Segment Information |
NOTE 16. SEGMENT INFORMATION
As a result of our August 21, 2017 acquisition of Sierra, we operate our business structure within two segments. These segments are defined based on the internal financial reporting used by management. Certain significant selling and general and administrative expenses are not allocated to the segments including non-cash stock compensation expense. Each segment is described below:
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Black Diamond segment, which includes Black Diamond Equipment, PIEPS, and SKINourishment, is a global leader in designing, manufacturing, and marketing innovative outdoor engineered equipment and apparel for climbing, mountaineering, trail running, backpacking, skiing, and a wide range of other year-round outdoor recreation activities. Black Diamond segment offers a broad range of products including: high performance activity-based apparel (such as shells, insulation, midlayers, pants and logowear); rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear); technical backpacks and high-end day packs; trekking poles; headlamps and lanterns; gloves and mittens; and skincare and other sport-enhancing products. We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes.
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Sierra segment, which includes Sierra, is an iconic American manufacturer of a wide range of high-performance bullets and ammunition for both rifles and pistols. These bullets are used for precision target shooting, hunting and military and law enforcement purposes.
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REI accounted for approximately 12%, 14% and 16% of our total sales from continuing operations for the years ended December 31, 2018, 2017, and 2016, respectively, and is included in the Black Diamond segment. No other single customer contributed more than 10% of our sales during those periods. We divide our product offerings into four primary categories of climb, mountain, ski and sport. During the year ended December 31, 2018, revenue for the categories of climb, mountain, ski and sport was 30%, 34%, 19% and 17%, respectively.
Financial information for our segments is as follows:
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Year Ended December 31,
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2018
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2017
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2016
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Sales to external customers:
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Black Diamond
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Domestic sales
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$
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86,432
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$
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81,166
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$
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76,079
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International sales
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90,314
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79,165
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72,110
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Total Black Diamond
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176,746
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160,331
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148,189
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Sierra
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Domestic sales
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26,105
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7,437
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-
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International sales
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9,290
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2,919
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-
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Total Sierra
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35,395
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10,356
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-
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Total sales to external customers
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212,141
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170,687
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148,189
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Segment operating income:
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Black Diamond
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11,102
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4,215
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1,695
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Sierra
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5,808
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(344)
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-
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Total segment operating income
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16,910
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3,871
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1,695
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Restructuring charge
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(137)
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(160)
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(1,395)
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Merger and integration
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-
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(82)
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-
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Transaction costs
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(503)
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(2,088)
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(290)
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Corporate and other expenses
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(8,458)
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(6,013)
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(5,447)
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Interest expense, net
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(1,339)
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(1,288)
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(2,876)
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Income (loss) before income tax
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$
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6,473
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$
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(5,760)
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$
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(8,313)
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There were no intercompany sales between the Black Diamond and Sierra segments for the periods presented. Restructuring charges for the periods presented relate to the Black Diamond segment.
Total assets by segment, as of December 31, 2018 and 2017, were as follows:
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December 31,
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2018
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2017
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Black Diamond
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$
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138,029
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$
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127,202
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Sierra
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72,796
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77,270
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Corporate
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2,303
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2,977
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$
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213,128
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$
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207,449
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On August 21, 2017, the Company purchased Sierra. Total assets of Sierra as of August 21, 2017 were $80,566. Capital expenditures, depreciation and amortization by segment is as follows.
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Year Ended December 31,
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2018
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2017
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2016
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Capital expenditures:
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Black Diamond
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$
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2,560
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$
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2,699
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$
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2,566
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Sierra
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805
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148
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-
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Total capital expenditures
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$
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3,365
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$
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2,847
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$
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2,566
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Depreciation:
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Black Diamond
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$
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2,469
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$
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2,254
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$
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2,264
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Sierra
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1,954
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629
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-
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Total depreciation
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$
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4,423
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$
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2,883
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$
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2,264
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Amortization:
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Black Diamond
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$
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1,099
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$
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1,081
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$
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1,075
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Sierra
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2,774
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1,295
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-
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Total amortization
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$
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3,873
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$
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2,376
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$
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1,075
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