Note 12 - Segment Information

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12.   Segment Information

The Company designs and manufactures high-performance servo valves, including torque motors, hydraulic, and pneumatic valves. Its products are sold to commercial aerospace, government, medical, and industrial markets. The Company holds long-term contracts with prime defense contractors of the United States Government for military programs and original equipment manufacturers for commercial programs. For the years ended December 31, 2024 and 2023, domestic revenue accounted for approximately 75% and 72%, respectively, of total revenue, while revenue from international markets contributed the remaining portion. The Company manages its business activities on a consolidated basis and operates as one reportable segment.

The Company's Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM evaluates the Company’s performance and allocates resources based on long-term strategic objectives, operational results, and financial forecasts. Key performance metrics utilized by the CODM include revenue, gross profit, and operating loss as stated on the face of the financials and serve as a primary measure for assessing the overall business performance and tracking budget versus actual results. Employee compensation and benefits includes wages, retirement benefits, medical costs, and other employee-related expenses that are part of cost of goods sold and operating expenses as shown below.  Other costs of goods sold include, but are not limited to, material costs, temporary labor costs, insurance, and manufacturing overhead costs consisting of utilities, supplies and facility expenditures. Professional & legal expenses include, but not limited to, outside counsel and legal settlement costs, consulting, and accounting and tax-related service fees.  Other operating expenses include, but are not limited to, insurance, Board fees, IT, marketing, and R&D costs.

	Year Ended
(in thousands)	December 31, 2024			December 31, 2023
Revenue	$	44,917		$	43,629
Compensation & benefits		19,355			18,586
Other costs of goods sold		17,296			17,238
Total costs of goods sold	$	36,651		$	35,824
Gross profit	$	8,266		$	7,805
Compensation & benefits	$	4,756		$	4,322
Professional & legal		1,844			1,984
Other operating expenses		2,675			3,612
Total operating expenses	$	9,275		$	9,918
Operating loss	$	(1,009	)	$	(2,113	)