v3.25.2
Information on Segments
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Information on Segments INFORMATION ON SEGMENTS
Our Chief Executive Officer is our Chief Operating Decision Maker ("CODM") who reviews financial information for each of our three operating segments, consisting of Installation, Distribution and Manufacturing, for the purpose of assessing business performance, managing the business and allocating resources.
Our Installation operating segment represents the majority of our net revenue and gross profit and forms our one reportable segment. This operating segment represents the service-based installation of insulation and complementary building products in the residential new construction, repair and remodel and commercial construction end markets from our national network of branch locations. These branch locations have similar economic and operating characteristics including the nature of products and services offered, operating procedures and risks, customer bases, employee incentives, material procurement and shared corporate resources which led us to conclude that they combine to form one operating segment.
The Other category reported below reflects the operations of our two remaining operating segments, Distribution and Manufacturing, which do not meet the quantitative thresholds for separate reporting. Our Distribution operating segment includes our distribution businesses that sell insulation, gutters and accessories primarily to installers of these products who operate in multiple end markets. Our Manufacturing operating segment consists of our manufacturing operation which produces cellulose insulation and asphalt and industrial fibers to sell to distributors and installers of these products.
The Installation reportable segment includes substantially all of our net revenue from services while net revenue included in the Other category includes substantially all of our net revenue from sales of products. The intercompany sales from the Other category to the Installation reportable segment include a profit margin while our Installation segment records these transactions at cost. These transactions are shown in the reconciliation of revenue and segment gross profit below.
The key metrics used by our CODM to assess performance, review results and allocate resources of our operating segments are revenue and segment gross profit. Our CODM reviews segment gross profit for each of our segments separately and uses this metric to guide operating decisions and business strategy. We define segment gross profit as revenue less cost of sales, excluding depreciation and amortization. We do not report depreciation and amortization expenses included in reported cost of sales, operating expenses or other expense, net, or total assets by segment because our CODM does not regularly receive or use
this information. The following tables represent our segment information for the three and six months ended June 30, 2025 and 2024 (in millions):
Three months ended June 30,Six months ended June 30,
Installation Segment
2025202420252024
Revenue$715.6 $697.3 $1,362.8 $1,353.2 
Cost of sales (1)
450.1 443.1 867.8 862.4 
Segment gross profit$265.5 $254.2 $495.0 $490.8 
Segment gross profit percentage37.1 %36.5 %36.3 %36.3 %
(1)Cost of sales included in the Installation segment gross profit is exclusive of depreciation and amortization for the three and six months ended June 30, 2025 and 2024.
The reconciliation of Installation revenue and segment gross profit for each period as shown in the table above to consolidated net revenue and income before income taxes is as follows (in millions):
Three months ended June 30,Six months ended June 30,
2025202420252024
Reconciliation of revenue:
Installation segment revenue$715.6 $697.3 $1,362.8 $1,353.2 
Other revenue (1)
56.7 44.0 100.6 84.3 
Elimination of inter-segment revenue(12.0)(3.7)(18.3)(7.0)
Total consolidated net revenue$760.3 $737.6 $1,445.1 $1,430.5 
Reconciliation of segment gross profit:
Installation segment gross profit$265.5 $254.2 $495.0 $490.8 
Other gross profit (1)
13.0 11.5 24.3 23.3 
Elimination of inter-segment gross profit(3.4)(0.9)(5.3)(1.9)
Less:
Depreciation and amortization15.2 13.4 30.4 26.3 
Total consolidated gross profit, as reported259.9 251.4 483.6 485.9 
Operating expenses158.9 156.6 312.8 303.2 
Operating income 101.0 94.8 170.8 182.7 
Other expense, net7.6 8.1 16.1 19.6 
Income before income taxes$93.4 $86.7 $154.7 $163.1 
(1)Other revenue and other gross profit include the remaining two operating segments, Distribution and Manufacturing before inter-segment eliminations. These operating segments are each below the quantitative thresholds for being reported as a reportable segment for the three and six months ended June 30, 2025 and 2024.