Annual report pursuant to Section 13 and 15(d)

Business Segments and Customer Information

v2.4.1.9
Business Segments and Customer Information
 12 Months Ended
Dec. 31, 2014
Business Segments and Customer Information [Abstract]  
Business Segments and Customer Information
 
(11)  Business Segments and Customer Information

Segment Information

Management of our business operations is conducted under four reportable operating segments:

Supply Chain Management Group – Our Supply Chain Management Group supplies vehicle parts primarily through a Managed Inventory Program ("MIP") direct sales to USPS and to other clients.

International Group - Our International Group provides engineering, industrial, logistics and foreign military sales services to the U.S. military and other government agencies.

Federal Group - Our Federal Group provides legacy equipment sustainment, engineering, technical, management, integrated logistics support and information technology services to DoD and other government agencies.

IT, Energy and Management Consulting Group – Our IT, Energy and Management Consulting Group provides technical and consulting services primarily to various civilian government agencies.

These segments operate under separate management teams and financial information is produced for each segment.  The entities within each of the International Group, Federal Group, and IT, Energy and Management Consulting Group reportable segments meet the aggregation of operating segments criteria as defined by the accounting standard for segment reporting.  We evaluate segment performance based on consolidated revenues and operating income. Net sales of our business segments exclude intersegment sales as these activities are eliminated in consolidation.  Beginning with the second quarter of 2013, we no longer allocate interest to our reportable segments.

Our segment information is as follows (in thousands):

For the years ended December 31,
  
   
   
 
   
2014
    
2013
    
2012
  
Revenues:
  
   
   
 
Supply Chain Management Group
  
$
172,482
    
$
154,702
    
$
143,014
  
International Group
    
106,369
      
146,908
      
167,193
  
Federal Group
    
84,392
      
95,435
      
142,323
  
IT, Energy and Management Consulting Group
    
60,828
      
74,593
      
94,225
  
Total revenues
  
$
424,071
    
$
471,638
    
$
546,755
  
                         
Operating income:
                        
Supply Chain Management Group
  
$
29,694
    
$
27,299
    
$
24,014
  
International Group
    
3,795
      
7,069
      
6,052
  
Federal Group
    
(343
)
    
2,400
      
10,418
  
IT, Energy and Management Consulting Group
    
6,634
      
9,061
      
11,816
  
Corporate
    
(2,850
)
    
(1,726
)
    
(1,224
)
Operating income
  
$
36,930
    
$
44,103
    
$
51,076
  
                         
Depreciation and amortization expense:
                        
Supply Chain Management Group
  
$
5,373
    
$
4,265
    
$
9,891
  
International Group
    
5,713
      
7,323
      
3,035
  
Federal Group
    
5,607
      
6,033
      
3,116
  
IT, Energy and Management Consulting Group
    
2,077
      
2,387
      
3,753
  
Total depreciation and amortization
  
$
18,770
    
$
20,008
    
$
19,795
  
                         
Capital expenditures:
                        
Supply Chain Management Group
  
$
2,524
    
$
895
    
$
341
  
International Group
    
-
      
236
      
83
  
Federal Group
    
230
      
1,211
      
763
  
IT, Energy and Management Consulting Group
    
199
      
71
      
53
  
Corporate
    
461
      
2,003
      
19,623
  
Total capital expenditures
  
$
3,414
    
$
4,416
    
$
20,863
  
 
 
  
December 31,
  
 
  
2014
    
2013
  
Total assets:
  
   
 
Supply Chain Management Group
  
$
192,720
    
$
185,976
  
International Group
    
17,235
      
33,355
  
Federal Group
    
18,990
      
20,846
  
IT, Energy and Management Consulting Group
    
49,790
      
57,610
  
Corporate
    
76,595
      
82,742
  
Total assets
  
$
355,330
    
$
380,529
  

Revenues are net of inter-segment eliminations.  Corporate/unallocated expenses are primarily selling, general and administrative expenses not allocated to segments.  Corporate assets are primarily cash and property and equipment.

Customer Information

Our revenues are derived from contract services performed for DoD agencies or federal civilian agencies and from the delivery of products to our clients. The USPS, U.S. Army and Army Reserve, and U.S. Navy are our largest customers. Our customers also include various other government agencies and commercial entities. Our revenue by customer is as follows for the years ended December 31, (in thousands):

Revenues by Customer
(dollars in thousands)
Years ended December 31,
  
Customer
  
2014
    
%
    
2013
    
%
    
2012
    
%
  
U.S. Army/Army Reserve
  
$
101,714
      
24.0
%
  
$
101,736
      
21.6
%
  
$
182,412
      
33.4
%
U.S. Navy
    
88,007
      
20.7
%
    
123,307
      
26.1
%
    
120,867
      
22.1
%
U.S. Air Force
    
3,323
      
0.8
%
    
3,625
      
0.8
%
    
6,963
      
1.3
%
Total - DoD
    
193,044
      
45.5
%
    
228,668
      
48.5
%
    
310,242
      
56.8
%
 
                                                
U.S. Postal Service
    
167,268
      
39.4
%
    
142,203
      
30.1
%
    
130,866
      
23.9
%
Department of Energy
    
19,000
      
4.5
%
    
20,124
      
4.3
%
    
20,898
      
3.8
%
Department of Treasury
    
10,897
      
2.6
%
    
35,929
      
7.6
%
    
33,369
      
6.1
%
Department of Interior
    
1,431
      
0.3
%
    
1,545
      
0.3
%
    
16,884
      
3.1
%
Other government
    
28,751
      
6.8
%
    
40,919
      
8.7
%
    
32,231
      
5.9
%
Total – Federal civilian agencies
    
227,347
      
53.6
%
    
240,720
      
51.0
%
    
234,248
      
42.8
%
 
                                                
Commercial
    
3,680
      
0.9
%
    
2,250
      
0.5
%
    
2,265
      
0.4
%
 
                                                
Total
  
$
424,071
      
100.0
%
  
$
471,638
      
100.0
%
  
$
546,755
      
100.0
%

We do not measure revenue or profit by product or service lines, either for internal management or external financial reporting purposes, because it would be impractical to do so. Products offered and services performed are determined by contract requirements and the types of products and services provided for one contract bear no relation to similar products and services provided on another contract. Products and services provided vary when new contracts begin or current contracts expire. In many cases, more than one product or service is provided under a contract or contract task order. Accordingly, cost and revenue tracking is designed to best serve contract requirements and segregating costs and revenues by product or service lines in situations for which it is not required would be difficult and costly to both us and our customers.