Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

10. Segment Information

The Company reports financial information based on the organizational structure used by management for making operating and investment decisions and for assessing performance. The Company’s reportable business segments include (1) United States; (2) Canada and (3) Europe. The financial results for the Company’s Asian operations have been aggregated with the results of its United States operations to form one reportable segment called the “United States segment”. Sales in the United States segment include both domestic sales as well as direct import sales. Each reportable segment derives its revenue from the sales of cutting devices, measuring instruments and first aid products for school, office, home, hardware, sporting goods and industrial use.

Domestic sales orders are filled from the Company’s distribution centers in North Carolina, Connecticut and Washington. 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 product 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 16% and 17% of the Company’s total net sales in 2014 and 2013, respectively.

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.

Financial data by segment:

2014
(000's omitted)	United States		Canada		Europe		Consolidated
Net sales	$	91,298	$	8,841	$	7,083	$	107,222
Operating income		6,760		625		9		7,394
Assets		70,525		4,363		4,419		79,308
Additions to property, plant and equipment		2,011		12		19		2,042
Depreciation and amortization		1,618		7		75		1,700
2013
Net sales	$	73,608	$	8,092	$	7,877	$	89,577
Operating income		5,082		557		240		5,879
Assets		57,068		5,329		5,682		68,079
Additions to property, plant and equipment		4,500		47		45		4,592
Depreciation and amortization		1,116		9		80		1,205

The following is a reconciliation of segment operating income to consolidated income before taxes:

	2014		2013
Total operating income	$	7,394	$	5,879
Interest expense, net		473		350
Other expense, net		118		35
Consolidated income before taxes	$	6,803	$	5,494
Net Income	$	4,789	$	4,003

The table below presents revenue by geographic area. Revenues are attributed to countries based on location of the customer.

Revenues	2014		2013
United States	$	90,366	$	72,676
International:
Canada		8,841		8,092
Europe		7,083		7,877
Other		932		932
Total International	$	16,856	$	16,901
Total Revenues	$	107,222	$	89,577