Note 11 - Segment Information

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

11. 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. During the three-month periods ended March 31, 2025, and March 31, 2024, domestic revenue accounted for approximately 70% and 75%, 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 profit (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 are 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.

	Three Months Ended
(in thousands)	March 31, 2025		March 31, 2024
Revenue	$	11,703	$	10,446
Compensation & benefits		4,998		4,818
Other costs of goods sold		4,345		3,893
Total costs of goods sold		9,343		8,711
Gross profit		2,360		1,735
Compensation & benefits		1,151		1,155
Professional & legal		429		255
Other operating expenses		538		608
Total operating expenses		2,118		2,018
Operating income (loss)	$	242	$	(283	)