Reportable Segments

6 Months Ended

Jun. 30, 2017

HNH is a diversified holding company whose strategic business units encompass the following segments: Joining Materials, Tubing, Building Materials, Performance Materials, Electrical Products and Kasco. For a more complete description of the Company's segments, see "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - The Company."

Management has determined that certain operating companies should be aggregated and presented within a single segment on the basis that such segments have similar economic characteristics and share other qualitative characteristics. Management reviews net sales, gross profit and operating income to evaluate segment performance. Operating income for the segments generally includes costs directly attributable to the segment and excludes other unallocated general corporate expenses. Interest expense, other income and expense, and income taxes are not presented by segment since they are excluded from the measures of segment profitability reviewed by the Company's management.

The following table presents information about the Company's reportable segments for the three and six months ended June 30, 2017 and 2016:



Statement of Operations Data	Three Months Ended						Six Months Ended
(in thousands)	June 30,						June 30,
	2017			2016			2017			2016
Net sales:
Joining Materials	$	50,286		$	46,323		$	96,826		$	88,994
Tubing	16,925			20,053			34,928			40,323
Building Materials	87,446			81,434			155,744			139,736
Performance Materials	24,878			26,200			50,254			50,983
Electrical Products	61,534			11,794			122,921			11,794
Kasco	15,076			15,076			30,113			29,847
Total net sales	$	256,145		$	200,880		$	490,786		$	361,677
Segment operating income (loss):
Joining Materials	$	6,121		$	6,127		$	11,541		$	10,542
Tubing	2,641			3,558			5,326			7,769
Building Materials	14,453			11,604			23,512			18,957
Performance Materials	1,412			(7,258		)	2,985			(6,965		)
Electrical Products	6,412			(3,263		)	10,101			(3,263		)
Kasco	557			565			1,243			1,545
Total segment operating income	31,596			11,333			54,708			28,585
Unallocated corporate expenses and non-operating units	(4,931		)	(4,876		)	(13,754		)	(9,859		)
Unallocated pension expense	(2,652		)	(2,132		)	(5,305		)	(4,283		)
Gain from asset dispositions	168			173			274			337
Operating income	24,181			4,498			35,923			14,780
Interest expense	(2,910		)	(1,345		)	(5,840		)	(2,415		)
Realized and unrealized gain (loss) on derivatives	286			(416		)	(75		)	(539		)
Other expense	(318		)	(99		)	(617		)	(244		)
Income before tax and equity investment	$	21,239		$	2,638		$	29,391		$	11,582