The Company manages its business under two operating segments, Material Handling and Distribution, consistent with the manner in which the Chief Operating Decision Maker (“CODM”) evaluates performance and makes resource allocation decisions. None of the reportable segments include operating segments that have been aggregated. These segments contain individual business components that have been combined on the basis of common management, customers, products, production processes and other economic characteristics. Intersegment sales are recorded with a reasonable margin and are eliminated in consolidation.

The Material Handling Segment manufactures a broad selection of durable plastic reusable containers that are used repeatedly during the course of their service life. At the end of their service life, these highly sustainable products can be recovered, recycled, and reprocessed into new products. The Material Handling Segment’s products include pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, consumer fuel containers and tanks for water, fuel and waste handling. Products in the Material Handling Segment are primarily injection molded, rotationally molded or blow molded. This segment conducts its primary operations in the United States and Canada. Markets served include industrial manufacturing, food processing, retail/wholesale products distribution, agriculture, automotive, recreational vehicles, marine vehicles, healthcare, appliance, bakery, electronics, textiles and consumer, among others. Products are sold both directly to end-users and through distributors. The acquisitions of Trilogy and Elkhart Plastics, described in Note 3, are included in the Material Handling Segment.

The Distribution Segment is engaged in the distribution of equipment, tools, and supplies used for tire servicing and automotive under-vehicle repair and the manufacture of tire repair and retreading products. The product line includes categories such as tire valves and accessories, tire changing and balancing equipment, lifts and alignment equipment, service equipment and tools, and tire repair/retread supplies. The Distribution Segment also manufactures and sells certain traffic markings, including reflective highway marking tape. The Distribution Segment operates domestically through its sales offices and nine regional distribution centers in the United States, and in certain foreign countries through export sales. In addition, the Distribution Segment operates directly in certain foreign markets, principally Central America, through foreign branch operations. Markets served include retail and truck tire dealers, commercial auto and truck fleets, truck stop operations, auto dealers, general service and repair centers, tire re-treaders, and government agencies. The acquisition of Mohawk, described in Note 3, is included in the Distribution Segment.

Total sales from foreign business units were approximately $13.9 million and $11.7 million for the quarters ended September 30, 2022 and 2021, respectively, and $40.4 million and $34.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Summarized segment detail for the quarters and nine months ended September 30, 2022 and 2021 are presented in the following table:


	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
Net Sales
Material Handling	$	155,658		$	149,664		$	505,384		$	416,784
Distribution		72,416			50,413			181,352			145,119
Inter-company sales		(9	)		(19	)		(29	)		(47	)
Total net sales	$	228,065		$	200,058		$	686,707		$	561,856

Operating income
Material Handling (1)	$	23,962		$	15,066		$	83,216		$	49,895
Distribution (2)		4,899			4,377			12,469			10,029
Corporate (2) (3)		(8,964	)		(7,626	)		(28,766	)		(21,373	)
Total operating income		19,897			11,817			66,919			38,551
Interest expense, net		(1,719	)		(1,056	)		(4,077	)		(3,050	)
Income before income taxes	$	18,178		$	10,761		$	62,842		$	35,501

(1)

In the nine months ended September 30, 2021, the Company recognized a $1.0 million gain on the sale of a building within the Material Handling Segment as described in Note 4.

(2)

In the nine months ended September 30, 2021, the Company recognized $0.8 million of executive severance, of which $0.5 million was recognized in the Distribution Segment and $0.3 million was recognized in Corporate. This executive severance cost includes $0.5 million of severance and benefits and $0.3 million of charges for acceleration of stock compensation.

(3)

In the quarter and nine months ended September 30, 2022, the Company recognized $1.5 million and $2.8 million, respectively, of charges to increase the estimated environmental liability as described in Note 10. Environmental charges are not included in segment results and are shown with Corporate.