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Business segment information
 9 Months Ended
Sep. 30, 2012
Business segment information

Note 2 – Business segment information:

 

     Three months ended
September 30,		     Nine months ended
September 30,		  
     2011     2012     2011     2012  
     (In thousands)  

Net sales:

         

Security Products

    $ 18,077      $ 18,873      $ 54,261      $ 56,315   

Furniture Components

      15,588        15,828        44,630        46,383   

Marine Components

      2,071        2,409        6,864        7,541   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total net sales

    $ 35,736      $ 37,110      $ 105,755      $ 110,239   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income:

         

Security Products

    $ 3,550      $ 3,758      $ 10,911      $ 10,899   

Furniture Components

      711        2,708        8,351        5,804   

Marine Components

      (252 )      (181 )      (664 )      (330 ) 

Corporate operating expense

      (2,530 )      (1,940 )      (5,221 )      (5,190 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating income

      1,479        4,345        13,377        11,183   

Other non-operating income, net

      127        8        385        18   

Interest expense

      (218 )      (139 )      (617 )      (441 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

    $ 1,388      $ 4,214      $ 13,145      $ 10,760   
  

 

 

    

 

 

    

 

 

    

 

 

  

Intersegment sales are not material.

Furniture Components net sales in the third quarter and first nine months of 2012 include sales of approximately $1.0 million and $3.3 million, respectively, related to the Furniture Components ergonomics healthcare product line acquired in July 2011. Such sales were approximately $600,000 in the third quarter of 2011. The impact on operating income for all periods presented relating to the acquisition was not significant.

As discussed in our 2011 Annual Report, potential additional cash consideration related to the Furniture Components ergonomics healthcare product line acquired in July 2011, in an amount ranging from nil to approximately $1.5 million, was payable in the first quarter of 2013. The payment was contingent upon the achievement of certain acquired product line sales targets during 2012. The estimated fair value of such accrued consideration had been determined using a probability-weighted discounted cash flow methodology (Level 3 inputs as defined by ASC Topic 820-10-35), using a discount rate of approximately 4%. During the first nine months of 2012, the amount of the increase in accrued contingent consideration for the passage of time was not material. At September 30, 2012, we determined that it was remote that the sales target necessary for the minimum-level payout would be met and therefore the total amount of the contingent consideration liability was reversed into income. As a result, Furniture Components operating income for the third quarter and first nine months of 2012 includes approximately $778,000 in other operating income related to such reversal.

Furniture Components operating income for the third quarter of 2011 includes $175,000 of facility consolidation costs. Furniture Components operating income for the first nine months of 2011 includes (i) a patent litigation settlement gain of $7.5 million, (ii) patent litigation expenses of $227,000, and (iii) facility consolidation costs of approximately $2.0 million, for a total net positive impact of $5.3 million.

Corporate operating expenses include a write-down on assets held for sale of approximately $1.1 million in the third quarter and first nine months of 2011 compared to a $405,000 write-down on assets held for sale in the same comparative periods for 2012.