Business and Geographic Segments

12 Months Ended

Dec. 31, 2019

Note 2 – Business and geographic segments:

Our operating segments are defined as components of our operations about which separate financial information is available that is regularly evaluated by our chief operating decision maker in determining how to allocate resources and in assessing performance. At December 31, 2019, we had two reportable operating segments – Security Products and Marine Components.

The Security Products segment, with a facility in South Carolina and a facility shared with Marine Components in Illinois, manufactures locking mechanisms and other security products for sale to the transportation, postal, office and institutional furniture, cabinetry, tool storage, healthcare and other industries.

Our Marine Components segment, with a facility in Wisconsin and a facility shared with Security Products in Illinois, manufactures and distributes stainless steel exhaust systems, gauges, throttle controls, wake enhancement systems, trim tabs and related hardware and accessories primarily for performance and ski/wakeboard boats.

The chief operating decision maker evaluates segment performance based on segment operating income, which is defined as income before income taxes, exclusive of certain general corporate income and expense items (primarily interest income) and certain non-recurring items (such as gains or losses on the disposition of long-lived assets outside the ordinary course of business). The accounting policies of the reportable operating segments are the same as those described in Note 1. Capital expenditures include additions to property and equipment, but exclude amounts attributable to business combinations.

Segment assets are comprised of all assets attributable to the reportable segments. Corporate assets are not attributable to the operating segments and consist primarily of cash, cash equivalents and note receivable from affiliate. For geographic information, the point of origin (place of manufacture) for all net sales is the U.S., the point of destination for net sales is based on the location of the customer, and property and equipment are attributable to their physical location. Intersegment sales are not material.

	Years ended December 31,
	2017			2018			2019
	(In thousands)
Net sales:
Security Products	$	96,600		$	98,383		$	99,328
Marine Components		15,435			19,834			24,915
Total net sales	$	112,035		$	118,217		$	124,243

Operating income (loss):
Security Products	$	19,182		$	21,947		$	21,013
Marine Components		1,342			2,738			3,644
Corporate		(5,289	)		(6,874	)		(6,991	)
Total operating income		15,235			17,811			17,666
Interest income		1,929			2,664			3,270
Income before taxes	$	17,164		$	20,475		$	20,936

Depreciation and amortization:
Security Products	$	3,072		$	2,914		$	3,056
Marine Components		591			535			627
Corporate		10			5			1
Total	$	3,673		$	3,454		$	3,684

	Years ended December 31,
	2017		2018		2019
	(In thousands)
Capital expenditures:
Security Products	$	2,389	$	2,126	$	1,530
Marine Components		405		991		1,636
Corporate		2		-		-
Total	$	2,796	$	3,117	$	3,166

Net sales point of destination:
United States	$	103,646	$	108,773	$	114,186
Canada		5,353		6,436		7,257
Mexico		1,486		1,438		922
Other		1,550		1,570		1,878
Total	$	112,035	$	118,217	$	124,243

	December 31,
	2017		2018		2019
	(In thousands)
Total assets:
Security Products	$	72,961	$	74,714	$	73,697
Marine Components		11,704		14,189		15,256
Corporate		66,294		77,526		89,591
Total	$	150,959	$	166,429	$	178,544

Intersegment sales are not material.

Net property and equipment for 2017, 2018 and 2019 is entirely located in the United States.