Note 15 - Segment Information

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

15. Segment Information:

The Company follows the accounting guidance that requires the utilization of a “management approach” to define and report the financial results of operating segments. The management approach defines operating segments along the lines used by the Company’s chief operating decision maker (CODM) to assess performance and make operating and resource allocation decisions. Our CODM evaluates performance and allocates resources based primarily on operating income (loss). Our operating segments are based on internal management reporting.

Commencing with the first quarter of 2015, the flat products segment has been separated into two reportable segments; carbon flat products and specialty metals flat products. The flat products segments’ assets and resources are shared by the carbon and specialty metals segments and both segments’ products are stored in the shared facilities and processed on the shared equipment. As such, total assets and capital expenditures are reported in the aggregate for the flat products segments. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the carbon flat products segment and the specialty metals flat products segment based upon an established allocation methodology. 2014 financial information has been recast to reflect the new segment reporting structure. Due to system limitations, 2013 financial information is presented for the consolidated flat products segments.

The Company now operates in three reportable segments; carbon flat products, specialty metals flat products, and tubular and pipe products. Through its carbon flat products segment, the Company sells and distributes large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Through its specialty metals flat products segment, the Company sells and distributes processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. Through its tubular and pipe products segment, the Company distributes metal tubing, pipe, bar, valve and fittings and fabricates pressure parts supplied to various industrial markets.

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all three segments), including payroll expenses for certain personnel, expenses related to being a publicly traded entity such as board of directors expenses, audit expenses, and various other professional fees.

The following table provides financial information by segment and reconciles the Company’s operating income by segment to the consolidated income before income taxes for the years ended December 31, 2015, 2014 and 2013. The Company assesses the performance of the segments based on operating income.

	For the Year Ended December 31,
(in thousands)	2015			2014			2013 (a)
Net sales
Carbon flat products	$	765,400		$	985,039			n/a
Specialty metals flat products		192,516			206,692			n/a
Consolidated flat products		957,916			1,191,731			1,026,769
Tubular and pipe products		217,627			244,539			236,562
Total net sales	$	1,175,543		$	1,436,270		$	1,263,331
Depreciation and amortization
Carbon flat products	$	12,200		$	14,250			n/a
Specialty metals flat products		698			805			n/a
Consolidated flat products		12,898			15,055			16,883
Tubular and pipe products		6,036			5,624			5,308
Corporate		102			101			50
Total depreciation and amortization	$	19,036		$	20,780		$	22,241
Operating income
Carbon flat products	$	(7,217	)	$	6,306			n/a
Specialty metals flat products		(1,074	)		6,109			n/a
Consolidated flat products		(8,291	)		12,415			12,106
Tubular and pipe products		12,583			10,185			14,981
Corporate		(7,120	)		(7,972	)		(7,432	)
Goodwill and intangible asset impairment (b)		(24,951	)		(23,836	)		-
Total operating income (loss)	$	(27,779	)	$	(9,208	)	$	19,655
Other income (loss), net		(125	)		(126	)		(28	)
Income (loss) before interest and income taxes		(27,904	)		(9,334	)		19,627
Interest and other expense on debt		5,690			6,780			6,703
Income (loss) before income taxes	$	(33,594	)	$	(16,114	)	$	12,924

(a)	S egment i nformation for 2013 is not available for carbon flat products and specialty metals flat products due to system limitations.
(b)	$24,451 of the goodwill and intangible asset impairment in 2015 related to the tubular and pipe products segment, $500 related to the specialty metals flat products segment. The goodwill impairment in 2014 related to the tubular and pipe products segment.

(in thousands)	2015		2014		2013
Capital expenditures
Flat products	$	4,295	$	4,540	$	3,794
Tubular and pipe products		3,022		3,273		11,616
Corporate		-		21		688
Total capital expenditures	$	7,317	$	7,834	$	16,098
Goodwill
Flat products	$	-	$	500
Tubular and pipe products		-		16,451
Total goodwill	$	-	$	16,951
Assets
Flat products	$	329,885	$	496,253
Tubular and pipe products		183,129		203,937
Corporate		456		558
Total assets	$	513,470	$	700,748

There were no material revenue transactions between the carbon flat products, specialty metals flat products and tubular and pipe products segments for the years ended December 31, 2015, 2014 and 2013.

The Company sells certain products internationally, primarily in Canada, Puerto Rico and Mexico. International sales have been immaterial to the consolidated financial results and to the individual segment’s results.