Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

14. Segment Information

The Company currently operates under four business segments: SL Power Electronics Corp. (“SLPE”), the High Power Group, SL-MTI and RFL Electronics Inc. (“RFL”). Teal Electronics Corp. (“TEAL”) and MTE Corporation (“MTE”) are combined into one business segment, which is reported as the High Power Group. The Company aggregates operating business subsidiaries into a single segment for financial reporting purposes if aggregation is consistent with the objectives of ASC 280 “Segment Reporting.” Business units are also combined if they have similar characteristics in each of the following areas:

• nature of products and services

• nature of production process

• type or class of customer

• methods of distribution

SLPE designs, manufactures and markets high-reliability power conversion products in internal and external footprints. The Company’s power supplies provide a reliable and safe power source for the customer’s specific equipment needs. SLPE, which sells products under three brand names (SL Power Electronics, Condor and Ault), is a major supplier to the original equipment manufacturers (“OEMs”) of medical, industrial/instrumentation, military and information technology equipment. The High Power Group sells products under two brand names (TEAL and MTE). TEAL designs and manufactures custom power conditioning and distribution units for OEMs of medical imaging, medical treatment, military aerospace, semiconductor, solar and advanced simulation systems. MTE designs and manufactures power quality products used to protect equipment from power surges, bring harmonics into compliance and improve the efficiency of variable speed motor drive systems. SL-MTI designs and manufactures high power density precision motors that are used in numerous applications, including military and commercial aerospace, oil and gas, and medical and industrial products. RFL designs and manufactures communication and power protection products/systems that are used to protect electric utility transmission lines and apparatus by isolating faulty transmission lines from a transmission grid. The Unallocated Corporate Expenses segment includes corporate related items, financing activities and other costs not allocated to reportable segments, which includes but is not limited to certain treasury, risk management, legal, litigation and public reporting charges and certain legacy costs. The accounting policies for the business units are the same as those described in the summary of significant accounting policies. For additional information, see Note 1 of the Notes to the Consolidated Financial Statements included in Part IV of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Business segment operations are conducted through domestic subsidiaries. For all periods presented, sales between business segments were not material. Each of the segments has certain major customers, the loss of any of which would have a material adverse effect on such segment.

The unaudited comparative results for the three and nine month periods ended September 30, 2013 September 30, 2012 are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands)				(in thousands)
Net sales
SLPE	$	22,370	$	21,194	$	58,350	$	58,361
High Power Group		16,396		15,620		51,096		47,091
SL-MTI		9,414		9,490		27,568		28,166
RFL		4,819		4,582		14,866		15,507
Net sales	$	52,999	$	50,886	$	151,880	$	149,125

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Income from operations
SLPE	$	2,115		$	1,144		$	4,296		$	1,412
High Power Group		1,444			1,499			5,596			4,449
SL-MTI		1,880			1,875			4,762			5,019
RFL		770			153			2,099			1,789
Unallocated Corporate Expenses		(1,504	)		(1,138	)		(4,431	)		(4,419	)
Income from operations	$	4,705		$	3,533		$	12,322		$	8,250

Total assets as of September 30, 2013 and December 31, 2012 are as follows:

	September 30,		December 31,
	2013		2012
	(in thousands)
Total assets
SLPE	$	39,195	$	36,419
High Power Group		34,383		31,296
SL-MTI		14,374		12,012
RFL		13,756		13,744
Unallocated Corporate Assets		15,485		13,666
Total assets	$	117,193	$	107,137

Goodwill and other intangible assets, net, as of September 30, 2013 and December 31, 2012 are as follows:

	September 30,		December 31,
	2013		2012
	(in thousands)
Goodwill and other intangible assets, net
SLPE	$	4,530	$	4,563
High Power Group		15,102		15,343
SL-MTI		115		140
RFL		5,318		5,359
Goodwill and other intangible assets, net	$	25,065	$	25,405