BUSINESS SEGMENTS

6 Months Ended

Jun. 30, 2012

BUSINESS SEGMENTS

BUSINESS SEGMENTS

9.      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 included herein and in our Annual Report on Form 10-K for the year ended December 31, 2011.  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.

Segment information is presented for the three and six months ended June 30, 2012 and 2011 as follows:

	Explosive		Oilfield		AMK
	Metalworking		Products		Welding		Total
For the three months ended June 30, 2012:
Net sales	$	27,374	$	18,924	$	2,389	$	48,687
Depreciation and amortization	$	1,378	$	1,379	$	125	$	2,882
Income from operations	$	3,589	$	1,701	$	165	$	5,455
Unallocated amounts:
Corporate expenses							(839		)
Stock-based compensation							(966		)
Other income							409
Interest expense							(196		)
Interest income							3
Consolidated income before income taxes							$	3,866

	Explosive		Oilfield		AMK
	Metalworking		Products		Welding		Total
For the three months ended June 30, 2011:
Net sales	$	35,751	$	15,717	$	2,697	$	54,165
Depreciation and amortization	$	1,495	$	1,129	$	119	$	2,743
Income from operations	$	5,605	$	1,159	$	702	$	7,466
Unallocated amounts:
Corporate expenses							(698		)
Stock-based compensation							(871		)
Other expense							(136		)
Interest expense							(486		)
Consolidated income before income taxes							$	5,275

	Explosive		Oilfield		AMK
	Metalworking		Products		Welding		Total
For the six months ended June 30, 2012:
Net sales	$	54,908	$	39,898	$	4,093	$	98,899
Depreciation and amortization	$	2,780	$	2,764	$	249	$	5,793
Income from operations	$	7,688	$	3,747	$	77	$	11,512
Unallocated amounts:
Corporate expenses							(1,790		)
Stock-based compensation							(1,935		)
Other income							209
Interest expense							(407		)
Interest income							8
Consolidated income before income taxes							$	7,597

	Explosive		Oilfield		AMK
	Metalworking		Products		Welding		Total
For the six months ended June 30, 2011:
Net sales	$	61,826	$	32,773	$	5,141	$	99,740
Depreciation and amortization	$	2,954	$	2,309	$	241	$	5,504
Income from operations	$	7,159	$	2,083	$	1,170	$	10,412
Unallocated amounts:
Corporate expenses							(1,356		)
Stock-based compensation							(1,663		)
Other expense							(339		)
Interest expense							(896		)
Interest income							3
Consolidated income before income taxes							$	6,161

During the three and six months ended June 30, 2012, no one customer accounted for more than 10% of total net sales.  During the three months ended June 30, 2011, sales to one customer represented $12,354 (22.8%) of total net sales.  During the six months ended June 30, 2011, sales to one customer represented $13,585 (13.6%) of total net sales.