Segment and Geographic Information (Notes)

6 Months Ended

Jun. 30, 2023

Revenue [Abstract]

Segment Reporting Disclosure

. 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 Chief Operating Decision Maker ("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; proprietary spring energized seals, springs and contacts; and wheels, brakes and related hydraulic components for helicopters and fixed-wing and unmanned aerial vehicle ("UAV") aircraft.

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; support of the heavy lift K-MAX® manned helicopter; and development of 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.

Summarized financial information by business segment is as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
In thousands
Net sales:
Engineered Products	$	133,513	$	89,765	$	256,839	$	171,217
Precision Products	28,059		41,267		66,030		88,816
Structures	33,586		29,734		66,831		58,781
Net sales	$	195,158	$	160,766	$	389,700	$	318,814
Operating income (loss):
Engineered Products	$	30,542	$	15,467	$	49,898	$	26,509
Precision Products	(1,884)		2,214		(755)		5,429
Structures	(106)		(862)		(749)		(1,479)
Corporate expense	(9,665)		(11,984)		(19,671)		(22,532)
Other unallocated expenses, net(1)	(1,317)		(2,923)		(3,476)		(3,152)
Operating income	$	17,570	$	1,912	$	25,247	$	4,775
Interest expense, net	10,340		1,993		19,944		4,474
Non-service pension and post retirement benefit income, net	(239)		(5,024)		(620)		(10,287)
Other expense (income), net	99		690		(472)		1,194
Earnings before income taxes	$	7,370	$	4,253	$	6,395	$	9,394

(1) Other unallocated expenses, net include program inventory impairment, restructuring and severance costs and net loss (gain) on disposition of assets.

4. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Disaggregation of Revenue

The following tables disaggregate segment revenue by major product line:

	For the Three Months Ended
	June 30, 2023
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	18,480	$	7,375	$	19,332	$	45,187
Safe and Arm Devices	—		10,354		—		10,354
Commercial, Business & General Aviation	69,236		9,076		12,354		90,666
Medical	25,523		—		1,900		27,423
Industrial & Other	20,274		1,254		—		21,528
Total revenue	$	133,513	$	28,059	$	33,586	$	195,158
	For the Three Months Ended
	July 1, 2022
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	9,342	$	6,629	$	16,098	$	32,069
Safe and Arm Devices	—		21,563		—		21,563
Commercial, Business & General Aviation	37,644		11,895		11,319		60,858
Medical	22,683		—		2,317		25,000
Industrial & Other	20,096		1,180		—		21,276
Total revenue	$	89,765	$	41,267	$	29,734	$	160,766

	For the Six Months Ended
	June 30, 2023
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	38,503	$	12,961	$	38,137	$	89,601
Safe and Arm Devices	—		36,596		—		36,596
Commercial, Business & General Aviation	128,921		14,089		24,858		167,868
Medical	50,458		—		3,836		54,294
Industrial & Other	38,957		2,384		—		41,341
Total revenue	$	256,839	$	66,030	$	66,831	$	389,700
	For the Six Months Ended
	July 1, 2022
	Engineered Products		Precision Products		Structures		Total
In thousands
Defense	$	18,995	$	11,951	$	32,353	$	63,299
Safe and Arm Devices	—		58,885		—		58,885
Commercial, Business & General Aviation	70,022		15,662		22,132		107,816
Medical	43,832		—		4,296		48,128
Industrial & Other	38,368		2,318		—		40,686
Total revenue	$	171,217	$	88,816	$	58,781	$	318,814

4. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Disaggregation of Revenue - continued

The following table disaggregates total revenue by product types.

	For the Three Months Ended								For the Three Months Ended
	June 30, 2023								July 1, 2022
	Engineered Products		Precision Products		Structures		Total		Engineered Products		Precision Products		Structures		Total
Original Equipment Manufacturer	47	%	6	%	17	%	70	%	43	%	6	%	18	%	67	%
Aftermarket	21	%	4	%	—	%	25	%	13	%	7	%	—	%	20	%
Safe and Arm Devices	—	%	5	%	—	%	5	%	—	%	13	%	—	%	13	%
Total revenue	68	%	15	%	17	%	100	%	56	%	26	%	18	%	100	%
	For the Six Months Ended								For the Six Months Ended
	June 30, 2023								July 1, 2022
	Engineered Products		Precision Products		Structures		Total		Engineered Products		Precision Products		Structures		Total
Original Equipment Manufacturer	46	%	4	%	17	%	67	%	42	%	5	%	18	%	65	%
Aftermarket	20	%	4	%	—	%	24	%	12	%	5	%	—	%	17	%
Safe and Arm Devices	—	%	9	%	—	%	9	%	—	%	18	%	—	%	18	%
Total revenue	66	%	17	%	17	%	100	%	54	%	28	%	18	%	100	%

Disaggregation of Research and Development Costs

The following table presents research and development costs by segment:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
In thousands
Engineered Products	$	2,679	$	2,121	$	5,118	$	4,364
Precision Products	2,463		2,984		5,921		5,787
Structures	51		110		61		177
Total research and development costs	$	5,193	$	5,215	$	11,100	$	10,328

4. 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				For the Six Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
In thousands
Net (decrease) increase in revenue due to change in profit estimates	$	(1,595)	$	567	$	(2,864)	$	1,472

In the three-month and six-month fiscal periods ended June 30, 2023, the net decreases in revenue were primarily related to cost growth on certain structures and precision products contracts, partially offset by favorable cost performance on the joint programmable fuze ("JPF") contract with the U.S. Government ("USG"). In the three-month and six-month fiscal periods ended July 1, 2022, the net increases in revenue were primarily related to favorable cost performance on the JPF contract with the 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 June 30, 2023 and December 31, 2022, and the portion of backlog the Company expects to recognize revenue on over the next twelve months is as follows:

	June 30, 2023(1)		December 31, 2022
	(in thousands)
Engineered Products	$	366,426	$	322,452
Precision Products	101,941		134,903
Structures	230,440		263,581
Total Backlog	$	698,807	$	720,936

(1) The Company expects to recognize revenue on approximately 74% of backlog as of June 30, 2023 over the next twelve months.