BUSINESS SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

BUSINESS SEGMENT INFORMATION [Abstract]

BUSINESS SEGMENT INFORMATION

12.           BUSINESS SEGMENT INFORMATION

The Company operates in one industry with three reportable operating segments, which are geographic in nature.  The segments consist of North America, Asia and Europe.  The primary criteria by which financial performance is evaluated and resources are allocated are revenues and operating income.  The following is a summary of key financial data (dollars in thousands):

	2013			2012			2011
Net Sales to External Customers:
North America	$	116,548		$	126,469		$	134,804
Asia		193,647			128,319			126,941
Europe		38,994			31,806			33,376
	$	349,189		$	286,594		$	295,121
Net Sales:
North America	$	128,472		$	138,966		$	149,114
Asia		225,151			167,756			177,815
Europe		40,742			33,329			34,597
Less intergeographic
revenues		(45,176	)		(53,457	)		(66,405	)
	$	349,189		$	286,594		$	295,121
Income (Loss) from Operations:
North America	$	(1,560	)	$	1,336		$	9,026
Asia		15,356			(42	)		(3,480	)
Europe		1,251			369			1,850
	$	15,047		$	1,663		$	7,396
Total Assets:
North America	$	117,261		$	84,609		$	115,552
Asia		148,689			148,351			148,950
Europe		42,100			42,229			12,409
	$	308,050		$	275,189		$	276,911
Capital Expenditures:
North America	$	2,064		$	2,455		$	1,121
Asia		4,551			2,003			1,733
Europe		325			286			74
	$	6,940		$	4,744		$	2,928
Depreciation and Amortization Expense:
North America	$	4,282		$	4,081		$	4,046
Asia		6,540			4,076			4,137
Europe		1,560			956			484
	$	12,382		$	9,113		$	8,667

Segment Sales – Segment sales are attributed to individual segments based on the geographic source of the billing for such customer sales.  Transfers between geographic areas include finished products manufactured in foreign countries which are then transferred to the United States and Europe for sale; finished goods manufactured in the United States which are transferred to Europe and Asia for sale; and semi-finished components manufactured in the United States which are sold to Asia for further processing. Income (loss) from operations represents net sales less operating costs and expenses.

Recent Acquisitions – During 2013, the acquisition of TRP contributed revenues of $66.1 million and income from operations of $10.9 million to the Company’s Asia operating segment. During 2013, the acquisition of Array contributed revenues of $2.1 million and a loss from operations of $0.9 million to the Company’s North America operating segment.  During the years ended December 31, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $10.7 million and $3.1 million, respectively, and combined operating income of $1.7 million and $0.3 million, respectively, to the Company’s Europe operating segment.

The following items are included in the income from operations presented above:

Restructuring Charges – During the year ended December 31, 2013, the Company incurred $1.4 million in severance costs related to continued restructuring efforts ($1.0 million in the Company’s North America operating segment, $0.2 million in the Company’s Asia operating segment and $0.2 million in the Company’s Europe operating segment).  During the year ended December 31, 2012, the Company incurred $5.2 million in restructuring costs related to the 2012 Restructuring Program.  Of this amount, $4.5 million related to the Company’s North America operating segment, $0.6 million related to its Asia operating segment and $0.1 million related to the Company’s Europe operating segment.  The amount incurred in North America primarily related to severance costs and impairment charges on property, plant and equipment related to the closure of its Vinita, Oklahoma manufacturing facility.  During 2011, the Company incurred restructuring costs of $0.3 million related to severance costs associated with the reorganization of its Cinch operations in the U.K.

Litigation Charges – During the year ended December 31, 2011, the Company recorded $3.5 million of litigation charges related to the SynQor and Halo lawsuits.  These charges impacted income from operations primarily within the Company’s Asia reportable operating segment.

Loss on Disposal of Property, Plant and Equipment – During the year ended December 31, 2012, the Company recorded a $0.3 million loss on disposal of assets in its North America operating segment related to the damage caused by Hurricane Sandy at its Jersey City, New Jersey and Inwood, New York facilities.  This was partially offset by a $0.2 million pre-tax gain recorded in the Company’s Asia operating segment from the sale of a building in Macao.   

Entity-Wide Information

The following is a summary of entity-wide information related to the Company’s net sales to external customers by geographic area and by major product line (dollars in thousands).

	2013		2012		2011
Net Sales by Geographic Area:
United States	$	116,548	$	126,469	$	134,804
Macao		193,647		128,319		126,941
Germany		16,585		14,165		17,937
United Kingdom		16,538		13,203		11,927
Czech Republic		2,615		3,298		3,512
Italy		3,252		1,083		-
Sweden		4		57		-
Consolidated net sales	$	349,189	$	286,594	$	295,121
Net Sales by Major Product Line:
Interconnect	$	111,653	$	109,245	$	107,346
Magnetics		170,166		100,529		87,104
Modules		55,967		66,663		90,475
Circuit protection		11,403		10,157		10,196
Consolidated net sales	$	349,189	$	286,594	$	295,121

Net sales to external customers are attributed to individual countries based on the geographic source of the billing for such customer sales.

The following is a summary of long-lived assets by geographic area as of December 31, 2013 and 2012 (dollars in thousands):

	2013		2012
Long-lived Assets by Geographic Location:
United States	$	30,102	$	27,552
People's Republic of China (PRC)		20,985		16,622
All other foreign countries		3,257		3,338
Consolidated long-lived assets	$	54,344	$	47,512

Long-lived assets consist of property, plant and equipment, net and other assets of the Company that are identified with the operations of each geographic area.

The territory of Hong Kong became a Special Administrative Region (“SAR”) of the PRC in the middle of 1997. The territory of Macao became a SAR of the PRC at the end of 1999. Management cannot presently predict what future impact this will have on the Company, if any, or how the political climate in the PRC will affect the Company's contractual arrangements in the PRC.  A significant portion of the Company's manufacturing operations and approximately 40% of its identifiable assets are located in Asia.

Net Sales to Major Customers

The Company had sales to two customers in excess of ten percent of consolidated net sales in 2013.  The combined revenue from these two customers was $103.3 million during the year ended December 31, 2013, representing 29.6% of total sales.  In 2012, the Company had sales to two customers in excess of ten percent of consolidated net sales in 2012.  The combined revenue from these two customers was $70.6 million during the year ended December 31, 2012, representing 24.6% of total sales.  In 2011, there were two customers with sales in excess of ten percent of consolidated net sales.  The combined revenue from these two customers was $65.7 million during the year ended December 31, 2011, representing 22.3% of total sales.  Sales related to these significant customers were primarily reflected in the North America and Asia operating segments during each of the three years discussed.