Segment Information

12 Months Ended

Dec. 31, 2022

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 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 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, California and New Hampshire. 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 8% and 9% of the Company’s total net sales in 2022 and 2021, 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, 2022 and 2021:

Financial data by segment: 

(000’s omitted)

Year Ended December 31, 2022
	United States		Canada		Europe		Consolidated
Net sales	$	165,205	$	13,779	$	14,978	$	193,962
Operating income		4,783		1,136		354		6,273
Assets		144,466		9,078		10,833		164,377
Additions to property, plant and equipment		4,174		52		79		4,305
Depreciation and amortization		4,398		96		84		4,578

Year Ended December 31, 2021
(000's omitted)	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

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

(000’s omitted)

	2022		2021
Total operating income	$	6,273	$	12,770
Interest expense, net		2,364		908
Other expense (income)		247		(3,313	)
Consolidated income before taxes	$	3,662	$	15,175

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

(000’s omitted)

Revenues	2022		2021
United States	$	163,546	$	151,205
International:
Canada		13,779		14,341
Europe		14,978		15,272
Other		1,659		1,270
Total International	$	30,416	$	30,883
Total Revenues	$	193,962	$	182,088