Segment Information

9 Months Ended

Sep. 30, 2024

Segment Information [Abstract]

Segment Information

5. Segment Information

The Company reports financial information based on the organizational structure used by the Company’s chief operating decision maker for making operating and investment decisions and for assessing performance. The Company’s reportable business segments consist of: (1) United States; (2) Canada; and (3) Europe. As described below, the activities of the Company’s Asian operations are closely linked to those of the U.S. operations; accordingly, the Company’s chief operating decision maker reviews the financial results of both, on a consolidated basis, and as such, the results of the Asian operations have been aggregated with the results of the United States operations to form one reportable segment called the “United States segment” or “U.S. segment”. Each reportable segment derives its revenue from the sales of first aid and medical products, cutting and sharpening devices and measuring instruments for school, office, home, hardware, sporting and industrial use.

Domestic sales orders are filled primarily from the Company’s distribution centers in North Carolina, Washington, Massachusetts, Tennessee, Florida, New Hampshire and California. The Company is responsible for the costs of shipping, insurance, customs clearance, duties, storage and distribution related to such products. Orders filled from the Company’s inventory are generally for less than container-sized lots.

Direct import sales are products sold by the Company’s Asian subsidiary, directly to major U.S. retailers, who take ownership of the products in Asia. These sales are completed by delivering products to the customers’ common carriers at the shipping points in Asia. Direct import sales are made in larger quantities than domestic sales, typically full containers. Direct import sales represented approximately 5% and 7% of the Company’s total net sales for the three and nine months ended September 30, 2024 compared to approximately 7% for the same periods in 2023.

The chief operating decision maker evaluates the performance of each operating segment based on segment revenues and operating income. Segment revenues are defined as total revenues, including both external customer revenue and inter-segment revenue. Segment operating earnings are defined as segment revenues, less cost of goods sold and operating expenses. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Inter-segment amounts are eliminated to arrive at consolidated financial results.

The following table sets forth certain financial data by segment for the three and nine months ended September 30, 2024 and 2023:

Financial data by segment:

(in thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
Sales to external customers:	2024			2023		2024			2023
United States	$	41,131		$	43,688	$	126,579		$	127,743
Canada		3,287			3,305		10,384			10,938
Europe		3,748			3,391		11,584			10,878
Consolidated	$	48,166		$	50,384	$	148,547		$	149,559
Operating income:
United States	$	2,809		$	3,420	$	10,681		$	9,451
Canada		59			34		803			995
Europe		58			203		375			650
Consolidated	$	2,926		$	3,657	$	11,859		$	11,096
Interest expense, net		535			784		1,517			2,517
Other (income) expense, net		(17	)		55		(90	)		9
Consolidated income before income taxes	$	2,408		$	2,818	$	10,432		$	8,570

Assets by segment:

(in thousands)

	September 30,		December 31,
	2024		2023
United States	$	144,634	$	131,382
Canada		11,201		8,557
Europe		9,638		9,302
Consolidated	$	165,473	$	149,241