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BUSINESS SEGMENT INFORMATION
3 Months Ended
Dec. 31, 2018
Segment Reporting, Measurement Disclosures [Abstract]  
BUSINESS SEGMENT INFORMATION
7.
BUSINESS SEGMENT INFORMATION
 
The Company is organized based on the products and services that it offers, and classifies its business operations in four reportable segments for financial reporting purposes: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The Filtration segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), Mayday Manufacturing Co. and its affiliate Hi-Tech Metals, Inc. (collectively referred to as Mayday). The companies within this segment primarily design and manufacture specialty filtration products, including hydraulic filter elements used in commercial aerospace applications, unique filter mechanisms used in micro-propulsion devices for satellites and custom designed filters for manned and unmanned aircraft; manufacture elastomeric-based signature reduction solutions for the U.S. Navy; and manufacture landing gear components for the aerospace and defense industry. The Test segment’s operations consist primarily of ETS-Lindgren Inc. (ETS-Lindgren). ETS-Lindgren is an industry leader in providing its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. The USG segment’s operations consist primarily of Doble Engineering Company (Doble), Morgan Schaffer Inc. (Morgan Schaffer), and NRG Systems, Inc. (NRG). Doble provides high-end, intelligent diagnostic test solutions for the electric power delivery industry and is a leading supplier of partial discharge testing instruments used to assess the integrity of high voltage power delivery equipment. Morgan Schaffer provides an integrated offering of dissolved gas analysis, oil testing, and data management solutions for the electric power industry. NRG designs and manufactures decision support tools for the renewable energy industry, primarily wind. The Technical Packaging segment’s operations consist of Thermoform Engineered Quality LLC (TEQ) and Plastique Limited and Plastique Sp. z o.o. (together, Plastique). The companies within this segment provide innovative solutions to the medical and commercial markets for thermoformed packages and specialty products using a wide variety of thin gauge plastics and pulp.
 
Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes.
 
 
 
Three Months

Ended December 31,
 
(In thousands)
 
2018
 
 
2017
 
NET SALES
 
 
 
 
 
 
 
 
Filtration
 
$
66,224
 
 
 
60,035
 
Test
 
 
41,286
 
 
 
37,530
 
USG
 
 
55,855
 
 
 
55,754
 
Technical Packaging
 
 
19,232
 
 
 
20,176
 
Consolidated totals
 
$
182,597
 
 
 
173,495
 
 
 
 
 
 
 
 
 
 
EBIT
 
 
 
 
 
 
 
 
Filtration
 
$
10,610
 
 
 
9,645
 
Test
 
 
3,310
 
 
 
2,596
 
USG
 
 
21,546
 
 
 
10,651
 
Technical Packaging
 
 
106
 
 
 
965
 
Corporate (loss)
 
 
(10,425
)
 
 
(8,871
)
Consolidated EBIT
 
 
25,147
 
 
 
14,986
 
Less: Interest expense
 
 
(1,890
)
 
 
(2,185
)
Earnings before income taxes
 
$
23,257
 
 
 
12,801
 
 
 
Non-GAAP Financial Measures
 
The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT.
 
The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.