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Note 13 - Segment and Related Information
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
13.
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.
 
Corporate and Other:
 
Corporate costs
not
allocated to the
three
primary business segments are aggregated with the results of DG, acquired in
April 2019.
 
Information by industry segment is set forth below:
 
 
   
Three Months Ended
    
Nine
Months Ended
  
   
September
30,
    
September
30,
  
   
2019
    
2018
    
2019
    
2018
  
                                 
Sales
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
12,878,988
     $
9,876,700
     $
39,504,053
     $
29,876,961
  
Test and Measurement
    
29,893
      
790,297
      
532,076
      
2,786,742
  
Industrial Hose
    
1,823,950
      
1,718,138
      
5,554,766
      
5,193,324
  
Aerospace Components
    
7,386,930
      
7,386,002
      
22,864,710
      
7,386,002
  
Corporate and Other
    
124,920
      
-
      
139,799
      
-
  
Total Sales
   $
22,244,681
     $
19,771,137
     $
68,595,404
     $
45,243,029
  
                                 
Gross Profit
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
2,915,767
     $
2,743,833
     $
9,466,810
     $
7,861,725
  
Test and Measurement
    
4,933
      
130,293
      
87,792
      
722,062
  
Industrial Hose
    
403,158
      
356,000
      
1,521,137
      
1,151,358
  
Aerospace Components
    
1,611,655
      
1,220,096
      
3,907,056
      
1,220,096
  
Corporate and Other
    
52,050
      
-
      
61,589
      
-
  
Total Gross Profit
   $
4,987,563
     $
4,450,222
     $
15,044,384
     $
10,955,241
  
                                 
Operating Income
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
   $
1,509,077
     $
1,696,934
     $
5,536,745
     $
4,357,970
  
Test and Measurement
    
4,933
      
130,293
      
87,792
      
(239,151
)
Industrial Hose
    
137,640
      
111,419
      
681,628
      
413,573
  
Aerospace Components
    
1,073,388
      
706,424
      
2,247,461
      
706,424
  
Corporate and Other
    
(166,259
)
    
(173,791
)
    
(632,223
)
    
(307,507
)
Total Operating Income
   $
2,558,779
     $
2,471,279
     $
7,921,403
     $
4,931,309
  
                                 
Income Before Provision for Income Taxes
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Air Handling
    
1,508,944
      
1,686,296
      
5,536,122
      
4,316,875
  
Test and Measurement
    
4,933
      
130,293
      
87,792
      
(94,828
)
Industrial Hose
    
69,697
      
48,454
      
476,710
      
272,608
  
Aerospace Components
    
830,865
      
620,023
      
1,625,116
      
620,023
  
Loss on sale of business
    
-
      
-
      
-
      
(1,160,574
)
Corporate and Other
    
(177,657
)
    
(397,883
)
    
(678,647
)
    
(842,419
)
Income before provision for income taxes
   $
2,236,782
     $
2,087,183
     $
7,047,093
     $
3,111,685