Business Segments

12 Months Ended

Dec. 31, 2021

Business Segments

Business Segments

10.    Business Segments

The Company operates in two business segments, Advanced Technology Group (“ATG”) and Consumer Products Group (“CPG”). The Company’s reportable segments are strategic business units that offer different products and services. The segments are composed of separate corporations and operations 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 prime government contractors, 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.

Information regarding the Company’s operations in these segments is summarized as follows ($000’s omitted):

	($000's omitted except per share data)
	ATG						CPG						Consolidated
	Years Ended						Years Ended						Years Ended
	December 31,						December 31,						December 31,
	2021			2020			2021			2020			2021			2020
Revenues from unaffiliated customers	$	31,677		$	40,782		$	8,881		$	9,062		$	40,558		$	49,844
Cost of goods sold, inclusive of depreciation		(25,929)			(33,440)			(8,641)			(8,164)			(34,570)			(41,604)
Gross margin		5,748			7,342			240			898			5,988			8,240
Gross margin %		18.1	%		18.0	%		2.7	%		9.9	%		14.8	%		16.5	%
Operating expenses:
Selling, general and administrative		(7,661)			(6,245)			(1,762)			(1,753)			(9,423)			(7,998)
Legal settlement awards		(1,800)			—			(90)			—			(1,890)			—
Total operating expenses		(9,461)			(6,245)			(1,852)			(1,753)			(11,313)			(7,998)
Operating (loss)/income		(3,713)			1,097			(1,612)			(855)			(5,325)			242
Other income/(expense):
Other income: employee retention credit (ERC)		4,584			—			1,038			—			5,622			—
Other income: PPP loan forgiveness		4,000			—			—			—			4,000			—
Interest expense		(185)			(170)			(2)			(10)			(187)			(180)
Loss on sale of equipment		(98)			—			—			—			(98)			—
Total other income/(expense)		8,301			(170)			1,036			(10)			9,337			(180)
Income (loss) before income tax provision		4,588			927			(576)			(865)			4,012			62
Income tax provision expense/(benefit)		78			492			(121)			(530)			(43)			(38)
Net income/(loss)	$	4,510		$	435		$	(455)		$	(335)		$	4,055		$	100