Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENTS

v3.25.0.1
SEGMENTS
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENTS SEGMENTS
The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM, which is the Company’s Chief Executive Officer, allocates resources and assesses the performance of each operating segment based on historical and potential future product sales, gross margin associated with those sales, and operating income (loss) before interest, taxes, and corporate expenses. The Company has determined its reportable segments to be Aerospace and Test Systems based on the information used by the CODM.
Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:
(In thousands) 2024 2023 2022
Sales:
Aerospace $ 706,746  $ 605,001  $ 461,206 
Less Inter-segment Sales (62) (171) (10)
Total Aerospace Sales 706,684  604,830  461,196 
Test Systems 88,874  84,376  73,717 
Less Inter-segment Sales (132) —  (19)
Test Systems 88,742  84,376  73,698 
Total Consolidated Sales $ 795,426  $ 689,206  $ 534,894 
Less1
Cost of Products Sold:
Aerospace $ 549,017  $ 499,948  $ 399,834 
77.7  % 82.7  % 86.7  %
Test Systems $ 78,067  $ 68,462  $ 63,520 
88.0  % 81.1  % 86.2  %
Other Segment Items2
Aerospace $ 95,261  $ 80,253  $ 63,245 
Test Systems $ 19,152  $ 24,659  $ 18,296 
Operating Income (Loss) and Margins:
Aerospace $ 62,406  $ 24,629  $ (1,883)
8.8  % 4.1  % (0.4) %
Test Systems (8,477) (8,745) (8,118)
(9.6) % (10.4) % (11.0) %
Total Operating Income (Loss) $ 53,929  $ 15,884  $ (10,001)
6.8  % 2.3  % (1.9) %
Additions to (Deductions from) Operating Profit:
Net Gain on Sale of Businesses $ —  $ 3,427  $ 11,284 
Loss on Extinguishment of Debt (10,148) —  — 
Interest Expense, Net of Interest Income (21,998) (23,328) (9,422)
Corporate and Other Expenses, Net (29,650) (22,294) (21,654)
Loss before Income Taxes $ (7,867) $ (26,311) $ (29,793)
1 The significant expenses and amounts presented align with the segment-level information that is regularly provided to the CODM. Inter-segment expenses are included within the amounts shown.
2 Other segment items include Selling, General and Administrative Expenses and sublease and rental income.

(In thousands) 2024 2023 2022
Depreciation and Amortization:
Aerospace $ 19,458  $ 20,801  $ 22,384 
Test Systems 4,813  5,068  4,341 
Corporate 195  235  1,052 
Total Depreciation and Amortization $ 24,466  $ 26,104  $ 27,777 
Assets:
Aerospace $ 498,528  $ 493,660 
Test Systems 128,828  122,681 
Corporate 21,408  17,451 
Total Assets $ 648,764  $ 633,792 
Capital Expenditures:
Aerospace $ 7,346  $ 5,003  $ 4,289 
Test Systems 1,066  2,640  3,299 
Corporate 16  —  87 
Total Capital Expenditures $ 8,428  $ 7,643  $ 7,675 
During the year ended December 31, 2024 and 2023, reserves associated with customer bankruptcies of $3.2 million and $11.1 million, respectively, negatively impacted Aerospace Operating Income. Aerospace Operating Income in the years ended December 31, 2024 and 2023 include compensation expense related to resumed incentive programs including bonuses, 401K and profit sharing contributions of $19.9 million and $6.7 million, respectively. In the year ended December 31, 2022, $6.0 million of the AMJP grant was recognized as an offset to the cost of products sold in the Aerospace segment.
During the year ended December 31, 2023, $5.8 million was recognized in sales related to the reversal of a deferred revenue liability assumed with an acquisition and associated with a customer program within our Test Systems Segment which is no longer expected to occur, which also benefits Test Systems’ operating loss for the year.
Corporate expenses and other for the year ended December 31, 2023, includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we are no longer required to make the associated payment. This amount is included in Other Income, Net.
The following table summarizes the Company’s sales into the following geographic regions for the years ended December 31:
(In thousands) 2024 2023 2022
United States $ 593,943  $ 518,096  $ 419,431 
North America (excluding United States) 13,107  14,878  9,222 
Asia 44,176  26,165  21,242 
Europe 139,384  123,682  78,625 
South America 1,445  2,071  3,629 
Other 3,371  4,314  2,745 
Total $ 795,426  $ 689,206  $ 534,894 
The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:
(In thousands) 2024 2023
United States $ 73,749  $ 77,939 
France 5,625  6,417 
India 357  487 
Canada 956  593 
Total $ 80,687  $ 85,436 
Sales recorded by the Company’s foreign operations were $82.1 million, $69.3 million and $50.0 million in 2024, 2023 and 2022, respectively. Net income (loss) from foreign operations was $7.6 million, $5.3 million and $(0.2) million in 2024, 2023
and 2022, respectively. Net assets held outside of the U.S. total $41.3 million and $39.1 million at December 31, 2024 and 2023, respectively. The exchange gain (loss) included in determining net income (loss) was insignificant in 2024, 2023 and 2022. Cumulative translation adjustments amounted to $8.2 million and $6.4 million at December 31, 2024 and 2023, respectively.
The Company has a significant concentration of business with The Boeing Company (“Boeing”). Sales to Boeing are primarily in the Aerospace segment. The following is information relating to the activity with this customer:
2024 2023 2022
Percent of Consolidated Sales
Boeing 10.2% 11.0% 11.0%
(In thousands) 2024 2023
Accounts Receivable at December 31,
Boeing $ 10,474  $ 17,314