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Note 17 - Segment and Related Information
 12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
 
17.
SEGMENT AND RELATED INFORMATION
  
 
The Company operates
three
reportable business segments: (
1
) Aerospace Components, (
2
) Commercial Air Handling, (
3
) and Industrial Hose.  The Company operated the Test and Measurement business segment through
June 1, 2018,
at which time it was sold to Hickok Waekon, LLC. The Company's management evaluates segment performance based primarily on operating income. Certain corporate costs are allocated to the segments and interest expense directly related to financing the acquisition of a business is allocated to that segment, respectively.  Intangible assets are allocated to each segment and the related amortization of these assets are recorded in selling, general and administrative expenses.
 
Aerospace Components:

The Aerospace Components segment was added
July 1, 2018,
when the Company purchased all of the issued and outstanding shares of capital stock of CAD Enterprises, Inc. (“CAD”) in Phoenix, Arizona. This segment manufactures precision components primarily for customers in the aerospace industry.  This segment provides complete end-to-end engineering, machining, grinding, welding, brazing, heat treat and assembly solutions.  Utilizing state-of-the-art machining and welding technologies, this segment is an industry leader in providing complex components produced from nickel-based superalloys and stainless steels.  Our quality certifications include ISO
9001:2015/AS9100D,
as well as Nadcap accreditation for Fluorescent Penetrant Inspection (FPI), Heat Treating/Braze, Non-Conventional Machining EDM, TIG/E-Beam welding.
 
Commercial Air Handling:

The Commercial Air Handling segment was added
June 1, 2017,
when the Company purchased certain assets and assumed certain liabilities of Air Enterprises Acquisition LLC in Akron, Ohio. The acquired business, which operates under the name Air Enterprises, is an industry leader in designing, manufacturing and installing large-scale commercial, institutional, and industrial custom air handling solutions. Its customers are typically in the health care, education, pharmaceutical and industrial manufacturing markets in the United States. This segment also sells to select international markets. The custom air handling units are constructed of non-corrosive aluminum, resulting in sustainable, long-lasting, and energy efficient solutions with life expectancies of
50
years or more. These products are distributed through a network of sales representatives, based on relationships with health care networks, building contractors and engineering firms. The custom air handling equipment is designed, manufactured and installed under the brand names FactoryBilt® and SiteBilt®. FactoryBilt® air handling solutions are designed, fabricated and assembled in a vertically integrated process entirely within the Akron, Ohio facility. SiteBilt® air handling solutions are designed and fabricated in Akron, but are then crated and shipped to the field and assembled on-site.
 
Industrial Hose:
 
The Industrial Hose segment was added
July 1, 2016,
when the Company purchased the assets of the Federal Hose Manufacturing, LLC in Painesville, Ohio. This business segment includes the manufacture of flexible interlocking metal hoses and the distribution of silicone and hydraulic hoses. Metal hoses are sold primarily to major heavy-duty truck manufacturers and major aftermarket suppliers in North America. Metal hoses are also sold into the agricultural, industrial and petrochemical markets. Silicone hoses are distributed to a number of industries in North America, including agriculture and general industrial markets.
 
Test and Measurement:
 
The Test and Measurement segment is the legacy business that was started in
1910
when the Company was founded, and was sold
June 1, 2018.
This business segment included electronic testing products designed and manufactured for the automotive and trucking industries and includes indicators and gauges for the locomotive and aircraft industries. The automotive diagnostic products are sold to original equipment manufacturers and to the aftermarket under several brand names and through a variety of distribution methods. In the aircraft industry, primary customers are manufacturers of commercial, military and personal airplanes. In the locomotive industry, indicators and gauges are sold to manufacturers and servicers of railroad equipment and locomotives.
 
   
 
 
 
  
 
 
 
  
Three Months Ended
  
   
Years Ended
    
December 31,
  
   
December 31,
201
8
    
September 30,
201
7
    
201
7
    
201
6
(unaudited)
  
                                 
Sales
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
41,833,444
     $
11,190,844
     $
9,004,560
     $
-
  
Test and Measurement
    
3,204,419
      
6,610,684
      
1,161,773
      
827,066
  
Industrial Hose
    
6,942,886
      
6,015,207
      
1,587,886
      
1,529,860
  
Aerospace Components
    
14,397,557
      
-
      
-
      
-
  
Total Sales
   $
66,378,306
     $
23,816,735
     $
11,754,219
     $
2,356,926
  
                                 
Gross Profit
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
11,046,113
     $
2,900,296
     $
2,103,202
     $
-
  
Test and Measurement
    
790,979
      
3,426,732
      
600,141
      
193,601
  
Industrial Hose
    
1,813,752
      
1,697,249
      
522,489
      
389,637
  
Aerospace Components
    
1,653,123
      
-
      
-
      
-
  
Total Gross Profit
   $
15,303,967
     $
8,024,277
     $
3,225,832
     $
583,238
  
                                 
Operating Income
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
6,409,687
     $
1,129,995
     $
921,721
     $
-
  
Test and Measurement
    
(723,969
)
    
650,806
      
123,274
      
(461,972
)
Industrial Hose
    
820,881
      
605,606
      
245,950
      
235,011
  
Aerospace Components
    
807,860
      
-
      
-
      
-
  
Unallocated Corporate General
    
-
      
-
      
-
      
-
  
Total Operating Income
   $
7,314,459
     $
2,681,937
     $
1,290,945
     $
(307,346
)
                                 
Income Before Provision for Income Taxes
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
    
6,328,158
      
1,424,278
      
905,736
      
-
  
Test and Measurement
    
(497,712
)
    
1,859,936
      
96,947
      
(460,332
)
Industrial Hose
    
619,909
      
595,939
      
205,910
      
154,626
  
Aerospace Components
    
630,966
      
-
      
-
      
-
  
Loss on sale of business
    
(1,160,574
)
    
-
      
-
      
-
  
Unallocated Corporate General & Other
    
(639,017
)
    
(1,691,993
)
    
(30,602
)
    
-
  
Income Before Provision for Income Taxes
   $
5,281,730
     $
2,188,760
     $
1,177,991
     $
(305,706
)
 
 
Geographical Information

Included in the consolidated financial statements are the following amounts related to geographic locations:
 
 
   
Three Months
Ended
   
 
 
 
  
 
 
 
   
December 31,
2017
    
Year Ended
December 31, 2018
    
Year Ended
September 30, 2017
  
                         
                         
United States of America
   $
10,279,947
     $
64,874,554
     $
22,735,948
  
Australia
    
997
      
-
      
4,112
  
Canada
    
86,386
      
351,211
      
419,625
  
England
    
1,324,042
      
-
      
-
  
Mexico
    
4,649
      
53,246
      
315,869
  
Poland
    
52,492
      
10,299
      
316,666
  
Other
    
5,706
      
1,088,996
      
24,515
  
    $
11,754,219
     $
66,378,306
     $
23,816,735
  
 
In the
three
-month period ending
December 31, 2016 (
unaudited), over
95%
of the Company’s product was sold within the United States. All export sales to Australia, Canada, England, Mexico, and other foreign countries are made in US Dollars.