Annual report pursuant to Section 13 and 15(d)

Business Segments and Customer Information

v3.3.1.900
Business Segments and Customer Information
 12 Months Ended
Dec. 31, 2015
Business Segments and Customer Information [Abstract]  
Business Segments and Customer Information
(12)  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") and direct sales to the United States Postal Service ("USPS") and to other customers.

Aviation Group - Our Aviation Group, formed in January 2015 when we completed the Aviation Acquisition, provides MRO services, parts supply and distribution, and supply chain solutions for general aviation jet aircraft engines and engine accessories.

Federal Services Group - Our Federal Services Group provides engineering, industrial, logistics, foreign military sales, and legacy equipment sustainment services to the United States Department of Defense ("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 DoD and civilian government agencies.

These segments operate under separate management teams and financial information is produced for each segment.  The entities within the IT, Energy and Management Consulting Group reportable segment 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.

Our segment information is as follows (in thousands):

For the years ended December 31,
            
   
2015
    
2014
    
2013
  
Revenues
            
  Supply Chain Management Group
  
$
196,772
    
$
172,482
    
$
154,702
  
  Aviation Group
    
119,729
      
-
      
-
  
  Federal Services Group
    
166,973
      
190,761
      
242,343
  
  IT, Energy and Management Consulting Group
    
50,508
      
60,828
      
74,593
  
    Total revenues
  
$
533,982
    
$
424,071
    
$
471,638
  
                         
Operating income:
                        
  Supply Chain Management Group
  
$
35,453
    
$
29,694
    
$
27,299
  
  Aviation Group
    
10,635
      
-
      
-
  
  Federal Services Group
    
2,071
      
3,452
      
9,469
  
  IT, Energy and Management Consulting Group
    
4,731
      
6,634
      
9,061
  
  Corporate
    
(2,351
)
    
(2,850
)
    
(1,726
)
    Operating income
  
$
50,539
    
$
36,930
    
$
44,103
  
                         
Depreciation and amortization expense:
                        
  Supply Chain Management Group
  
$
7,074
    
$
5,373
    
$
4,265
  
  Aviation Group
    
5,865
      
-
      
-
  
  Federal Services Group
    
10,635
      
11,320
      
13,356
  
  IT, Energy and Management Consulting Group
    
1,967
      
2,077
      
2,387
  
    Total depreciation and amortization
  
$
25,541
    
$
18,770
    
$
20,008
  
                         
Capital expenditures:
                        
  Supply Chain Management Group
  
$
7,544
    
$
2,524
    
$
895
  
  Aviation Group
    
959
      
-
      
-
  
  Federal Services Group
    
78
      
230
      
1,447
  
  IT, Energy and Management Consulting Group
    
16
      
199
      
71
  
  Corporate
    
1,965
      
461
      
2,003
  
    Total capital expenditures
  
$
10,562
    
$
3,414
    
$
4,416
  

   
December 31,
  
   
2015
    
2014
  
Total assets:
        
  Supply Chain Management Group
  
$
189,654
    
$
192,720
  
  Aviation Group
    
264,160
      
-
  
  Federal Services Group
    
38,626
      
36,225
  
  IT, Energy and Management Consulting Group
    
47,107
      
49,790
  
  Corporate
    
82,587
      
76,595
  
    Total assets
  
$
622,134
    
$
355,330
  

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
  
2015
    
%
    
2014
    
%
    
2013
    
%
  
U. S. Postal Service
  
$
184,876
      
34.6
    
$
167,268
      
39.4
    
$
142,203
      
30.1
  
                                                 
U.S. Army
    
80,086
      
15.0
      
101,714
      
24.0
      
101,736
      
21.6
  
U.S. Navy
    
98,887
      
18.5
      
88,007
      
20.7
      
123,307
      
26.1
  
U.S. Air Force
    
3,558
      
0.7
      
3,323
      
0.8
      
3,625
      
0.8
  
Total - DoD
    
182,531
      
34.2
      
193,044
      
45.5
      
228,668
      
48.5
  
                                                 
Commercial Aviation
    
119,729
      
22.4
      
-
      
-
      
-
      
-
  
Other Commercial
    
4,653
      
0.9
      
3,680
      
0.9
      
2,250
      
0.5
  
Total - Commercial
    
124,382
      
23.3
      
3,680
      
0.9
      
2,250
      
0.5
  
                                                 
Department of Energy
    
16,020
      
3.0
      
19,000
      
4.5
      
20,124
      
4.3
  
Social Security Administration
    
9,666
      
1.8
      
10,153
      
2.4
      
12,981
      
2.8
  
Department of Treasury
    
1,405
      
0.3
      
10,897
      
2.6
      
35,929
      
7.6
  
Other Government
    
15,102
      
2.8
      
20,029
      
4.7
      
29,483
      
6.2
  
Total - Other Civilian Agencies
    
42,193
      
7.9
      
60,079
      
14.2
      
98,517
      
20.9
  
                                                 
Total
  
$
533,982
      
100.0
    
$
424,071
      
100.0
    
$
471,638
      
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.