10. Business Segments

The Company operates in two business segments, ATG and CPG. The Company’s reportable segments are strategic business units that offer different products and services. The segments are composed of separate corporations and are managed separately. Operations in ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use.

As of June 30, 2020, the Company had identifiable assets of approximately $56,180,000 ($49,470,000 – December 31, 2019) of which approximately $46,208,000 ($39,980,000 – December 31, 2019) was for ATG and approximately $9,972,000 ($9,490,000 – December 31, 2019) was for CPG.

Information regarding the Company’s operations in these segments is summarized as follows:


	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Six Months Ended						Six Months Ended						Six Months Ended
	June 30,						June 30,						June 30,
	2020			2019			2020			2019			2020			2019
Revenues from unaffiliated customers	$	25,044		$	22,746		$	3,908		$	3,324		$	28,952		$	26,070

Cost of goods sold, inclusive of depreciation		(17,860)			(17,022)			(3,361)			(3,706)			(21,221)			(20,728)
Gross margin		7,184			5,724			547			(382)			7,731			5,342
Gross margin %		28.7	%		25.2	%		14.0	%		(11.5)	%		26.7	%		20.5	%

Selling, general and administrative		(3,145)			(3,019)			(871)			(1,283)			(4,016)			(4,302)
Interest		(84)			(41)			(7)			(16)			(91)			(57)
Total costs and expenses		(21,089)			(20,082)			(4,239)			(5,005)			(25,328)			(25,087)

Income/(loss) before income tax provision		3,955			2,664			(331)			(1,681)			3,624			983

Income tax provision (benefits)		830			463			(69)			(292)			761			171
Net income/(loss)	$	3,125		$	2,201		$	(262)		$	(1,389)		$	2,863		$	812
Capital expenditures	$	541		$	1,161		$	52		$	192		$	593		$	1,353


	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	June 30,						June 30,						June 30,
	2020			2019			2020			2019			2020			2019
Revenues from unaffiliated customers	$	11,230		$	12,151		$	2,274		$	1,916		$	13,504		$	14,067

Cost of goods sold, inclusive of depreciation		(8,494)			(8,555)			(1,991)			(2,243)			(10,485)			(10,798)
Gross margin		2,736			3,596			283			(327)			3,019			3,269
Gross margin %		24.4	%		29.6	%		12.4	%		(17.1)	%		22.4	%		23.2	%

Selling, general and administrative		(1,402)			(1,739)			(346)			(636)			(1,748)			(2,375)
Interest		(46)			(22)			(3)			(8)			(49)			(30)
Total costs and expenses		(9,942)			(10,316)			(2,340)			(2,887)			(12,282)			(13,203)

Income/(loss) before income tax provision		1,288			1,835			(66)			(971)			1,222			864

Income tax provision (benefits)		270			318			(13)			(168)			257			150
Net income/(loss)	$	1,018		$	1,517		$	(53)		$	(803)		$	965		$	714
Capital expenditures	$	128		$	562		$	52		$	149		$	180		$	711