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BUSINESS SEGMENTS
12 Months Ended
Dec. 31, 2011
BUSINESS SEGMENTS  
BUSINESS SEGMENTS

(8)       BUSINESS SEGMENTS

 

Our business is organized in the following three segments:  Explosive Metalworking, Oilfield Products, and AMK Welding. The Explosive Metalworking segment uses explosives to perform metal cladding and shock synthesis of industrial diamonds. The most significant product of this group is clad metal which is used in the fabrication of pressure vessels, heat exchangers, and transition joints for various industries, including upstream oil and gas, oil refinery, petrochemicals, hydrometallurgy, aluminum production, shipbuilding, power generation, industrial refrigeration, and similar industries.  The Oilfield Products segment manufactures, markets and sells oilfield perforating equipment and explosives, including detonating cords, detonators, bi-directional boosters and shaped charges, and seismic related explosives and accessories.  AMK Welding utilizes a number of welding technologies to weld components for manufacturers of jet engine and ground-based turbines.

 

The accounting policies of all the segments are the same as those described in the summary of significant accounting policies.  Our reportable segments are separately managed strategic business units that offer different products and services. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies.

 

Beginning in 2011, we changed our methodology of allocating corporate overhead to our business segments.  In connection with this change, we no longer allocate certain corporate expenses that do not directly benefit our business segments.  The business segment disclosure for the years ended December 31, 2010 and 2009 presented below reflects our new allocation methodology.

 

Segment information is presented for the years ended December 31, 2011, 2010 and 2009 as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Explosive

 

Oilfield

 

AMK

 

 

 

 

 

Metalworking

 

Products

 

Welding

 

Total

 

As of and for the year ended December 31, 2011:

 

 

 

 

 

 

 

 

 

Net sales

 

$

126,199

 

$

72,782

 

$

9,910

 

$

208,891

 

Depreciation and amortization

 

$

5,833

 

$

4,877

 

$

489

 

$

11,199

 

Income from operations

 

$

16,058

 

$

6,188

 

$

2,056

 

$

24,302

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

Corporate expenses

 

 

 

 

 

 

 

(2,686

)

Stock-based compensation

 

 

 

 

 

 

 

(3,397

)

Other income

 

 

 

 

 

 

 

528

 

Interest expense

 

 

 

 

 

 

 

(1,945

)

Interest income

 

 

 

 

 

 

 

8

 

Consolidated income before income taxes

 

 

 

 

 

 

 

$

16,810

 

Segment assets

 

$

102,473

 

$

92,070

 

$

6,006

 

$

200,549

 

Assets not allocated to segments:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

5,276

 

Prepaid expenses and other assets

 

 

 

 

 

 

 

5,647

 

Deferred tax assets

 

 

 

 

 

 

 

1,954

 

Consolidated total assets

 

 

 

 

 

 

 

$

213,426

 

Capital expenditures

 

$

4,338

 

$

2,904

 

$

484

 

$

7,726

 

 

 

 

Explosive

 

Oilfield

 

AMK

 

 

 

 

 

Metalworking

 

Products

 

Welding

 

Total

 

As of and for the year ended December 31, 2010:

 

 

 

 

 

 

 

 

 

Net sales

 

$

98,570

 

$

45,332

 

$

10,837

 

$

154,739

 

Depreciation and amortization

 

$

5,891

 

$

4,351

 

$

471

 

$

10,713

 

Income from operations

 

$

7,461

 

$

2,426

 

$

2,617

 

$

12,504

 

Equity in earnings of joint ventures

 

$

—

 

$

255

 

$

—

 

255

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

Corporate expenses

 

 

 

 

 

 

 

(2,214

)

Stock-based compensation

 

 

 

 

 

 

 

(3,501

)

Other income

 

 

 

 

 

 

 

2,316

 

Interest expense

 

 

 

 

 

 

 

(3,046

)

Interest income

 

 

 

 

 

 

 

74

 

Consolidated income before income taxes

 

 

 

 

 

 

 

$

6,388

 

Segment assets

 

$

96,344

 

$

89,169

 

$

5,403

 

$

190,916

 

Assets not allocated to segments:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

4,572

 

Prepaid expenses and other assets

 

 

 

 

 

 

 

4,600

 

Deferred tax assets

 

 

 

 

 

 

 

1,305

 

Consolidated total assets

 

 

 

 

 

 

 

$

201,393

 

Capital expenditures

 

$

2,407

 

$

832

 

$

288

 

$

3,527

 

 

 

 

Explosive

 

Oilfield

 

AMK

 

 

 

 

 

Metalworking

 

Products

 

Welding

 

Total

 

As of and for the year ended December 31, 2009:

 

 

 

 

 

 

 

 

 

Net sales

 

$

134,096

 

$

21,764

 

$

9,038

 

$

164,898

 

Depreciation and amortization

 

$

5,988

 

$

3,662

 

$

456

 

$

10,106

 

Income (loss) from operations

 

$

23,301

 

$

(3,074

)

$

1,671

 

$

21,898

 

Equity in earnings of joint ventures

 

$

—

 

$

221

 

$

—

 

221

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

Corporate expenses

 

 

 

 

 

 

 

(2,235

)

Stock-based compensation

 

 

 

 

 

 

 

(3,425

)

Other expense

 

 

 

 

 

 

 

(219

)

Interest expense

 

 

 

 

 

 

 

(3,473

)

Interest income

 

 

 

 

 

 

 

216

 

Consolidated income before income taxes

 

 

 

 

 

 

 

$

12,983

 

Segment assets

 

$

114,501

 

$

76,325

 

$

5,715

 

$

196,541

 

Assets not allocated to segments:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

22,411

 

Prepaid expenses and other assets

 

 

 

 

 

 

 

3,840

 

Deferred tax assets

 

 

 

 

 

 

 

2,384

 

Consolidated total assets

 

 

 

 

 

 

 

$

225,176

 

Capital expenditures

 

$

3,017

 

$

743

 

$

157

 

$

3,917

 

 

The geographic location of our property, plant and equipment, net of accumulated depreciation, is as follows:

 

 

 

As of December 31,

 

 

 

2011

 

2010

 

2009

 

United States

 

$

21,810

 

$

20,784

 

$

21,393

 

Germany

 

9,924

 

9,234

 

10,388

 

France

 

5,767

 

5,742

 

6,402

 

Canada

 

2,339

 

2,145

 

2,311

 

Rest of the world

 

1,562

 

1,901

 

1,558

 

 

 

 

 

 

 

 

 

Total

 

$

41,402

 

$

39,806

 

$

42,052

 

 

All of our sales are from products shipped from our manufacturing facilities and distribution centers located in the United States, Germany, France, Canada, Sweden (subsequently closed during 2011), Russia and Kazakhstan. The following represents our net sales based on the geographic location of the customer:

 

 

 

For the years ended December 31,

 

 

 

2011

 

2010

 

2009

 

United States

 

$

81,410

 

$

44,587

 

$

62,955

 

South Korea

 

29,951

 

10,309

 

5,424

 

Canada

 

24,151

 

29,907

 

12,991

 

Germany

 

12,960

 

25,109

 

11,702

 

Russia

 

8,658

 

7,067

 

4,649

 

France

 

3,828

 

5,425

 

5,788

 

Rest of the world

 

47,933

 

32,335

 

61,389

 

 

 

 

 

 

 

 

 

Total

 

$

208,891

 

$

154,739

 

$

164,898

 

 

During the years ended December 31, 2011, 2010, and 2009, no one customer accounted for more than 10% of total net sales.