16.

Business Segment Information

The Company’s operations are organized and reviewed by management along its product lines and presented in three reportable segments. The results of the segments are reviewed through to the “Income from operations” line on the Statements of Income.

Engineered Equipment Technology and Parts Group (“EET&P”)

Our Engineered Equipment and Parts Group, located in the United States as well as the Netherlands, Canada, Brazil, China, and India, is comprised of Aarding, Adwest, AVC, CECO Abatement, CECO Filters, Busch International, Effox, Fisher-Klosterman, and Flextor. We enable our customers to meet Best Available Control Technology requirements and compliance targets for fumes, volatile organic compounds, process, and industrial odors. Our services eliminate toxic emission fumes and volatile organic compounds from large-scale industrial processes. Global industries served include refining, petrochemical, traditional power, natural gas power, aluminum, steel, automotive, chemical, and the largest industrial facilities.

Contracting / Services Group (“C/S”)

Our Contracting/Services Group is comprised of the contracting/services operations of our Kirk & Blum divisions. We provide custom metal fabrication services at our Kirk & Blum Columbia, Tennessee and Louisville, Kentucky locations. These facilities are used to fabricate parts, subassemblies, and customized products for air pollution and non-air pollution applications from sheet, plate, and structurals.

Component Parts Group (“CP”)

We market component parts for industrial air systems to contractors, distributors and dealers throughout the United States.

The accounting policies of the segments are the same as those in the consolidated financial statements.

Summary of Business by Segment


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2013		2012		2013		2012
Net Sales (less intra-, inter-segment sales)
Engineered Equipment Technology and Parts
United States	$	23,508	$	19,355	$	42,703	$	37,464
Netherlands		8,280		0		10,394		0
Canada		715		2,088		2,462		4,028
China		1,057		782		3,011		1,502
Brazil		0		0		0		121

subtotal		33,560		22,225		58,570		43,115
Contracting / Services		4,976		6,746		9,095		13,828
Component Parts		5,774		5,534		10,833		10,616
Corporate		123		87		296		59

Net sales	$	44,433	$	34,592	$	78,794	$	67,618


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2013			2012			2013			2012
Net Operating Income (Loss)
Engineered Equipment Technology and Parts	$	5,753		$	3,859		$	10,033		$	7,164
Contracting / Services		346			563			919			1,684
Component Parts		1,137			1,323			2,057			2,412
Corporate and other (a)		(3,686	)		(1,517	)		(6,151	)		(3,212	)
Eliminations		(243	)		57			(213	)		(16	)

Net operating income	$	3,307		$	4,285		$	6,645		$	8,032

(a)

Includes acquisition expenses, corporate compensation, professional services, information technology, and other general and administrative corporate expenses.


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2013		2012		2013		2012
Property and Equipment Additions
Engineered Equipment Technology and Parts	$	146	$	32	$	183	$	52
Contracting / Services		11		14		21		30
Component Parts		26		11		32		38
Corporate		0		2		0		12

Property and equipment additions	$	183	$	59	$	236	$	132


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2013		2012		2013		2012
Depreciation and Amortization
Engineered Equipment Technology and Parts	$	768	$	138	$	1,051	$	299
Contracting / Services		52		54		104		110
Component Parts		47		47		93		96
Corporate		32		53		65		105

Depreciation and Amortization	$	899	$	292	$	1,313	$	610


(dollars in thousands)	June 30, 2013		December 31, 2012
Identifiable Assets
Engineered Equipment Technology and Parts	$	99,772	$	60,516
Contracting / Services		6,355		8,055
Component Parts		6,423		5,573
Corporate (b)		5,010		19,960

Identifiable Assets (c)	$	117,560	$	94,104

(b)	Corporate assets primarily consists of cash and income tax related assets.

(c)	The Company has revised its business segment reporting primarily to exclude nontrade accounts receivable in order to better reflect the manner in which such assets are reviewed by management.


(dollars in thousands)	June 30, 2013		December 31, 2012
Goodwill
Engineered Equipment Technology and Parts	$	27,578	$	19,548

Intra-segment and Inter-segment Revenues

The Company has multiple divisions that sell to each other within segments (intra-segment sales) and between segments (inter-segment sales) as indicated in the following tables:


	Three months ended June 30, 2013
(dollars in thousands)	Total sales		Less intra- segment Sales			Less inter-segment sales										Net sales to outside customers
(dollars in thousands)	Total sales		Less intra- segment Sales			EE&P			C/S			CP		Corp. (a)		Net sales to outside customers
Net Sales
Engineered Equipment Technology and Parts
United States	$	24,561	$	(577	)	$	—		$	(476	)	$		$	—	$	23,508
Netherlands		8,280		—			—			—			—		—		8,280
China		2,022		(965	)		—			—			—		—		1,057
Canada		1,376		(661	)		—			—			—		—		715

Subtotal		36,239		(2,203	)		—			(476	)		—		—		33,560
Contracting / Services		5,230		(163	)		(91	)		—			—		—		4,976
Component Parts		6,099		(111	)		(2	)		(212	)		—		—		5,774
Corporate and other (a)		—		—			—			—			—		123		123

Net sales	$	47,568	$	(2,477	)	$	(93	)	$	(688	)	$	—	$	123	$	44,433


	Three months ended June 30, 2012
(dollars in thousands)	Total sales			Less intra- segment sales			Less inter-segment sales										Net sales to outside customers
(dollars in thousands)	Total sales			Less intra- segment sales			EE&P			C/S			CP		Corp. (a)		Net sales to outside customers
Net Sales
Engineered Equipment Technology and Parts
United States	$	19,506		$	(106	)	$	—		$	(45	)	$	—	$	—	$	19,355
China		1,614			(832	)		—			—			—		—		782
Canada		2,015			73			—			—			—		—		2,088
Brazil		—			—			—			—			—		—		—

Subtotal		23,135			(865	)		—			(45	)		—		—		22,225
Contracting / Services		6,866			(14	)		(106	)		—			—		—		6,746
Component Parts		5,832			(69	)		(13	)		(216	)		—		—		5,534
Corporate and other (a)		(5	)		—			—			—			—		92		87

Net sales	$	35,828		$	(948	)	$	(119	)	$	(261	)	$	—	$	92	$	34,592


	Six months ended June 30, 2013
(dollars in thousands)	Total sales		Less intra- segment Sales			Less inter-segment sales										Net sales to outside customers
(dollars in thousands)	Total sales		Less intra- segment Sales			EE&P			C/S			CP		Corp. (a)		Net sales to outside customers
Net Sales
Engineered Equipment Technology and Parts
United States	$	43,954	$	(775	)	$	—		$	(476	)	$	—	$	—	$	42,703
Netherlands		10,394		—			—			—			—		—		10,394
China		3,976		(965	)		—			—			—		—		3,011
Canada		3,133		(671	)		—			—			—		—		2,462

Subtotal		61,457		(2,411	)		—			(476	)		—		—		58,570
Contracting / Services		10,365		(207	)		(1,063	)		—			—		—		9,095
Component Parts		11,531		(270	)		(13	)		(415	)		—		—		10,833
Corporate and other (a)		—		—			—			—			—		296		296

Net sales	$	83,353	$	(2,888	)	$	(1,076	)	$	(891	)	$	—	$	296	$	78,794


	Six months ended June 30, 2012
(dollars in thousands)	Total sales		Less intra- segment sales			Less inter-segment sales										Net sales to outside customers
(dollars in thousands)	Total sales		Less intra- segment sales			EE&P			C/S			CP		Corp. (a)		Net sales to outside customers
Net Sales
Engineered Equipment Technology and Parts
United States	$	38,427	$	(353	)	$	—		$	(610	)	$	—	$	—	$	37,464
China		3,057		(1,555	)		—			—			—		—		1,502
Canada		3,955		73			—			—			—		—		4,028
Brazil		121		—			—			—			—		—		121

Subtotal		45,560		(1,835	)		—			(610	)		—		—		43,115
Contracting / Services		14,411		(48	)		(535	)		—			—		—		13,828
Component Parts		11,280		(147	)		(18	)		(499	)		—		—		10,616
Corporate and other (a)		19		—			—			(10	)		—		50		59

Net sales	$	71,270	$	(2,030	)	$	(553	)	$	(1,119	)	$	—	$	50	$	67,618

(a)	Includes adjustment for revenue on intercompany jobs.