Business Segments

3 Months Ended

Mar. 31, 2022

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 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 March 31, 2022, the Company had total assets of approximately $51,928,000 ($50,093,000 – December 31, 2021) of which approximately $42,382,000 ($40,871,000 – December 31, 2021) was for ATG and approximately $9,546,000 ($9,222,000 – December 31, 2021) 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
	Three Months Ended						Three Months Ended						Three Months Ended
	March 31,						March 31,						March 31,
	2022			2021			2022			2021			2022			2021
Revenues from unaffiliated customers	$	9,168		$	7,223		$	2,000		$	1,837		$	11,168		$	9,060
Cost of goods sold, inclusive of depreciation		(6,815)			(6,210)			(1,715)			(1,857)		$	(8,530)			(8,067)
Gross margin		2,353			1,013			285			(20)			2,638			993
Gross margin %		25.7	%		14.0	%		14.3	%		(1.1)	%		23.6	%		11.0	%
Selling, general and administrative		(1,774)			(1,585)			(408)			(388)			(2,182)			(1,973)
Total operating costs and expenses		(8,589)			(7,795)			(2,123)			(2,245)			(10,712)			(10,040)
Operating income/(loss)		579			(572)			(123)			(408)			456			(980)
Other income: ERC		—			1,413			—			317			—			1,730
Interest expense		(70)			(60)			—			(1)			(70)			(61)
Gain on sale of equipment		26			—			—			—			26			—
Total other (expense)/income, net		(44)			1,353			—			316			(44)			1,669
Income (loss) before income tax provision		535			781			(123)			(92)			412			689
Income tax provision (benefit)		113			168			(26)			(20)			87			148
Net income/(loss)	$	422		$	613		$	(97)		$	(72)		$	325		$	541
Capital expenditures, net	$	77		$	10		$	—		$	4		$	77		$	14