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Note 12 - Segment Information
 9 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
12.     
     
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 primarily 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. Prior year financial information has been recast to reflect the new segment reporting structure.
 
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 three and nine months ended September 30, 2015 and 2014.
 
 
 
 
 
For the Three Months Ended
 
 
For the Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
(in thousands)
 
2015
 
 
2014
 
 
2015
 
 
2014
 
Net sales
                                
Carbon flat products
   $ 176,656     $ 256,121     $ 614,408     $ 759,045  
Specialty metals flat products
     46,470       56,655       151,816       159,789  
Tubular and pipe products
     53,796       63,841       171,814       190,743  
Total net sales
   $ 276,922     $ 376,617     $ 938,038     $ 1,109,577  
                                 
Depreciation and amortization
                                
Carbon flat products
   $ 2,905     $ 3,033     $ 9,213     $ 11,080  
Specialty metals flat products
     175       200       525       602  
Tubular and pipe products
     1,527       1,383       4,480       4,249  
Corporate
     25       25       76       75  
Total depreciation and amortization
   $ 4,632     $ 4,641     $ 14,294     $ 16,006  
                                 
Operating income (loss)
                                
Carbon flat products (a)
   $ (1,100 )   $ 905     $ (929 )   $ 9,826  
Specialty metals flat products (a)
     (358 )     2,460       (340 )     4,802  
Tubular and pipe products
     3,685       2,804       10,443       9,094  
Corporate expenses
     (1,774 )     (2,052 )     (5,323 )     (6,268 )
Goodwill and intangible asset impairment (b)
     -       -       (24,451 )     -  
Total operating income (loss)
  $ 453     $ 4,117     $ (20,600 )   $ 17,454  
Other income (loss), net
     (84 )     (20 )     (141 )     (22 )
Income (loss) before interest and income taxes
     369       4,097       (20,741 )     17,432  
Interest and other expense on debt
     1,405       1,602       4,439       5,134  
Income (loss) before income taxes
   $ (1,036 )   $ 2,495     $ (25,180 )   $ 12,298  
 
(a) $423 of costs and expenses were reallocated from the carbon to the specialty metals flat products segments related to
the first six months of 2015. This decreased the operating loss for the carbon flat products segment and increased the
operating loss for the specialty metals flat products segment. There was no impact to the consolidated operating income as a result of the reallocation.
(b) The goodwill and intangible asset impairments relate to the Company's tubular and pipe products segment.
 
 
 
 
For the Three Months Ended
 
 
For the Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
(in thousands)
 
2015
 
 
2014
 
 
2015
 
 
2014
 
Capital expenditures
                                
Flat products segments
   $ 1,148     $ 1,631     $ 3,254     $ 4,861  
Tubular and pipe products
     636       459       2,763       2,332  
Corporate
    -       -       -       21  
Total capital expenditures
   $ 1,784     $ 2,090     $ 6,017     $ 7,214  
 
 
 
 
As of
 
 
 
September 30,
 
 
December 31,
 
(in thousands)
 
2015
 
 
2014
 
Goodwill
                
Flat products segments
   $ 500     $ 500  
Tubular and pipe products
     -       16,451  
Total goodwill
   $ 500     $ 16,951  
                 
Assets
                
Flat products segments
   $ 383,131     $ 496,253  
Tubular and pipe products
     181,385       203,937  
Corporate
     482       558  
Total assets
   $ 564,998     $ 700,748  
 
There were no material revenue transactions between the carbon flat products, specialty metals products, and tubular and pipe products segments.
 
 
The Company sells certain products internationally, primarily in Canada, Puerto Rico and Mexico. International sales are immaterial to the consolidated financial results and to the individual segments’ results.