Segment Reporting

6 Months Ended

Jun. 30, 2011

(6) Segment Reporting

The Company distributes and performs processing on both metals and plastics. Although the distribution processes are similar, the customer markets, supplier bases and types of products are different. Additionally, the Company’s Chief Executive Officer, the chief operating decision-maker, reviews and manages these two businesses separately. As such, these businesses are considered reportable segments and are reported accordingly.

In its Metals segment, the Company’s marketing strategy focuses on distributing highly engineered specialty grades and alloys of metals as well as providing specialized processing services designed to meet very precise specifications. Core products include alloy, aluminum, stainless, nickel, titanium and carbon. Inventories of these products assume many forms such as plate, sheet, extrusions, round bar, hexagon bar, square and flat bar, tubing and coil. Depending on the size of the facility and the nature of the markets it serves, service centers are equipped as needed with bar saws, plate saws, oxygen and plasma arc flame cutting machinery, water-jet cutting, stress relieving and annealing furnaces, surface grinding equipment and sheet shearing equipment. This segment also performs various specialized fabrications for its customers through pre-qualified subcontractors that thermally process, turn, polish and straighten alloy and carbon bar.

The Company’s Plastics segment consists exclusively of a wholly-owned subsidiary that operates as Total Plastics, Inc. (“TPI”) headquartered in Kalamazoo, Michigan, and its wholly owned subsidiaries. The Plastics segment stocks and distributes a wide variety of plastics in forms that include plate, rod, tube, clear sheet, tape, gaskets and fittings. Processing activities within this segment include cut to length, cut to shape, bending and forming according to customer specifications. The Plastics segment’s diverse customer base consists of companies in the retail (point-of-purchase), marine, office furniture and fixtures, safety products, life sciences applications, transportation and general manufacturing industries. TPI has locations throughout the upper northeast and midwest regions of the U.S. and one facility in Florida from which it services a wide variety of users of industrial plastics.

The accounting policies of all segments are the same as described in Note 1, “Basis of Presentation and Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Management evaluates the performance of its business segments based on operating income.

Segment information for the three months ended June 30, 2011 and 2010 is as follows:


	Net		Operating			Capital		Depreciation &
	Sales		Income			Expenditures		Amortization
2011
Metals segment	$	252,256	$	5,095		$	2,626	$	4,737
Plastics segment		30,312		1,062			384		322
Other		—		(1,856	)		—		—

Consolidated	$	282,568	$	4,301		$	3,010	$	5,059


2010
Metals segment	$	213,289	$	463		$	1,137	$	5,018
Plastics segment		26,843		1,440			164		333
Other		—		(1,621	)		—		—

Consolidated	$	240,132	$	282		$	1,301	$	5,351

“Other” — Operating loss includes the costs of executive, legal and finance departments, which are shared by both the Metals and Plastics segments.

Segment information for the six months ended June 30, 2011 and 2010 is as follows:


	Net		Operating			Capital		Depreciation &
	Sales		Income (Loss)			Expenditures		Amortization
2011
Metals segment	$	496,845	$	8,681		$	3,943	$	9,422
Plastics segment		58,511		1,624			876		636
Other		—		(3,906	)		—		—

Consolidated	$	555,356	$	6,399		$	4,819	$	10,058


2010
Metals segment	$	412,963	$	(5,358	)	$	3,025	$	9,838
Plastics segment		50,165		1,603			229		663
Other		—		(3,006	)		—		—

Consolidated	$	463,128	$	(6,761	)	$	3,254	$	10,501

“Other” — Operating loss includes the costs of executive, legal and finance departments, which are shared by both the Metals and Plastics segments.

Below are reconciliations of segment data to the consolidated financial statements for the three months ended June 30, 2011 and 2010:


	2011			2010
Operating income	$	4,301		$	282
Interest expense, net		(1,120	)		(1,252	)

Income (loss) before income taxes and equity in earnings of joint venture		3,181			(970	)
Equity in earnings of joint venture		2,982			1,448

Consolidated income before income taxes	$	6,163		$	478

Below are reconciliations of segment data to the consolidated financial statements for the six months ended June 30, 2011 and 2010:


	2011			2010
Operating income (loss)	$	6,399		$	(6,761	)
Interest expense, net		(2,106	)		(2,545	)

Income (loss) before income taxes and equity in earnings of joint venture		4,293			(9,306	)
Equity in earnings of joint venture		5,841			2,314

Consolidated income (loss) before income taxes	$	10,134		$	(6,992	)

Segment information for total assets is as follows:



	June 30, 2011		December 31, 2010
Metals segment	$	511,680	$	454,345
Plastics segment		56,030		47,128
Other		32,384		27,879

Consolidated	$	600,094	$	529,352

“Other” — Total assets consist of the Company’s investment in joint venture.