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Note 16 - Segment Information
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

16.

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. The CODM evaluates performance and allocates resources based primarily on operating income. The operating segments are based primarily on internal management reporting.

 

The Company operates in three reportable segments; specialty metals flat products, carbon flat products, and tubular and pipe products. The specialty metals flat products segment and the carbon flat products segment are at times consolidated and referred to as the flat products segments, as certain of the flat products segments’ assets and resources are shared by the specialty metals and carbon flat products segments and both segments’ products are stored in the shared facilities and, in some locations, processed on shared equipment. Since the January 3, 2023 acquisition, Metal-Fab’s financial results are included in the carbon flat products segment.

 

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 compensation 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 six months ended June 30, 2023 and 2022, respectively.

 

   

For the Three Months Ended

    

For the Six Months Ended

  
   

June 30,

    

June 30,

  

(in thousands)

  

2023

    

2022

    

2023

    

2022

  
Net sales                                

Specialty metals flat products

   $ 147,000     $ 226,964     $ 313,564     $ 426,443  

Carbon flat products

     326,629       370,665       636,447       750,214  

Tubular and pipe products

     95,639       111,547       192,333       228,852  

Total net sales

   $ 569,268     $ 709,176     $ 1,142,344     $ 1,405,509  
                                 
Depreciation and amortization                                

Specialty metals flat products

   $ 1,023     $ 1,008     $ 2,007     $ 2,013  

Carbon flat products

     3,716       2,698       7,323       5,372  

Tubular and pipe products

     1,716       1,222       3,309       2,508  

Corporate

     18       18       35       35  

Total depreciation and amortization

   $ 6,473     $ 4,946     $ 12,674     $ 9,928  
                                 
Operating income                                

Specialty metals flat products

   $ 6,679     $ 36,473     $ 15,938     $ 70,557  

Carbon flat products

     14,695       15,618       20,641       25,493  

Tubular and pipe products

     9,371       7,300       19,112       21,882  

Corporate expenses

     (4,973 )     (5,526 )     (12,196 )     (10,945 )

Total operating income

   $ 25,772     $ 53,865     $ 43,495     $ 106,987  

Other loss, net

     28       15       39       21  

Income before interest and income taxes

     25,744       53,850       43,456       106,966  

Interest and other expense on debt

     4,203       2,271       8,426       4,269  

Income before income taxes

   $ 21,541     $ 51,579     $ 35,030     $ 102,697  

 

 

   

For the Six Months Ended

  
   

June 30,

  

(in thousands)

  

2023

    

2022

  
Capital expenditures                

Flat products segments

   $ 8,977     $ 8,236  

Tubular and pipe products

     6,083       1,786  

Corporate

     57       -  

Total capital expenditures

   $ 15,117     $ 10,022  

 

   

As of

  
   

June 30,

    

December 31,

  

(in thouands)

  

2023

    

2022

  

Assets

                

Flat products segments

   $ 737,819     $ 631,607  

Tubular and pipe products

     274,562       258,412  

Corporate

     1,601       1,608  

Total assets

   $ 1,013,982     $ 891,627  

 

There were no material revenue transactions between the specialty metals products, carbon flat products and tubular and pipe products segments.

 

The Company sells certain products internationally, primarily in Canada and Mexico. International sales are immaterial to the consolidated financial results and to the individual segments’ results.