Industry Segment and Geographic Data

12 Months Ended

Dec. 31, 2020

Industry Segment and Geographic Data [Abstract]

Industry Segment and Geographic Data

19. Industry Segment and Geographic Data

We have two major reportable operating segments, each of which focuses on a specific line of replacement parts.  Our Engine Management Segment manufactures and remanufactures ignition and emission parts, ignition wires, battery cables, fuel system parts and sensors for vehicle systems.  Our Temperature Control Segment manufactures and remanufactures air conditioning compressors, air conditioning and heating parts, engine cooling system parts, power window accessories and windshield washer system parts.

The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1). The following tables contain financial information for each reportable segment (in thousands):

	Year Ended December 31,
	2020			2019			2018
Net sales (a):
Engine Management	$	835,685		$	849,161		$	803,487
Temperature Control		281,954			278,355			278,456
Other		10,949			10,397			10,108
Total net sales	$	1,128,588		$	1,137,913		$	1,092,051
Intersegment sales (a):
Engine Management	$	15,952		$	19,569		$	23,367
Temperature Control		6,162			6,545			8,160
Other		(22,114	)		(26,114	)		(31,527	)
Total intersegment sales	$	—		$	—		$	—
Depreciation and Amortization:
Engine Management	$	20,417		$	19,463		$	17,858
Temperature Control		4,035			4,568			4,704
Other		1,871			1,778			1,542
Total depreciation and amortization	$	26,323		$	25,809		$	24,104
Operating income (loss):
Engine Management	$	111,217		$	103,808		$	84,844
Temperature Control		21,296			13,667			14,586
Other		(23,618	)		(22,980	)		(18,162	)
Total operating income	$	108,895		$	94,495		$	81,268
Investment in unconsolidated affiliates:
Engine Management	$	2,428		$	2,243		$	2,158
Temperature Control		38,079			36,615			30,311
Other		—			—			—
Total investment in unconsolidated affiliates	$	40,507		$	38,858		$	32,469
Capital expenditures:
Engine Management	$	13,496		$	12,593		$	11,435
Temperature Control		1,988			2,273			7,245
Other		2,336			1,319			1,461
Total capital expenditures	$	17,820		$	16,185		$	20,141
Total assets:
Engine Management	$	618,210		$	594,953		$	532,092
Temperature Control		230,111			216,591			202,411
Other		108,219			92,310			84,613
Total assets	$	956,540		$	903,854		$	819,116

(a) Segment net sales include intersegment sales in our Engine Management and Temperature Control segments.

Other consists of the elimination of intersegment sales from our Engine Management and Temperature Control segments, as well as items pertaining to our Canadian business unit that does not meet the criteria of a reportable operating segment and our corporate headquarters function.

Reconciliation of segment operating income to net earnings:

	Year Ended December 31,
	2020			2019			2018
	(In thousands)
Operating income	$	108,895		$	94,495		$	81,268
Other non-operating income (expense), net		812			2,587			(411	)
Interest expense		2,328			5,286			4,026
Earnings from continuing operations before taxes		107,379			91,796			76,831
Income tax expense		26,962			22,745			19,977
Earnings from continuing operations		80,417			69,051			56,854
Discontinued operations, net of tax		(23,024	)		(11,134	)		(13,851	)
Net earnings	$	57,393		$	57,917		$	43,003

	December 31,
	2020		2019		2018
Long-lived assets (a):	(In thousands)
United States	$	241,053	$	253,384	$	198,494
Canada		4,470		4,659		2,718
Mexico		10,586		12,036		4,012
Asia		40,621		38,942		32,470
Europe		16,504		17,004		16,880
Total long-lived assets	$	313,234	$	326,025	$	254,574

(a) Long-lived assets are attributed to countries based upon the location of the assets.

Our five largest individual customers accounted for approximately 68% of our consolidated net sales in 2020, approximately 69% of our consolidated net sales in 2019 and approximately 70% of our consolidated net sales in 2018. During 2020, O’Reilly, NAPA, Advance and AutoZone accounted for 26%, 15%, 14% and 11% of our consolidated net sales, respectively.  Net sales from each of the customers were reported in both our Engine Management and Temperature Control Segments. The loss of one or more of these customers or, a significant reduction in purchases of our products from any one of them, could have a materially adverse impact on our business, financial condition and results of operations.

In December 2020, a large retail customer informed us of its decision to pursue a private brand strategy for its engine management product line.  This customer has historically purchased $140 million of engine management products annually from us.  We anticipate that sales to this customer will continue through the first quarter of 2021.  In light of this development, we plan to take the necessary steps to reduce costs.

For the disaggregation of our net sales from contracts with customers by geographic area, major product group and major sales channels for each of our segments, see Note 20, “Net Sales.”