Annual report pursuant to Section 13 and 15(d)

Business Segments and Customer Information

v3.6.0.2
Business Segments and Customer Information
 12 Months Ended
Dec. 31, 2016
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]  
Business Segments and Customer Information
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 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,
 
 
 
 
 
 
2016
 
2015
 
2014
Revenues
 
 
 
 
 
Supply Chain Management Group
$
205,475

 
$
196,772

 
$
172,482

Aviation Group
133,466

 
119,729

 
—

Federal Services Group
306,109

 
166,973

 
190,761

IT, Energy and Management Consulting Group
46,740

 
50,508

 
60,828

Total revenues
$
691,790

 
$
533,982

 
$
424,071

 
 
 
 
 
 
Operating income:
 

 
 

 
 

Supply Chain Management Group
$
34,632

 
$
35,453

 
$
29,694

Aviation Group
12,823

 
10,635

 
—

Federal Services Group
4,185

 
2,071

 
3,452

IT, Energy and Management Consulting Group
3,611

 
4,731

 
6,634

Corporate
(3,722
)
 
(2,351
)
 
(2,850
)
Operating income
$
51,529

 
$
50,539

 
$
36,930

 
 
 
 
 
 
Depreciation and amortization expense:
 

 
 

 
 

Supply Chain Management Group
$
6,445

 
$
7,074

 
$
5,373

Aviation Group
5,461

 
5,865

 
—

Federal Services Group
12,752

 
10,635

 
11,320

IT, Energy and Management Consulting Group
1,388

 
1,967

 
2,077

Total depreciation and amortization
$
26,046

 
$
25,541

 
$
18,770

 
 
 
 
 
 
Capital expenditures:
 

 
 

 
 

Supply Chain Management Group
$
4,195

 
$
7,544

 
$
2,524

Aviation Group
1,459

 
959

 
—

Federal Services Group
85

 
78

 
230

IT, Energy and Management Consulting Group
9

 
16

 
199

Corporate
1,624

 
1,965

 
461

Total capital expenditures
$
7,372

 
$
10,562

 
$
3,414


 
December 31,
 
2016
 
2015
Total assets:
 
 
 
Supply Chain Management Group
$
185,004

 
$
188,352

Aviation Group
291,500

 
263,226

Federal Services Group
60,506

 
38,772

IT, Energy and Management Consulting Group
47,043

 
47,000

Corporate
77,786

 
80,004

Total assets
$
661,839

 
$
617,354



Revenues are net of inter-segment eliminations. Corporate expenses are primarily selling, general and administrative expenses not allocated to segments. Included in our Corporate expenses for 2016 is a charge of approximately $3.3 million for the settlement of the Heritage Litigation offset by a gain of approximately $1.4 million resulting primarily from the Maritime Administration contract close-outs. 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
Years ended December 31,
Customer
 
2016
 
%
 
2015
 
%
 
2014
 
%
U. S. Postal Service
 
$
181,215

 
26.2
 
$
184,876

 
34.6
 
$
167,268

 
39.4
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Navy
 
190,155

 
27.5
 
98,887

 
18.5
 
88,007

 
20.7
U.S. Army
 
139,764

 
20.2
 
80,086

 
15.0
 
101,714

 
24.0
U.S. Air Force
 
3,482

 
0.5
 
3,558

 
0.7
 
3,323

 
0.8
Total - DoD
 
333,401

 
48.2
 
182,531

 
34.2
 
193,044

 
45.5
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Aviation
 
131,067

 
19.0
 
119,729

 
22.4
 
—

 
—
Other Commercial
 
10,721

 
1.5
 
4,653

 
0.9
 
3,680

 
0.9
Total - Commercial
 
141,788

 
20.5
 
124,382

 
23.3
 
3,680

 
0.9
 
 
 
 
 
 
 
 
 
 
 
 
 
Department of Energy
 
11,708

 
1.7
 
16,020

 
3.0
 
19,000

 
4.5
Social Security Administration
 
9,762

 
1.4
 
9,666

 
1.8
 
10,153

 
2.4
Other Government
 
13,916

 
2.0
 
16,507

 
3.1
 
30,926

 
7.3
Total - Other Civilian Agencies
 
35,386

 
5.1
 
42,193

 
7.9
 
60,079

 
14.2
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
691,790

 
100.0
 
$
533,982

 
100.0
 
$
424,071

 
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.

Geographical Information

Revenue by geography is based on the billing address of the customer. Our revenue by geographic area is as follows (in thousands):
 
 
Years ended December 31,
 
 
2016
 
2015
 
2014
United States
 
$
638,726

 
$
481,466

 
$
422,519

Other Countries (1)
 
53,064

 
52,516

 
1,552

Total revenue
 
$
691,790

 
$
533,982

 
$
424,071

(1) No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.