Note L - Business Segments

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

L.   BUSINESS SEGMENTS:

The Company operates in three business segments.  The Company identifies its segments based on the Company's organization structure, which is primarily by principal products and is the way in which the Company’s Chief Operating Decision Maker (CODM), the Company’s CEO, makes operating decisions, assesses financial performance, and allocates resources.  The principal product groups are Housewares/Small Appliance, Defense, and Safety.  Sales for all segments are primarily to customers in North America. 

The Housewares/Small Appliance segment designs, markets, and distributes housewares and small appliances.  The housewares/small appliance products are sold primarily in the United States and Canada directly to retail outlets and also through independent distributors.  As more fully described in Note J, the Company primarily sources its Housewares/Small Appliance products from non-affiliated suppliers located in the Orient.  Sales are seasonal, with the normal peak sales period occurring in the fourth quarter of the year prior to the holiday season.

The Defense segment was started in 2001 with the acquisition of AMTEC Corporation, which manufactures precision mechanical and electromechanical assemblies for the U.S. Government and prime contractors.  During 2005, and again during 2010, AMTEC Corporation was one of two prime contractors selected by the Army to supply all requirements for the 40mm family of practice and tactical ammunition cartridges for a period of five years.  In 2016, AMTEC was awarded a one-year contract, and in 2017 and 2022, it was awarded third and fourth five-year contracts, respectively as the sole prime contractor.  AMTEC's manufacturing plant is located in Janesville, Wisconsin.  Since the inception of the Defense segment in 2001, the Company has expanded the segment by making several strategic business acquisitions, and has additional facilities located in East Camden, Arkansas; Antigo, Wisconsin; Clear Lake, South Dakota, and Marshall, Texas.  During 2003, the segment was expanded with the acquisition of Spectra Technologies, LLC of East Camden, Arkansas.  This facility performs Load, Assemble, and Pack (LAP) operations on ordnance-related products for the U.S. Government and prime contractors.  During 2006, the segment was expanded again with the acquisition of certain assets of Amron, LLC of Antigo, Wisconsin, which primarily manufactures cartridge cases used in medium caliber (20-50mm) ammunition.  During 2014, the Company continued the expansion of the Defense segment with the purchase of substantially all of the assets of Chemring Energetic Devices, Inc. located in Clear Lake, South Dakota, and all of the real property owned by Technical Ordnance Realty, LLC. The Clear Lake facility manufactures detonators, booster pellets, release cartridges, lead azide, and other military energetic devices and materials. During 2022, the Company again expanded the Defense segment by acquiring the equity interests of Woodlawn Manufacturing, Ltd. Woodlawn Manufacturing, Ltd, is a high volume manufacturer of precision metal parts and assemblies primarily for the defense and aerospace industry. See Note P. The Defense segment’s collection of facilities enables the Company to deliver in virtually all aspects of the manufacture of medium caliber training and tactical rounds.  Those aspects include the fuze, the detonator, the metal parts (including the cartridge case), and load, assemble and pack of the final round.

The Safety segment was started in 2019 with the acquisition of OneEvent Technologies, Inc., which focuses on protection for buildings, homes, assets, and occupants.  The company is located in Mount Horeb, Wisconsin and was established in 2014.  OneEvent's cloud-based learning and analytics engine utilizes a series of sensing devices integrated with a cellular gateway to predict, alert, and prevent.  Sensors measure a variety of environmental data including temperature, smoke, carbon monoxide, motion, humidity, water, and more.  On purchase, it was combined with Rusoh, Inc. which designed and marketed fire extinguishers.  Previous to 2019, Rusoh Inc. had been in included in the Company’s Housewares/Small Appliance segment. The Company divested Rusoh, Inc. on November 14, 2023, and recognized proceeds of $2,000,000 and a gain on sale before taxes of $351,000.  On July 29, 2022, certain assets were purchased and certain liabilities were assumed of Knox Safety, Inc., a company formed in 2019 with operations in Illinois and North Carolina.  Knox Safety is a startup company that designs and sells carbon monoxide detectors for residential use. Subsequent to the acquisition, the company legally adopted the corporate name Rely Innovations, Inc. See Note P.  

The Company manages and assesses the performance of its reportable segments by their gross profit and operating profit. As part of the CODM’s review of segment-level performance, the CODM reviews these measures of income of each reportable segment, which drives the evaluation of the performance of the Company’s reportable segments and allocation of resources to those segments. The significant segment expense categories included in the table below augment the Company’s understanding of operating results.

In the following summary, operating profit represents earnings before other income and income taxes.  The Company's segments operate discretely from each other with no shared owned or leased manufacturing facilities.  Costs associated with corporate activities (such as cash and marketable securities management) and the assets associated with such activities are included within the Housewares/Small Appliance segment for all periods presented.

	(in thousands)
	Housewares / Small Appliance		Defense		Safety			Total
Year ended December 31, 2024
External net sales	$	102,799	$	284,025		1,404		$	388,228
Cost of sales		77,321		225,852		6,489			309,662
Gross profit (loss)		25,478		58,173		(5,085	)		78,566
Selling and general expenses (1)		11,928		11,383		4,996			28,307
Depreciation and amortization		948		3,937		161			5,046
Operating profit (loss)		12,602		42,853		(10,242	)		45,213
Total assets		115,717		330,892		6,788			453,397
Capital expenditures		212		7,253		66			7,531
Year ended December 31, 2023
External net sales	$	97,619	$	241,703		1,590		$	340,912
Cost of sales		77,752		189,700		6,008			273,460
Gross profit (loss)		19,867		52,003		(4,418	)		67,452
Selling and general expenses (1)		11,485		9,082		5,845			26,412
Depreciation and amortization		1,030		4,635		342			6,007
Operating profit (loss)		7,352		38,286		(10,605	)		35,033
Total assets		191,902		242,272		6,362			440,536
Capital expenditures		488		1,168		184			1,840
Year ended December 31, 2022
External net sales	$	118,347	$	202,483		793		$	321,623
Cost of sales		100,925		159,845		5,728			266,498
Gross profit (loss)		17,422		42,638		(4,935	)		55,125
Selling and general expenses (1)		11,185		9,381		9,453			30,019
Depreciation and amortization		975		1,613		391			2,979
Operating profit (loss)		5,262		31,644		(14,779	)		22,127
Total assets		211,804		194,422		5,621			411,847
Capital expenditures		527		393		110			1,030
(1) Excluding depreciation and amortization.