Business Segments

6 Months Ended

Jun. 30, 2021

Business Segments

Business Segments

11.           Business Segments

The Company operates in two business segments, Advanced Technology Group (“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, 2021, the Company had identifiable assets of approximately $52,563,000 ($50,328,000 – December 31, 2020) of which approximately $43,300,000 ($40,826,000 – December 31, 2020) was for ATG and approximately $9,263,000 ($9,502,000 – December 31, 2020) 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,
	2021			2020			2021			2020			2021			2020
Revenues from unaffiliated customers	$	15,046		$	25,044		$	4,042		$	3,908		$	19,088		$	28,952
Cost of goods sold, inclusive of depreciation		(12,452)			(17,860)			(3,771)			(3,360)			(16,223)			(21,220)
Gross margin		2,594			7,184			271			548			2,865			7,732
		17.2	%		28.7	%		6.7	%		14.0	%		15.0	%		26.7	%
Selling, general and administrative		(3,346)			(3,145)			(836)			(871)			(4,182)			(4,016)
Total operating costs and expenses		(15,798)			(21,005)			(4,607)			(4,231)			(20,405)			(25,236)
Operating (loss)/income		(752)			4,039			(565)			(323)			(1,317)			3,716
Other income: employee retention credit (ERC)		2,986			—			658			—			3,644			-
Interest expense		(125)			(84)			(2)			(8)			(127)			(92)
Total other income/(expense)		2,861			(84)			656			(8)			3,517			(92)
Income (loss) before income tax provision		2,109			3,955			91			(331)			2,200			3,624
Income tax provision (benefits)	$	453		$	830		$	20		$	(69)		$	473		$	761
Net income /(loss)	$	1,656		$	3,125		$	71		$	(262)		$	1,727		$	2,863
Capital expenditures	$	10		$	541		$	3		$	52		$	13		$	593

	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	June						June						June
	2021			2020			2021			2020			2021			2020
Revenues from unaffiliated customers	$	7,823		$	11,230		$	2,205		$	2,274		$	10,028		$	13,504
Cost of goods sold, inclusive of depreciation		(6,242)			(8,494)			(1,914)			(1,990)			(8,156)			(10,484)
Gross margin		1,581			2,736			291			284			1,872			3,020
Gross margin %		20.2	%		24.4	%		13.2	%		12.4	%		18.7	%		22.4	%
Selling, general and administrative		(1,761)			(1,402)			(448)			(346)			(2,209)			(1,748)
Total operating costs and expenses		(8,003)			(9,896)			(2,362)			(2,336)			(10,365)			(12,232)
Operating (loss)/income		(180)			1,334			(157)			(62)			(337)			1,272
Other income: employee retention credit (ERC)		1,573			—			341			-			1,914			—
Interest expense		(65)			(46)			(1)			(4)			(66)			(50)
Total other income/(expense)		1,508			(46)			340			(4)			1,848			(50)
Income (loss) before income tax provision		1,328			1,288			183			(66)			1,511			1,222
Income tax provision (benefits)		285			270			40			(13)			325			257
Net income /(loss)	$	1,043		$	1,018		$	143		$	(53)		$	1,186		$	965
Capital expenditures	$	—		$	128		$	(1)		$	52		$	(1)		$	180