Note 17 - Segment and Related Information

12 Months Ended

Dec. 31, 2020

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'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. The Company purchased all of the issued and outstanding shares of capital stock of KT Acquisition LLC (name later changed to Komtek Forge LLC), in Worcester, Massachusetts on

January 15, 2021.

Komtek Forge LLC is a supplier of highly engineered forgings for the aerospace, industrial gas turbine, medical prosthetics, alternative energy, petrochemical and defense industries. The Company purchased all of the membership interests of Global-Tek-Manufacturing LLC (“Global-Tek”), in Ceiba, Puerto Rico and substantially all of the assets of Machining Technology L.L.C. (Machining Technologies), in Longmont, Colorado on

March 2, 2021. 

Global-Tek and Machining Technologies specialize in providing customers with highly engineered manufacturing solutions, including CNC machining, anodizing, electro polishing and laser marking for customers in the defense, aerospace and medical device markets.  Komtek Forge LLC, Global-Tek and Machining Technologies were all acquired in

2021

and therefore are

not

included in the

2020

and

2019

results reported herein.

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.

	Year Ended December 31, 2020
	Commercial Air Handling		Aerospace Components			Industrial Hose		Corporate and Other			Consolidated
Sales	$	41,243,413	$	18,916,525		$	22,762,199	$	2,147,763		$	85,069,900
Gross Profit		10,216,587		1,415,591			6,518,682		780,430			18,931,290
Operating Income		5,313,487		(649,230	)		3,746,257		(958,061	)		7,452,453
Pretax Income		5,750,226		(1,164,179	)		2,114,580		774,614			7,475,241
Net Income		4,312,669		(873,134	)		1,585,935		813,917			5,839,387

	Year Ended December 31, 2019
	Commercial Air Handling		Aerospace Components		Industrial Hose		Corporate and Other			Consolidated
Sales		51,564,344		30,126,438		7,171,164		836,581			89,698,527
Gross Profit		12,350,412		5,015,003		1,970,149		239,071			19,574,635
Operating Income		7,141,097		2,876,304		859,114		(365,849	)		10,510,666
Pretax Income		7,140,398		2,073,239		635,995		(430,142	)		9,419,490
Net Income		5,291,035		1,536,270		471,272		(318,714	)		6,979,863

Geographical Information

Included in the consolidated financial statements are the following amounts related to geographic locations:

	Year Ended December 31, 2020		Year Ended December 31, 2019
United States of America	$	83,992,635	$	89,370,005
Puerto Rico		601,232		-
Canada		388,531		283,011
Other		87,502		45,511
	$	85,069,900	$	89,698,527

All export sales to foreign countries are made in US Dollars.