Segment and Geographic Information (Notes)

3 Months Ended

Apr. 01, 2022

Revenue [Abstract]

Segment Reporting Disclosure

5. REVENUE AND SEGMENT INFORMATION

The Company is organized based upon the nature of its products and services, and is composed of three operating segments, each overseen by a segment manager. These segments are reflective of how the Company’s Chief Executive Officer, who is its CODM, reviews operating results for the purposes of allocating resources and assessing performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

The Engineered Products segment serves the aerospace and defense, industrial and medical markets providing sophisticated proprietary aircraft bearings and components; super precision, miniature ball bearings; and proprietary spring energized seals, springs and contacts.

The Precision Products segment serves the aerospace and defense markets providing precision safe and arming solutions for missile and bomb systems for the U.S. and allied militaries; subcontract helicopter work; restoration, modification and support of the Company's SH-2G Super Seasprite maritime helicopters; manufacture and support of the heavy lift K-MAX® manned helicopter, the K-MAX TITAN unmanned aerial system and the KARGO UAV unmanned aerial system, a purpose built autonomous medium lift logistics vehicle.

The Structures segment serves the aerospace and defense and medical end markets providing sophisticated complex metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft, and medical imaging solutions.

5. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Summarized financial information by business segment is as follows:

	For the Three Months Ended
	April 1, 2022		April 2, 2021
In thousands
Net sales:
Engineered Products	$	81,452	$	71,779
Precision Products	47,549		60,533
Structures	29,047		39,304
Net sales	$	158,048	$	171,616
Operating income (loss):
Engineered Products	$	11,042	$	4,906
Precision Products	3,409		13,053
Structures	(617)		320
Corporate expense	(10,548)		(10,365)
Other unallocated expenses, net(1)	(229)		(2,301)
Operating income	$	3,057	$	5,613

(1) Other unallocated expenses, net include costs from the TSA, restructuring and severance costs, loss on sale of business, and net loss on sale of assets.

Disaggregation of Revenue

The following table disaggregates segment revenue by major product line:

	For the Three Months Ended
	April 1, 2022
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	9,653	$	5,322	$	16,255	$	31,230
Safe and Arm Devices	—		37,322		—		37,322
Commercial, Business & General Aviation	32,378		3,767		10,813		46,958
Medical	21,149		—		1,979		23,128
Industrial & Other	18,272		1,138		—		19,410
Total revenue	$	81,452	$	47,549	$	29,047	$	158,048
	For the Three Months Ended
	April 2, 2021
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	11,228	$	6,994	$	25,389	$	43,611
Safe and Arm Devices	—		41,586		—		41,586
Commercial, Business & General Aviation	25,072		10,902		11,984		47,958
Medical	18,652		—		1,931		20,583
Industrial & Other	16,827		1,051		—		17,878
Total revenue	$	71,779	$	60,533	$	39,304	$	171,616

5. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Disaggregation of Revenue - continued

COVID-19

The impact of the novel coronavirus (“COVID-19”) and the precautionary measures instituted by governments and businesses to mitigate the spread, including limiting non-essential travel, have contributed to a general slowdown in the global economy. The Company has implemented strategies to limit the risk to its operations with a continued focus on the health of its employees and the satisfaction of its customers’ requirements. Despite all of these efforts to mitigate the risks associated with COVID-19, the effects of the pandemic have adversely impacted our commercial end markets, more specifically Commercial, Business and General Aviation customers. Management is encouraged by the recoveries for these products and the strong order intake seen in the first three months of 2022. The extent and duration of time to which COVID-19 may adversely impact the Company depends on future developments, which continue to be uncertain and unpredictable.

The following table disaggregates total revenue by product types.

	For the Three Months Ended
	April 1, 2022
	Engineered Products		Precision Products		Structures		Total
Original Equipment Manufacturer	41	%	2	%	18	%	61	%
Aftermarket	11	%	4	%	—	%	15	%
Safe and Arm Devices	—	%	24	%	—	%	24	%
Total revenue	52	%	30	%	18	%	100	%
	For the Three Months Ended
	April 2, 2021
	Engineered Products		Precision Products		Structures		Total
Original Equipment Manufacturer	32	%	8	%	23	%	63	%
Aftermarket	10	%	3	%	—	%	13	%
Safe and Arm Devices	—	%	24	%	—	%	24	%
Total revenue	42	%	35	%	23	%	100	%

Disaggregation of Research and Development Costs

The following table presents research and development costs by segment:

	For the Three Months Ended
	April 1, 2022		April 2, 2021
In thousands
Engineered Products	$	2,243	$	2,822
Precision Products	2,803		1,402
Structures	67		2
Total research and development costs	$	5,113	$	4,226

5. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Other

For contracts in which revenue is recognized over time, the Company performs detailed quarterly reviews of the progress and execution of its performance obligations under these contracts. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management's judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by subcontractors, the availability and timing of funding from customers and overhead cost rates, among other variables. Based upon these reviews, the Company will record the effects of adjustments in profit estimates each period. If at any time management determines that in the case of a particular contract total costs will exceed total contract revenue, a provision for the entire anticipated contract loss is recorded at that time.

Net changes in revenue associated with cost growth on the Company's over time contracts were as follows:

	For the Three Months Ended
	April 1, 2022		April 2, 2021
In thousands
Net change in revenue due to change in profit estimates	$	905	$	2,865

In the three-month fiscal periods ended April 1, 2022 and April 2, 2021, the net increases in revenue were primarily related to favorable cost performance on the joint programmable fuze ("JPF") contract with the U.S. Government ("USG"), partially offset by cost growth on certain structures programs and legacy fuzing contracts.

Unfulfilled Performance Obligations

Unfulfilled performance obligations ("backlog") represents the transaction price of firm orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. Backlog at April 1, 2022 and December 31, 2021, and the portion of backlog the Company expects to recognize revenue on over the next twelve months is as follows:

	April 1,  2022(1)		December 31, 2021
In thousands
Backlog	$	705,023	$	700,923

(1) The Company expects to recognize revenue on approximately 62% of backlog as of April 1, 2022 over the next twelve months.