Segment Information

12 Months Ended

Dec. 31, 2021

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company reports financial information based on the organizational structure used by the Company’s chief operating decision makers 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 makers review the financial results of both on a consolidated basis, and 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 cutting devices, measuring instruments and safety products for school, office, home, hardware, sporting and industrial use.

Domestic sales orders are filled primarily from the Company’s distribution centers and facilities in North Carolina, Washington, Massachusetts, Tennessee, Florida 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 product 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 9% and 10% of the Company’s total net sales in 2021 and 2020, respectively.

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 fiscal years ended December 31, 2021 and 2020:

Financial data by segment: 

(000’s omitted)

Year Ended December 31, 2021
	United States		Canada		Europe		Consolidated
Net sales	$	152,475	$	14,341	$	15,272	$	182,088
Operating income		9,521		1,893		1,356		12,770
Assets		125,521		9,100		9,818		144,439
Additions to property, plant and equipment		6,309		10		54		6,373
Depreciation and amortization		3,822		147		80		4,049

Year Ended December 31, 2020
	United States		Canada		Europe		Consolidated
Net sales	$	140,191	$	10,986	$	12,826	$	164,003
Operating income		8,872		1,332		1,209		11,413
Assets		113,831		7,432		8,605		129,868
Additions to property, plant and equipment		2,386		34		149		2,569
Depreciation and amortization		3,668		95		78		3,841

The following is a reconciliation of segment operating income to consolidated income before taxes:

	2021			2020
Total operating income	$	12,770		$	11,413
Interest expense, net		908			920
Other (income) expense		(3,313	)		666
Consolidated income before taxes	$	15,175		$	9,827

The table below presents revenue by geographic area. Revenues are attributed to countries based on location of the customer. 

Revenues	2021		2020
United States	$	151,205	$	138,921
International:
Canada		14,341		10,986
Europe		15,272		12,826
Other		1,270		1,270
Total International	$	30,883	$	25,082
Total Revenues	$	182,088	$	164,003