Business and Geographic Segments

12 Months Ended

Dec. 31, 2013

Business and Geographic Segments

Note 3 – Business and geographic segments:

Our operating segments are defined as components of our continuing operations about which separate financial information is available that is regularly evaluated by our chief operating decision maker in determining how to allocate resources and in assessing performance.  At December 31, 2013, we had two operating segments – Security Products and Marine Components.  In December 2012, we sold our Furniture Components segment.  See Note 2.

The Security Products segment, with a facility in South Carolina and a facility shared with Marine Components in Illinois, manufactures locking mechanisms and other security products for sale to the transportation, postal, office and institutional furniture, cabinetry, tool storage, healthcare and other industries.

Our Marine Components segment, with a facility in Wisconsin and a facility shared with Security Products in Illinois, manufactures and distributes stainless steel exhaust systems, gauges and throttle controls primarily for recreational boats.

The chief operating decision maker evaluates segment performance based on segment operating income, which is defined as income before income taxes and interest expense, exclusive of certain general corporate income and expense items (primarily interest income) and certain non-recurring items (such as gains or losses on the disposition of business units and other long-lived assets outside the ordinary course of business).  The accounting policies of the reportable operating segments are the same as those described in Note 1. Capital expenditures include additions to property and equipment, but exclude amounts attributable to business combinations.

Segment assets are comprised of all assets attributable to the reportable segments.  Corporate assets are not attributable to the operating segments and consist primarily of cash (including cash generated from the sale of disposed operations in December 2012), cash equivalents, notes receivable and assets held for sale.  See Note 7. For geographic information, the point of origin (place of manufacture) for all net sales is the U.S., the point of destination for net sales is based on the location of the customer, and property and equipment are attributable to their physical location. Intersegment sales are not material.

	Years ended December 31,
	2011			2012			2013
	(In thousands)
Net sales:
Security Products	$	71,397		$	73,715		$	81,510
Marine Components		8,418			9,481			10,535
Total	$	79,815		$	83,196		$	92,045
Operating income (loss):
Security Products	$	14,361		$	14,143		$	16,142
Marine Components		(1,223	)		(819	)		(148	)
Corporate		(6,726	)(a)		(7,906	)(a)		(6,666	)
Total operating income		6,412			5,418			9,328
Other non-operating income, net		358			-			40
Interest expense		(722	)		(479	)		(127	)
Income from continuing operations before income taxes	$	6,048		$	4,939		$	9,241

(a) Corporate operating expenses include write-downs and loss on the disposal of certain assets held for sale of $1.1 in 2011 and $1.2 million in 2012. See Note 7.

	Years ended December 31,
	2011		2012		2013
	(In thousands)
Depreciation and amortization:
Security Products	$	2,976	$	2,618	$	2,460
Furniture Components*		2,853		2,404		-
Marine Components		907		687		741
Corporate		42		63		69
Total	$	6,778	$	5,772	$	3,270
Capital expenditures:
Security Products	$	1,714	$	2,029	$	3,171
Furniture Components*		1,333		1,721		-
Marine Components		112		713		310
Corporate		36		14		20
Total	$	3,195	$	4,477	$	3,501

	Years ended December 31,
	2011		2012		2013
	(In thousands)
Net sales point of destination:
United States	$	75,594	$	78,268	$	87,307
Canada		1,982		2,194		2,195
Mexico		1,060		1,249		1,129
Other		1,179		1,485		1,414
Total	$	79,815	$	83,196	$	92,045
Total assets:
Security Products	$	69,185	$	69,143	$	69,918
Furniture Components*		50,174		-		-
Marine Components		10,531		9,689		9,782
Corporate and eliminations		11,636		71,351		41,978
Total	$	141,526	$	150,183	$	121,678
Net property and equipment:
United States	$	33,704	$	33,727	$	33,752
Canada*		9,681		-		-
Taiwan*		7,742		-		-
Total	$	51,127	$	33,727	$	33,752

* Denotes disposed operations.  See Note 2.