UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

For the quarterly period ended July 2, 2016April 1, 2017

OR

For the transition period from             to             

Commission File number 1-3834

CONTINENTAL MATERIALS CORPORATION

(Exact name of registrant as specified in its charter)

(312) 541-7200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 or the Exchange Act).  Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, $0.25 par value, shares outstanding at AugustMay 10, 2016: 1,673,167.2017: 1,682,167.

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

CONTINENTAL MATERIALS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

JULY 2, 2016APRIL 1, 2017 AND JANUARY 2,DECEMBER 31, 2016

(000’s omitted except share data)

CONTINENTAL MATERIALS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOMEOPERATIONS AND RETAINED EARNINGS

FOR THE THREE MONTHS ENDED JULYAPRIL 1, 2017 AND APRIL 2, 2016 AND JULY 4, 2015

(Unaudited)

(000’s omitted except per-share amounts)

CONTINENTAL MATERIALS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

FOR THE SIX MONTHS ENDED JULY 2, 2016 AND JULY 4, 2015

(Unaudited)

(000’s omitted except per-share amounts)

See notes to condensed consolidated financial statements

CONTINENTAL MATERIALS CORPORATION

SECURITIES AND EXCHANGE COMMISSION FORM 10-Q

NOTES TO THE QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

QUARTER ENDED JULY 2, 2016APRIL 1, 2017

(Unaudited)

1.    Basis of Presentation:

The unaudited interim condensed consolidated financial statements included herein are prepared pursuant to the Securities and Exchange Commission (the “Commission”) rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally accompanying the annual consolidated financial statements have been omitted. The condensed consolidated balance sheet of Continental Materials Corporation (the “Company”) as of January 2,December 31, 2016 has been derived from the audited consolidated balance sheet of the Company as of that date. The interim condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest annual report on Form 10-K. In the opinion of management, the condensed consolidated financial statements include all adjustments (none of which were other than normal recurring adjustments) necessary for a fair statement of the results for the interim periods and to ensure the financial statements are not misleading. Certain reclassifications have been made to the 20152016 consolidated financial statements to conform to the 20162017 presentation. The reclassifications had no effect on the consolidated results of operations, the net decrease in cash or the total assets, liabilities or shareholders’ equity of the Company.

2.    Income taxes are accounted for under the asset and liability method that requires deferred income taxes to reflect the future tax consequences attributable to differences between the tax and financial reporting bases of assets and liabilities. Deferred tax assets and liabilities recognized are based on the tax rates in effect in the year in which differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, based on available positive and negative evidence, it is “more likely than not” (greater than a 50% likelihood) that some or all of the net deferred tax assets will not be realized.

The Company has established a valuation reserve related to the carry-forward of all charitable contributions deductions arising from prior years and theas well as for a portion of contributions in 2016 that the Company believes it willCalifornia Enterprise Zone credit not expected to be unable to utilizeutilized prior to the expiration of their carry-forward periods.expiration. For Federal tax purposes, net operating losses can be carried forward for a period of 20 years while alternative minimum tax credits can be carried forward indefinitely. For state tax purposes, net operating losses can be carried forward for periods ranging from 5 to 20 years for the states that the Company is required to file in. California Enterprise Zone credits can be carried forward indefinitelyused through 2023 while Colorado credits can be carried forward for 7 years.

The Company’s income tax returns are subject to audit by the Internal Revenue Service (the “IRS”) and state tax authorities. The amounts recorded for income taxes reflect the Company’s tax positions based on research and interpretations of complex laws and regulations. The Company accrues liabilities related to uncertain tax positions taken or expected to be taken in its tax returns.

3.    Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheet:

Cash and Cash Equivalents: The carrying amount approximates fair value and was valued as Level 1.

Revolving Bank Loan Payable: Fair value is estimated based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities and determined through the use of a discounted cash flow model. The carrying amount of the Revolving Bank Loan Payable represents a reasonable estimate of the corresponding fair value as the Company’s debt is held at variable interest rates and was valued as Level 2.

There were no transfers between fair value measurement levels of any financial instruments in the current quarter.

4.    TheIn May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This new revenue standard creates a single source of revenue guidance for all companies in all industries and is more principles-based than current revenue guidance. Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of ASC 606. This standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and the Company implementedwill adopt the standard on January 1, 2018. While the Company has not completed its analysis of the impact of the provisions of this standard, assuming no change to the current terms of sales utilized by the Company, we do not expect a significant impact to the consolidated financial statements or disclosure.

In February 2016, the FASB issued ASU No. 2015-17, Income Taxes2016-02, Leases (Topic 740): Balance Sheet Classification of Deferred Taxes, which changes how deferred taxes are classified842). This new standard supersedes existing lease guidance to require lessees to recognize assets and liabilities on organizations’the balance sheets.sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The change has been appliedstandard will be effective for all periods presented.  The effect of implementation is to report a consolidated non current net asset of $3,329,000 and $3,149,000the Company in the condensedfirst quarter of 2019 and will be adopted using a modified retrospective approach. While we anticipate the adoption of ASU 2016-02 may have a significant impact on our consolidated balance sheets, asconsolidated statements of July 2, 2016operations and January 2, 2016, respectively.disclosures, we are unable to quantify the financial statement impact at this time.

There are no other significant prospective accounting pronouncements that are expected to have a material effect on the Company’s consolidated financial statements.

5.    Operating results for the first sixthree months of 20162017 are not necessarily indicative of performance for the entire year due to the seasonality of most of the Company’s products. Historically, sales of the Evaporative Cooling segment are higher in the first and second quarters, sales of the Concrete, Aggregates and Construction Supplies (CACS) segment are higher in the second and third quarters and sales of furnaces in the Heating and Cooling segment are higher in the third and fourth quarters. Sales of the Door segment are generally more evenly spread throughout the year.

6.    There is no difference in the calculation of basic and diluted earnings per share (EPS) for the three-month or six-month periods ended JulyApril 1, 2017 and April 2, 2016 and July 4, 2015 as the Company does not have any dilutive instruments.

7.    The Company operates primarily in two industry groups, Heating, Ventilation and Air Conditioning (HVAC) and Construction Products. The Company has identified two reportable segments within each of the industry groups: the Heating and Cooling segment and the Evaporative Cooling segment in the HVAC industry group and the CACS segment and the Door segment in the Construction Products industry group.

The Heating and Cooling segment primarily produces and sells gas-fired wall furnaces, console heaters and fan coils from the Company’s wholly-owned subsidiary, Williams Furnace Co. (WFC) of Colton, California. The Evaporative Cooling segment primarily produces and sells evaporative coolers from the Company’s wholly-owned subsidiary, Phoenix Manufacturing, Inc. (PMI) of Phoenix, Arizona. Sales of these two segments are nationwide, but are concentrated in the southwestern United States. Concrete, aggregates and construction supplies are offered from numerous locations along the Southern Front Range of Colorado operated by the Company’s wholly-owned

subsidiaries Castle Concrete Company and Transit Mix Concrete Co., of Colorado Springs and Transit Mix of Pueblo, Inc. of Pueblo, Colorado (the three companies collectively are referred to as TMC). The Door segment sells hollow metal and wood doors, door frames and related hardware, lavatory fixtures and electronic access and security systems from the Company’s wholly-owned subsidiary, McKinney Door and Hardware, Inc. (MDHI), which operates out of facilities in Pueblo and Colorado Springs, Colorado. Sales of these two segments are highly concentrated in the Southern Front Range of Colorado although door sales are also made throughout the United States.

In addition to the above reporting segments, an “Unallocated Corporate” classification is used to report the unallocated expenses of the corporate office which provides treasury, insurance and tax services as well as strategic

Company and Valco, Inc. (“Valco”) that calls for the payment of royalties over the life of the lease on an agreed 50,000,000 tons of sand and gravel reserves. In the suit the Company sought, among other things, to rescindreform the sand and gravel lease in regard to the agreed amount of sand and gravel reserves and to recover approximately $1,282,000 of royalty overpayments and $1,470,000included in other long-term assets. The Partial Summary Judgment Order resolved many of royaltiesthe Company’s claims in Valco’s favor, but the Company’s claim for the return of royalty overpayments made during the statutorily allowed period is still pending. During the third quarter of 2016, the Company recorded a $632,000 write-down representing the portion of the royalty overpayment paid prior to the statutorily allowed period because of litigation risk attendant to recovering that amount. On September 30, 2016 Valco filed a motion seeking to add three counterclaims alleging damages in excess of actual tons produced.$5,900,000. The sandCompany opposed Valco’s motion and gravel lease calledon December 9, 2016, Valco withdrew its motion to add counterclaims. The Company has asserted partial failure of consideration as a defense to Valco’s counterclaims for unpaid royalties because the consideration for the payments of a royalty onpromise to pay royalties was the 50,000,000 tons of sand and gravel reserves. Throughreserves that do not exist. The Company sought certification of the datePartial Summary Judgment Order because it and its legal counsel believe the court improperly resolved factual issues in its Partial Summary Judgment Order that should have been decided by a jury. The Company and its legal counsel believe there is a likelihood that some, or all, of cessationthe issues resolved by the Partial Summary Judgment Order may be reversed on appeal and remanded for trial by jury although there can be no assurance that an appeal will result in reversal. The Company paid royalties on approximately 17,700,000 tons, have been paid for, including the overpayments. After considerationoverpayments, of all facts and circumstances, including discussions with legal counsel, management concluded that no reserve was required to be recorded against the overpaid royalties nor was a liability required to be recorded for royalties related to the remaining 32,300,00050,000,000 tons of unmined sand and gravel.

9.    Identifiable amortizable intangible assets asgravel reserves through the end of July 2, 2016 includethe third quarter of 2014. The impact of these proceedings could have a restrictive land covenant and customer relationships. At July 2, 2016, these assets were collectively carried at  zero, net of $720,000 accumulated amortization. The pre-tax amortization expense for intangible assets during the quarter ended July 2, 2016 was $10,000 compared to $12,000 for the quarter ended July 4, 2015 and $21,000 and $23,000 for the six months ended July 2, 2016 and July 4, 2015, respectively.

Based upon the intangible assets recordedmaterial financial effect on the balance sheet at July 2, 2016, amortization expense afterCompany; however, the second quarterCompany does not believe that there is a reasonable basis for estimating the financial impact, if any, of 2016 will be zero.the final outcome of these proceedings and accordingly no accrual or reserve has been recorded in compliance with accounting principles generally accepted in the United States of America. On February 23, 2017, the Partial Summary Judgment Order was certified for immediate appeal, and all other claims, counterclaims and defenses were stayed pending the resolution of that appeal. The Company filed a notice of appeal on March 24, 2017. The appeal is currently pending.

10.9.  The Company issued a total of 12,000 shares to the eight eligible board members effective April 6, 2016March 8, 2017 as full payment for their 20162017 retainer fee. TheAs of April 2, 2016 the Company had not yet issued a total of 12,000 shares to the eight eligible board members effective January 15, 2015 as full payment for their 20152016 retainer fee. All shares were issued under the 2010 Non-Employee Directors Stock Plan.

11.10.  The Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) effective November 18, 2011. The Company entered intohas negotiated the FifthEighth Amendment to Credit Agreement effective March 20, 2015 andwhich, among other things, extends the Sixth Amendmentmaturity date from May 1, 2018 to Credit Agreement effective August 10, 2015. Effective March 24, 2016May 1, 2020. The Company is in the Company entered intoprocess of completing the Seventh Amendmentinternal documentation necessary to Credit Agreement.execute the Amendment. The Company had previously entered into fourseven separate amendments to the Credit Agreement. Cumulatively, the amendments were entered into by the Company to, among other things, (i) modify certain of the financial covenants, (ii) increaseadjust the amount of the Revolving Commitment, to $20,000,000, (iii) terminate the Term Loan Commitment upon the repayment in full of the outstanding principal balance (and accrued interest thereon) of the Term Loan, (iv) modify the Borrowing Base calculation to provide for borrowing availability in respect of new Capital Expenditures, (v) decrease the interest rates on the Revolving Loans, and (vi) extend the maturity date to May 1, 2018.and (vii) decrease the Letter of Credit fee rate. Borrowings under the Credit Agreement are secured by the Company’s accounts receivable, inventories, machinery, equipment, vehicles, certain real estate and the common stock of all of the Company’s subsidiaries. Borrowings under the Credit Agreement bear interest based on a London Interbank Offered Rate (LIBOR) or prime rate based option.

The Credit Agreement either limits or requires prior approval by the lender of additional borrowings, acquisition of stock of other companies, purchase of treasury shares and payment of cash dividends. Payment of accrued interest is due monthly or at the end of the applicable LIBOR period.

Definitions under the Credit Agreement as amended are as follows:

Outstanding funded revolving debt was $4,700,000$3,200,000 as of July 2, 2016April 1, 2017 compared to $6,200,000$2,000,000 as of January 2,December 31, 2016. The highest balance outstanding during the first sixthree months of 2017 and 2016 was $3,650,000 and 2015 was $7,500,000 and $6,800,000,$6,500,000, respectively. Average outstanding funded debt was $5,432,000$1,895,000 and $4,882,000$4,830,000 for the first sixthree months of 20162017 and 2015,2016, respectively. At July 2, 2016,April 1, 2017, the Company had outstanding letters of credit totaling $5,415,000.

11.  The Company is involved in litigation matters related to its business, principally product liability matters related to the gas-fired heating products and fan coil products in the Heating and Cooling segment. In the Company’s opinion, none of these proceedings, when concluded, will have a material adverse effect on the Company’s consolidated results of operations cash flows or financial condition as the Company has established adequate accruals for matters that are probable and estimable. The Company does not accrue estimated future legal costs related to the defense of theses matters but rather expenses legal costs as incurred. Additionally, see Note 8 for discussion of litigation regarding the Pueblo sand and gravel lease.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help investors understand the Company’s results of operations, financial condition and current business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report and the Company’s Annual Report on Form 10-K for the fiscal year ended January 2,December 31, 2016.

Company Overview

For an overview of the Company’s operations and operating structure, see Note 7 to the condensed consolidated financial statements contained in this Quarterly Report.

Liquidity and Capital Resources

Sales of the Company’s HVAC products are seasonal except for fan coils. Sales of furnaces, heaters and evaporative coolers are sensitive to weather conditions particularly during their respective peak selling seasons. Fan coil sales are, to a significant extent, dependent on commercial construction, particularly of hotels. Revenues in the CACS segment are primarily dependent on the level of construction activity along the Southern Front Range in Colorado. Sales for the Door segment are not as seasonal nor are they much affected by weather conditions. Historically, the Company has experienced operating losses during the first quarter except when the weather is mild and demand strong along the Southern Front Range. Operating results typically improve in the second and third quarters reflecting more favorable weather conditions in southern Colorado and the seasonal sales of the Evaporative Cooling segment. Fourth quarter results can vary based on weather conditions in Colorado as well as in the principal markets for the Company’s heating equipment. As expected, the Company reported an operating loss for the first quarter of 2017. For the first quarter of 2016 the Company reported an operating profit primarily due to the CACS segment which benefited from favorable weather and substantially higher fan coil sales.

The Company typically experiences operating cash flow deficits during the first half of the year reflecting operating results, the use of sales dating programs (extended payment terms) related to the Evaporative Cooling segment and payments of the prior year’s accrued incentive bonuses and Company profit-sharing contributions, if any. As a result, the Company’s borrowings against its revolving credit facility tend to peak during the second quarter and then decline over the remainder of the year.

Financing activities during the first sixthree months of 2017 provided $1,200,000 as borrowings were used to partially finance the increase in working capital. During the first three months of 2016 and 2015financing activities used $1,500,000 and $1,900,000, respectively$700,000 as available cash was used to pay down the revolving bank loan in both periods.loan. See also the discussion of the Revolving Credit and Term Loan Agreement below.

Revolving Credit and Term Loan Agreement

As discussed in Note 1110 to the condensed consolidated financial statements contained in this Quarterly Report, the Company maintains a Credit Agreement, which, as amended, provides for a Revolving Commitment of $20,000,000. Borrowings under the Credit Agreement are secured by the Company’s accounts receivable, inventories, machinery, equipment, vehicles, certain real estate and the common stock of all of the Company’s subsidiaries. Borrowings under the Revolving Commitment are limited to (a) 80% of eligible accounts receivable, (b) the lesser of 50% of eligible inventories and $8,500,000 plus (c) 80% of new Capital Expenditures not to exceed $5,500,000 in the aggregate with respect to each of Fiscal Year 2016 and 2017. Borrowings under the Credit Agreement bear interest based on a LIBOR or prime rate based option.

The Credit Agreement either limits or requires prior approval by the lender of additional borrowings, acquisition of stock of other companies, purchase of treasury shares and payment of cash dividends. Payment of accrued interest is due monthly or at the end of the applicable LIBOR period. The Credit Agreement has a maturity date of May 1, 2018.2020.

The Company’s outstanding borrowings against the revolving credit facility were $4,700,000$3,200,000 at July 2, 2016.April 1, 2017. At all times since the inception of the Credit Agreement, the Company has had sufficient qualifying and eligible assets such that the entire revolving credit facility was available to the Company. This situation is expected to continue for the foreseeable future.

As of July 2, 2016April 1, 2017 the Company was in compliance with all covenants in the Credit Agreement and expects to be in compliance with all loan covenants for the remaining term of the Credit Agreement. The Company believes that its existing cash balance, anticipated cash flow from operations and borrowings available under the Credit Agreement will be sufficient to cover expected cash needs, including planned capital expenditures, for the next twelve months except for the possibleexpenditures related to the acquisition of the necessary equipment needed to begin mining an aggregates property near Colorado Springs thatshould Transit Mix succeed in obtaining the Company has an option to purchase.required mining permits from the State of Colorado and El Paso County. The Company expects to arrange for term or mortgage financing to fund the purchaseacquisition of the necessary equipment needed to begin mining the property should it exercise its option.the permits be granted. The option, originally setCompany expects to expirebe in April 2016 has been verbally extended untilcompliance with all debt covenants, as amended, throughout the end of 2016.facility’s remaining term.

Results of Operations - Comparison of Quarter Ended July 2, 2016April 1, 2017 to the Quarter Ended July 4, 2015April 2, 2016

(In the ensuing discussions of the results of operations the Company defines the term gross profit as the amount determined by deducting cost of sales before depreciation, depletion and amortization from sales. The gross profit ratio is gross profit divided by sales.)

Consolidated sales in the secondfirst quarter of 20162017 were $42,721,000, an increase$34,103,000, a decrease of $7,856,000$125,000 or 22.5%less than 1% compared to the secondfirst quarter of 2015. Sales increased in all segments.2016. The CACS segment reported a 48.4% increase incurrent quarter sales in$1,284,000 higher than the secondfirst quarter of 2016 compared towhile the second quarterDoor segment was relatively constant with an increase of 2015 attributable to strengthening in both the

Consolidated selling and administrative expenses were $730,000$288,000 higher than the comparable prior year quarter.

However, asAs a percentage of consolidated sales, selling and administrative expenses decreased between quarters at 14.4% and 15.6% for 2016 and 2015, respectively.increased to 17.6% in the first quarter of 2017 from 16.7% in the first quarter of 2016.

Consolidated depreciation and amortization charges were consistent between quartersvirtually identical at $651,000 for each three month period.$639,000 in the first quarter of 2017 compared to $638,000 in the first quarter of 2016.

The consolidated operating incomeloss in the secondfirst quarter of 20162017 was $2,830,000$611,000 compared to $631,000 in the second quarter of the prior year. The majority of the improvement was seen in the CACS segment which reported a current quarterconsolidated operating income of $2,065,000$852,000 in the first quarter of 2016. All segments reported declines in operating results and are addressed in the discussion of segments below.

Interest income for the first quarter 2017 was $18,000 compared to an operating loss$15,000 for the first quarter of $128,0002016. Interest expense in the secondfirst quarter of 2015. The Evaporative Cooler and Door segments also reported improved operating income up $120,000 and $81,000, respectively. The Heating and Cooling segment reported a decline of $42,0002017 was $66,000 compared to $110,000 in operating income between the secondfirst quarter of 2016 and the same period in 2015.

Net interest2016. Interest expense includes interest on outstanding funded debt, finance charges on outstanding letters of credit, the fee on the unused revolving credit line and other recurring fees charged by the lending bank. NetThe decline from the prior year quarter is attributable to lower average borrowings and the capitalization of $24,000 of interest expenseassociated with the deferred development expenditures discussed in the second quarter of 2016 was $5,000 higher than the second quarter of 2015.Note 10. The weighted average interest rate on outstanding funded debt in the secondfirst quarter of 2016,2017, including the fee on the unused line of credit and other recurring bank charges but excluding finance charges on letters of credit, was approximately 5.5%8.1% compared to 5.3%4.9% in the secondfirst quarter of 2015. Average2016. The higher interest rate was due to the lower average outstanding funded debt of $1,895,000 during the first quarter of 2017 compared to $4,830,000 in the secondfirst quarter of 2016 was $5,583,000 compared to $5,433,000 in the second quarter of 2015.2016. At the end of the secondfirst quarter of 20162017 the outstanding funded debt was $4,700,000$3,200,000 compared to $3,900,000$5,500,000 at the end of the secondfirst quarter of 2015.2016.

The Company’s effective income tax rate reflects federal and state statutory income tax rates adjusted for non-deductible expenses, tax credits and other tax items. The estimated effective income tax rate in the secondfirst quarter of 20162017 was a benefit of 34.0% compared to 35.8%a provision of 34.0% for the secondfirst quarter of 2015.2016.

The Company operates four businesses in two industry groups. The businesses are generally seasonal, weather sensitive and subject to cyclical factors. The following addresses various aspects of operating performance focusing on the reportable segments within each of the two industry groups.

Construction Products

The table below presents a summary of operating information for the two reportable segments within the Construction Products industry group for the quarters ended JulyApril 1, 2017 and April 2, 2016 and July 4, 2015 (dollar amounts in thousands):