Note 19 - Operations and Industry Segments and Geographic Areas

12 Months Ended

Sep. 27, 2014

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1 9 . OPERATIONS AND INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS

For management and reporting purposes, we divide our business into two segments: medical and custom products. This industry segment information corresponds to the markets in the United States and Canada for which we manufacture and distribute our various products. The following table summarizes certain information on industry segments:

	2014			2013			2012
Net sales:
Medical	$	42,334,896		$	47,531,676		$	46,452,008
Custom products		13,522,479			26,301,873			29,694,415
	$	55,857,375		$	73,833,549		$	76,146,423
Operating profit:
Medical	$	3,966,605		$	5,446,274		$	5,349,910
Custom products		257,997			2,509,105			2,797,465
		4,224,602			7,955,379			8,147,375
Corporate expense		(614,022	)		(660,940	)		(637,310	)
Other income (expense)		18,187			(9,022	)		(44,092	)
Income before income taxes	$	3,628,767		$	7,285,417		$	7,465,973
Identifiable assets:
Medical	$	22,221,526		$	22,512,205		$	23,814,524
Custom products		3,991,467			5,769,403			9,030,782
Corporate		9,633,841			8,095,020			4,802,460
	$	35,846,834		$	36,376,628		$	37,647,766

	2014		2013		2012
Depreciation and amortization expenses:
Operating:
Medical	$	1,069,882	$	987,851	$	872,909
Custom products		218,234		296,754		336,114
Corporate		409		409		303
	$	1,288,525	$	1,285,014	$	1,209,326
Capital expenditures:
Medical	$	595,002	$	476,928	$	477,658
Custom products		75,843		80,935		206,669
	$	670,845	$	557,863	$	684,327

Geographic Areas:
Net sales:
United States	$	49,804,659	$	66,222,867	$	67,981,932
Canada		5,922,543		7,506,498		7,920,424
Other		130,173		104,184		244,067
	$	55,857,375	$	73,833,549	$	76,146,423
Property and Equipment, net:
United States	$	4,181,361	$	4,515,702	$	5,043,260
Canada		706,735		620,833		347,415
	$	4,888,096	$	5,136,535	$	5,390,675
Goodwill:
United States	$	1,924,131	$	1,924,131	$	1,924,131
Canada		2,367,712		2,563,415		2,686,484
	$	4,291,843	$	4,487,546	$	4,610,615
Intangibles, net:
United States	$	303,456	$	326,465	$	313,925
Canada		2,556,804		3,103,884		3,676,962
	$	2,860,260	$	3,430,349	$	3,990,887

Total sales by industry segment include sales to unaffiliated customers as reported in our statements of income. In calculating operating profit, non-allocable general corporate expenses, interest expense, other income and income taxes are not included, but certain corporate operating expenses incurred for the benefit of all segments are included on an allocated basis.

Identifiable assets are those assets that are used in the operations of each segment on an allocated basis. Amounts shown for corporate assets consist primarily of cash and cash surrender value of life insurance.

Included in the consolidated balance sheet at September 27, 2014 and September 28, 2013, are the net assets of Span Canada’s operations located in a single facility in Canada, which total approximately $10,000,000 and $11,000,000, respectively.

We have several customers whose sales represent significant portions of sales in their respective business segments. One of our medical customers acquired another of our medical customers during fiscal 2013. If the customers had been under common ownership since 2012, sales to that customer would have been 21% of net medical sales in fiscal 2013 and 17% in fiscal 2012. Sales to this customer were 22% of net medical sales in fiscal 2014.

Sales to another medical customer accounted for 11% of net medical sales in fiscal 2014 and 9% in fiscal years 2013 and 2012.

In the custom products segment, sales to one customer accounted for 66% of net custom products sales in fiscal 2014 and 88% in fiscal years 2013 and 2012.