Business Segments

9 Months Ended

Sep. 30, 2022

Business Segments

Business Segments

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 September 30, 2022, the Company had identifiable assets of approximately $47,444,000 ($50,093,000 – December 31, 2021) of which approximately $37,340,000 ($40,871,000 – December 31, 2021) was for ATG and approximately $10,104,000 ($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
	September 30,						September 30,						September 30,
	2022			2021			2022			2021			2022			2021
Revenues from unaffiliated customers	$	8,823		$	8,449		$	2,168		$	2,466		$	10,991		$	10,915
Cost of goods sold, inclusive of dep. & amort.		(7,973)			(6,762)			(1,495)			(2,381)			(9,468)			(9,143)
Gross profit		850			1,687			673			85			1,523			1,772
Gross margin %		9.6	%		20.0	%		31.0	%		3.4	%		13.9	%		16.2	%
Selling, general and administrative		(1,541)			(2,240)			(402)			(481)			(1,943)			(2,721)
Legal settlement awards		—			(1,800)			—			(90)			—			(1,890)
Total operating costs and expenses		(9,514)			(10,802)			(1,897)			(2,952)			(11,411)			(13,754)
Operating (loss)/income		(691)			(2,353)			271			(486)			(420)			(2,839)
Employee retention credit (ERC)		—			1,598			—			380			—			1,978
Paycheck Protection Program loan forgiveness		—			4,000			—			—			—			4,000
Interest expense		(50)			(5)			—			—			(50)			(5)
Total other (expense)/income		(50)			5,593			—			380			(50)			5,973
(Loss)/ income before income taxes		(741)			3,240			271			(106)			(470)			3,134
Income tax (benefit)/provision		(203)			(83)			49			(21)			(154)			(104)
Net (loss)/income	$	(538)		$	3,323		$	222		$	(85)		$	(316)		$	3,238
Capital expenditures	$	451		$	54		$	46		$	1		$	497		$	55

	($000’s omitted except per share data)
	ATG						CPG						Consolidated
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2022			2021			2022			2021			2022			2021
Revenues from unaffiliated customers	$	26,739		$	23,495		$	6,650		$	6,508		$	33,389		$	30,003
Cost of goods sold, inclusive of dep. & amort.		(22,843)			(19,214)			(5,217)			(6,152)			(28,060)			(25,366)
Gross profit		3,896			4,281			1,433			356			5,329			4,637
Gross margin %		14.6	%		18.2	%		21.5	%		5.5	%		16.0	%		15.5	%
Selling, general and administrative		(4,890)			(5,586)			(1,306)			(1,317)			(6,196)			(6,903)
Legal settlement awards		—			(1,800)			—			(90)			—			(1,890)
Total operating costs and expenses		(27,733)			(26,600)			(6,523)			(7,559)			(34,256)			(34,159)
Operating (loss)/income		(994)			(3,105)			127			(1,051)			(867)			(4,156)
Employee retention credit (ERC)		—			4,584			—			1,038			—			5,622
Paycheck Protection Program loan forgiveness		—			4,000			—			—			—			4,000
Interest expense		(194)			(130)			—			(2)			(194)			(132)
Gain on sale of equipment		26			—			—			—			26			—
Total other (expense)/income		(168)			8,454			—			1,036			(168)			9,490
(Loss)/income before income taxes		(1,162)			5,349			127			(15)			(1,035)			5,334
Income tax (benefit)/provision		(263)			370			29			(1)			(234)			369
Net (loss)/income	$	(899)		$	4,979		$	98		$	(14)		$	(801)		$	4,965
Capital expenditures	$	841		$	64		$	46		$	4		$	887		$	68