NOTE 12 – Segment Information

During fiscal 2017, the Company sold its non-core subsidiaries, Tekna Seal and ARC Wireless. Subsequently, in September 2017, the Company sold its non-core subsidiary, GF&F, which comprised the Flanges and Fittings Group segment. The completed divestiture of these non-core businesses has changed the way in which management and its chief operating decision maker evaluate performance and allocate resources. As a result, during the quarter ended June 30, 2018, the Company revised its business segments, consistent with its management of the business and internal financial reporting structure. Specifically, the Precision Components Group now includes the results of its plastic injection molding operations and its tooling product line, which were previously included within the 3DMT Group. During July 2018, the Company entered into an agreement to market 3DMT for possible sale which is now being reported as discontinued operations. In addition, its precision metal stamping operations are now reported within the newly created Stamping Group, which were previously included in the Precision Components Group.

As a result of the above transactions, the Company will report two segments as part of continuing operations: the Precision Components Group and the Stamping Group.

The Precision Components Group companies provide highly engineered, precision metal components using processes consisting of metal injection molding. It also includes our tooling product line and plastic injection molding. Industries served include aerospace, automotive, consumer durables, electronic devices, firearms and defense, and medical and dental devices.

The Stamping Group consists of our precision metal stamping operations, primarily servicing the automotive industry.

Summarized segment information for the three months ended September 30, 2018 and October 1, 2017 is as follows (in thousands):


	Three months ended
	September 30,		October 1,
	2018		2017
Sales:
Precision Components Group	$	15,685	$	14,333
Stamping Group		4,881		4,752
Consolidated sales	$	20,566	$	19,085

Operating costs:
Precision Components Group	$	14,789	$	15,270
Stamping Group		4,938		5,001
Consolidated operating costs	$	19,727	$	20,271

Segment operating income (loss):
Precision Components Group	$	896	$	(937)
Stamping Group		(57)		(249)
Corporate (1)		(863)		(937)
Total segment operating loss	$	(24)	$	(2,123)

Interest expense, net		(931)		(976)
Other income, net		26		(37)
Non-operating expense		(905)		(1,013)
Consolidated loss before income taxes and non-controlling interest	$	(929)	$	(3,136)

(1)

Corporate expense includes compensation and benefits, insurance, legal, accounting, consulting, and board of directors fees.