Segment Reporting and Geographic Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

Segment Reporting and Geographic Information

The Company reorganized its operating segments in the fourth quarter of 2014 to more appropriately focus resources to drive new product development and growth across its diversified customer base. In accordance with the requirements of the Segment Reporting Topic of the Accounting Standards Codification (ASC) issued by the FASB, the Company determined its reportable segments based on the Company’s new organizational structure.

The Company is now organized into three reportable segments: Performance Alloys and Composites, Advanced Materials, and Other. The Other reportable segment includes the operating results of our Precision Optics and Large Area Coatings operating segments (collectively referred to as the Precision Coatings group) and unallocated corporate costs. Precision Optics and Large Area Coatings do not meet the quantitative threshold criteria for separate disclosure. The Company also changed its methodology for allocating certain general corporate and shared services expenses. The Company reclassified a portion of these expenses from its operating segments to corporate to better align with our management of these costs and has recast the effect for all periods presented.

The factors that the Company considered in determining its reportable segments included the economic similarity of its businesses, the nature of products sold or services provided, production processes, types of customers, and distribution methods.

Performance Alloys and Composites produces strip and bulk form alloy products, strip metal products with clad inlay and overlay metals, beryllium-based metals, beryllium, and aluminum metal matrix composites, in rod, sheet, foil, and a variety of customized forms, beryllia ceramics, and bulk metallic glass materials.

Advanced Materials produces advanced chemicals, microelectric packaging, precious, non-precious metal and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal preforms, high temperature braze materials, and ultra-fine wire.

The Precision Coatings group produces thin film coatings, optical filter materials, sputter-coated, and precision-converted thin film materials.

Financial information for reportable segments, which has been recast for all periods presented to reflect the current organizational structure, was as follows:

					Other
(Thousands)	Performance Alloys and Composites		Advanced Materials		Other (1)		Corporate(2)			Subtotal			Total
2014
Net sales	$	433,288	$	547,282	$	147,659	$	(1,339	)	$	146,320		$	1,126,890
Intersegment sales (3)	743		54,404		—		—			—			55,147
Value-added sales	358,511		181,040		102,378		(4,856		)	97,522			637,073
Operating profit (loss)	33,290		32,692		9,272		(18,297		)	(9,025		)	56,957
Depreciation, depletion, and amortization	24,712		6,890		10,175		944			11,119			42,721
Expenditures for long-lived assets	16,998		6,412		5,869		1,280			7,149			30,559
Assets	433,997		148,303		122,337		57,432			179,769			762,069
2013
Net sales	$	422,936	$	591,972	$	152,269	$	(295	)	$	151,974		$	1,166,882
Intersegment sales (3)	447		56,048		5		—			5			56,500
Value-added sales	339,903		168,600		104,232		(3,644		)	100,588			609,091
Operating profit (loss)	30,737		8,427		4,262		(16,595		)	(12,333		)	26,831
Depreciation, depletion, and amortization	23,033		9,037		8,446		1,133			9,579			41,649
Expenditures for long-lived assets	18,354		4,201		6,763		3,306			10,069			32,624
Assets	428,706		184,027		122,964		42,248			165,212			777,945
2012
Net sales	$	424,480	$	694,793	$	153,038	$	767		$	153,805		$	1,273,078
Intersegment sales (3)	1,268		53,169		99		—			99			54,536
Value-added sales	336,977		172,124		106,383		79			106,462			615,563
Operating profit (loss)	29,319		21,760		1,727		(16,030		)	(14,303		)	36,776
Depreciation, depletion, and amortization	19,486		8,078		8,204		1,278			9,482			37,046
Expenditures for long-lived assets	31,473		5,646		6,227		1,315			7,542			44,661
Assets	427,745		222,828		119,475		44,869			164,344			814,917

⁽¹⁾  Other represents the Precision Coatings group, which is a business included in the Other reportable segment.

⁽²⁾  Costs associated with our unallocated corporate functions have been shown separately to better illustrate the financial information for the businesses within the Other reportable segment.

⁽³⁾  Intersegment sales are eliminated in consolidation.

The primary measure of evaluating segment performance is operating profit. In addition to net sales, value-added sales is also reviewed. Value-added sales represents a non-GAAP measure which removes the impact of pass-through metal costs and allows for analysis without the distortion of the movement or volatility in pass-through metal prices. Value-added sales is a metric of particular importance to the Advanced Materials segment, since a significant portion of Advanced Materials net sales are based on the value of precious metals which can fluctuate significantly from period to period.

From a segment assets perspective, segments are evaluated based upon a return on assets metric, which includes inventory (excluding the impact of LIFO), accounts receivable, and property, plant, and equipment. Therefore, segment assets listed in the above table represent the total of these three amounts.

The Other reportable segment includes the operating results and assets of the Precision Coatings group, as well as unallocated corporate costs and assets.

Other geographic information includes the following:

(Thousands)	2014		2013		2012
Net sales from U.S. operations	$	884,175	$	962,288	$	1,064,779
Net sales based upon location of customers
United States	$	731,203	$	810,642	$	881,968
All other	395,687		356,240		391,110
Total	$	1,126,890	$	1,166,882	$	1,273,078
Long-lived assets by country deployed
United States	$	322,090	$	340,922	$	354,122
All other	30,782		31,944		36,042
Total	$	352,872	$	372,866	$	390,164

No individual country, other than the United States, or customer accounted for 10% or more of the Company’s net sales for the years presented. Net sales outside of the United States are primarily to Asia and Europe.