Industry Segments

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Industry Segments

16.  Industry Segments

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. The Company accounts for intersegment sales and transfers at cost plus a reasonable margin.

The Material Handling Segment manufactures a broad selection of plastic reusable containers, 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 undervehicle 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 five 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, auto dealers, general service and repair centers, tire retreaders, and government agencies. The acquisition of Tuffy, described in Note 3, is included within the Distribution Segment.

Total sales from foreign business units were approximately $11.7 million and $9.8 million for the quarters ended September 30, 2021 and 2020, respectively, and $34.8 million and $28.0 million for the nine months ended September 30, 2021 and 2020.

Summarized segment detail for the quarters and nine months ended September 30, 2021 and 2020 are presented in the following table:

	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net Sales
Material Handling	$	149,664		$	86,769		$	416,784		$	251,700
Distribution		50,413			45,517			145,119			121,253
Inter-company sales		(19	)		(28	)		(47	)		(51	)
Total net sales	$	200,058		$	132,258		$	561,856		$	372,902
Operating income
Material Handling (3)	$	15,066		$	15,593		$	49,895		$	46,556
Distribution (1)		4,377			5,091			10,029			8,577
Corporate (1) (2) (4)		(7,626	)		(7,544	)		(21,373	)		(6,439	)
Total operating income		11,817			13,140			38,551			48,694
Interest expense, net		(1,056	)		(1,204	)		(3,050	)		(3,467	)
Income before income taxes	$	10,761		$	11,936		$	35,501		$	45,227

(1) 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.

(2) In the nine months ended September 30, 2020, the Company recognized in Corporate an $11.9 million gain on the sale of notes receivable as described in Note 4.

(3) 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 5.

(4) In the three and nine months ended September 30, 2021, the Company incurred in Corporate acquisition and integration costs totaling $0.5 million and $0.8 million, respectively, related to the Trilogy and Elkhart Plastics acquisitions described in Note 3.