2,106 $ 22,118 Capital expenditures $ 2,666 $ 2,265 $ 4,225 $ 14,467 $ 23,623 Identifiable assets $ 613,749 $ 287,998 $ 337,544 $ 119,374 $ 1,358,665 Adjusted EBITDA $ 39,943 $ 13,903 $ 20,826 $ (19,274 ) Six Months Ended April 29, 2017 Fire & Emergency Commercial Recreation Corporate and Other Consolidated Sales: Net Sales—External Customers $ 404,373 $ 289,745 $ 293,043 $ 1,092 $ 988,253 Net Sales—Intersegment $ — $ 2,980 $ 6,482 $ (9,462 ) $ — Depreciation and amortization $ 5,628 $ 3,678 $ 4,756 $ 1,212 $ 15,274 Capital expenditures $ 7,569 $ 2,068 $ 2,160 $ 25,368 $ 37,165 Identifiable assets $ 574,220 $ 265,619 $ 247,830 $ 87,762 $ 1,175,431 Adjusted EBITDA $ 41,112 $ 22,837 $ 10,065 $ (15,342 ) Provided below is a reconciliation of segment Adjusted EBITDA to net income (loss) before provision (benefit) for income taxes (in thousands): Three Months Ended Six Months Ended April 30, 2018 April 29, 2017 April 30, 2018 April 29, 2017 Fire & Emergency Adjusted EBITDA $ 21,788 $ 24,399 $ 39,943 $ 41,112 Commercial Adjusted EBITDA 9,530 14,663 13,903 22,837 Recreation Adjusted EBITDA 12,735 7,292 20,826 10,065 Corporate and Other Adjusted EBITDA (9,960 ) (8,793 ) (19,274 ) (15,342 ) Depreciation and amortization (11,101 ) (7,853 ) (22,118 ) (15,274 ) Interest expense, net (6,075 ) (3,416 ) (11,493 ) (10,893 ) Restructuring costs (1,936 ) (335 ) (5,989 ) (1,199 ) Transaction expenses (515 ) (1,861 ) (2,070 ) (2,239 ) Stock-based compensation expense (1,947 ) (311 ) (3,697 ) (25,817 ) Non-cash purchase accounting expense (33 ) (746 ) (668 ) (1,211 ) Sponsor expenses (120 ) (207 ) (315 ) (338 ) Loss on early extinguishment of debt — (11,920 ) — (11,920 ) Legal settlements (192 ) — (902 ) — Deferred purchase price payment (1,854 ) — (2,246 ) — Income (loss) before provision (benefit) benefit for income taxes $ 10,320 $ 10,912 $ 5,900 $ (10,219 ) |