Note 12 - Segment and Related Information

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12.

SEGMENT AND RELATED INFORMATION

  

The Company operates

three

reportable business segments: (

1

) Aerospace Components, (

2

) Commercial Air Handling, (

3

) and Industrial Hose. 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. 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 of 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. The Company added the distribution of marine hose for recreational boating to this segment through the acquisition of the assets of MPI Products on

January 2, 2020.

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 June 3 0 , 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	11,848,816	$	2,587,421		$	4,046,814	$	93,537		$	18,576,588
Gross Profit		2,893,541		(499,569	)		1,088,811		16,256			3,499,039
Operating Income		1,565,482		(991,953	)		227,498		(270,507	)		530,520
Pretax Income		1,565,482		(1,134,193	)		88,290		(211,954	)		307,625
Net Income		1,174,113		(850,645	)		62,082		(156,713	)		228,837

	Three Months Ended June 3 0 , 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	14,880,504	$	7,457,377	$	1,933,725	$	243,030		$	24,514,636
Gross Profit		3,549,109		1,038,395		592,245		47,184			5,226,933
Operating Income		2,244,680		414,464		295,701		(163,292	)		2,791,553
Pretax Income		2,244,481		231,296		214,536		(208,874	)		2,481,439
Net Income		1,683,361		169,377		159,385		(180,644	)		1,831,479

	Six Months Ended June 30, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	23,302,590	$	9,843,247		$	10,296,535	$	415,790		$	43,858,162
Gross Profit		5,941,342		771,191			2,851,178		143,471			9,707,182
Operating Income		3,185,251		(251,705	)		893,081		(157,958	)		3,668,669
Pretax Income		3,160,286		(548,265	)		614,816		(149,845	)		3,076,992
Net Income		2,370,215		(411,199	)		455,552		(110,161	)		2,304,407

	Six Months Ended June 30, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales	$	26,625,065	$	15,477,780	$	3,730,816	$	517,062		$	46,350,723
Gross Profit		6,551,042		2,295,400		1,117,979		92,400			10,056,821
Operating Income		4,027,667		1,174,074		543,989		(383,106	)		5,362,624
Pretax Income		4,027,177		794,253		407,013		(418,132	)		4,810,311
Net Income		3,020,384		593,097		302,456		(339,000	)		3,576,937