Business Segments

3 Months Ended

Mar. 31, 2023

Business Segments

Business Segments

9.         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.

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,
	2023			2022			2023			2022			2023			2022
Revenues from unaffiliated customers	$	9,060		$	9,168		$	1,742		$	2,000		$	10,802		$	11,168
Cost of goods sold, inclusive of depreciation		(8,076)			(6,496)			(1,811)			(1,715)			(9,887)		$	(8,211)
Gross profit (loss)		984			2,672			(69)			285			915			2,957
Gross margin %		10.9	%		29.1	%		(4.0)	%		14.3	%		8.5	%		26.5	%
Operating expenses:
Selling, general and administrative		(2,175)			(2,093)			(651)			(408)			(2,826)			(2,501)
Total operating costs and expenses		(10,251)			(8,589)			(2,462)			(2,123)			(12,713)			(10,712)
Operating (loss)/income		(1,191)			579			(720)			(123)			(1,911)			456
Other (expenses)/income:
Interest expense		(53)			(70)			—			—			(53)			(70)
Gain on sale of equipment		—			26			—			—			—			26
Total other expenses, net		(53)			(44)			—			—			(53)			(44)
(Loss)/income before income tax provision		(1,244)			535			(720)			(123)			(1,964)			412
Income tax benefit/(provision)		264			(113)			153			26			417			(87)
Net (loss)/income	$	(980)		$	422		$	(567)		$	(97)		$	(1,547)		$	325
Total assets	$	36,096		$	42,382		$	9,753		$	9,546		$	45,849		$	51,928
Capital expenditures, net	$	302		$	77		$	135		$	—		$	437		$	77
Foreign derived sales	$	2,023		$	2,962		$	63		$	37		$	2,086		$	2,999