Segment Information

3 Months Ended

Mar. 31, 2024

Segment Information [Abstract]

Segment Information

5. Segment Information

The Company reports financial information based on the organizational structure used by the Company’s chief operating decision maker for making operating and investment decisions and for assessing performance. The Company’s reportable business segments consist of: (1) United States; (2) Canada; and (3) Europe. As described below, the activities of the Company’s Asian operations are closely linked to those of the U.S. operations; accordingly, the Company’s chief operating decision maker reviews the financial results of both, on a consolidated basis, and as such, the results of the Asian operations have been aggregated with the results of the United States operations to form one reportable segment called the “United States segment” or “U.S. segment”. Each reportable segment derives its revenue from the sales of first aid and medical products, cutting and sharpening devices and measuring instruments for school, office, home, hardware, sporting and industrial use.

Domestic sales orders are filled primarily from the Company’s distribution centers in North Carolina, Washington, Massachusetts, Tennessee, Florida, New Hampshire and California. The Company is responsible for the costs of shipping, insurance, customs clearance, duties, storage and distribution related to such products. Orders filled from the Company’s inventory are generally for less than container-sized lots.

Direct import sales are products sold by the Company’s Asian subsidiary, directly to major U.S. retailers, who take ownership of the products in Asia. These sales are completed by delivering products to the customers’ common carriers at the shipping points in Asia. Direct import sales are made in larger quantities than domestic sales, typically full containers. Direct import sales represented approximately 8% of the Company’s total net sales for the three months ended March 31, 2024 compared to 6% for the same period in 2023.

The chief operating decision maker evaluates the performance of each operating segment based on segment revenues and operating income. Segment revenues are defined as total revenues, including both external customer revenue and inter-segment revenue. Segment operating earnings are defined as segment revenues, less cost of goods sold and operating expenses. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Inter-segment amounts are eliminated to arrive at consolidated financial results.

The following table sets forth certain financial data by segment for the three months ended March 31, 2024 and 2023:

Financial data by segment:

(in thousands)

	Three Months Ended March 31,
Sales to external customers:	2024			2023
United States	$	37,991		$	38,853
Canada		3,039			3,257
Europe		3,926			3,728
Consolidated	$	44,956		$	45,838
Operating income:
United States	$	2,339		$	1,781
Canada		39			217
Europe		180			190
Consolidated	$	2,558		$	2,188
Interest expense, net		443			902
Other income, net		(44	)		(23	)
Consolidated income before income taxes	$	2,159		$	1,309

Assets by segment:

(in thousands)

	March 31,		December 31,
	2024		2023
United States	$	139,228	$	131,382
Canada		11,094		8,557
Europe		9,059		9,302
Consolidated	$	159,381	$	149,241