| Business Segment Information and Geographic Area Information |
Note 12 – Business Segment Information and Geographic Area Information The Company defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated regularly by the Company’s chief executive officer, who is the Chief Operating Decision Maker (“CODM”), in order to assess performance and allocate resources. Characteristics of the Company which were relied upon in making the determination of reportable segments include the geographic region in which the Company operates and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources. The Company’s operations are viewed in geographic regions of North America, South America, EMEA, and Asia which are the Company’s four reportable segments under ASC 280. The primary business of each of the geographic regions is manufacturing and selling cellulosic food casings. The Company’s casing products have similar characteristics and customers and share operations support functions such as sales, public relations, supply chain management, various research and development support, in addition to the general and administrative functions of human resources, legal, finance, and information technology. The Company uses Operating Income, which is defined as profit or loss from operations before interest income, interest expense, other expense, net and income taxes, to assess the profitability of each segment. The Company’s reporting package does not include interest revenue, interest expense or income taxes allocated to individual segments and these items are not considered components of segment operating income. The CODM monitors actual Operating Income results relative to operating plan and forecast to assess the performance of the business and allocate resources. Segment assets regularly reviewed by the CODM are inclusive only of inventory. The following table reflects the results of the Company’s segments: | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2026 | | | North | | South | | | | | | Elimination | | | | | | America | | America | | EMEA | | Asia | | and other | | Consolidated | Sales from external customers | | $ | 36,234 | | $ | 11,040 | | $ | 34,332 | | $ | 8,525 | | $ | — | | $ | 90,131 | Intersegment net sales | | | 5,141 | | | — | | | 15,706 | | | — | | | — | | | 20,847 | | | | 41,375 | | | 11,040 | | | 50,038 | | | 8,525 | | | — | | | 110,978 | | | | | | | | | | | | | | | | | | | | Reconciliation of revenue | | | | | | | | | | | | | | | | | | | Elimination of intersegment sales | | | | | | | | | | | | | | | (20,847) | | | (20,847) | Total consolidated net sales | | | | | | | | | | | | | | | | | $ | 90,131 | | | | | | | | | | | | | | | | | | | | Cost of sales | | | (37,936) | | | (10,300) | | | (43,448) | | | (8,200) | | | 20,851 | | | (79,033) | Selling and marketing | | | (1,053) | | | (417) | | | (952) | | | (57) | | | — | | | (2,479) | General and administrative | | | (5,373) | | | (476) | | | (3,041) | | | (132) | | | — | | | (9,022) | Research and development | | | (488) | | | (15) | | | (116) | | | (30) | | | — | | | (649) | Amortization of intangibles | | | (28) | | | (125) | | | (381) | | | — | | | — | | | (535) | Asset impairment charge | | | (226) | | | — | | | — | | | — | | | — | | | (226) | Restructuring expense and related expense | | | (203) | | | — | | | — | | | — | | | — | | | (203) | Segment operating income | | | (3,932) | | | (293) | | | 2,100 | | | 106 | | | 4 | | | (2,015) | | | | | | | | | | | | | | | | | | | | Interest expense, net | | | | | | | | | | | | | | | | | | 2,704 | Other (expense) income, net | | | | | | | | | | | | | | | | | | 109 | Net (loss) income before income taxes | | | | | | | | | | | | | | | | | $ | (4,828) |
| | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2025 | | | North | | South | | | | | | | | Elimination | | | | | | America | | America | | EMEA | | Asia | | and other | | Consolidated | Sales from external customers | | $ | 41,209 | | $ | 11,596 | | $ | 34,115 | | $ | 10,359 | | $ | — | | $ | 97,279 | Intersegment net sales | | | 5,794 | | | 7 | | | 10,488 | | | 1,549 | | | — | | | 17,838 | | | | 47,003 | | | 11,603 | | | 44,603 | | | 11,908 | | | — | | | 115,117 | | | | | | | | | | | | | | | | | | | | Reconciliation of revenue | | | | | | | | | | | | | | | | | | | Elimination of intersegment sales | | | | | | | | | | | | | | | (17,838) | | | (17,838) | Total consolidated net sales | | | | | | | | | | | | | | | | | $ | 97,279 | | | | | | | | | | | | | | | | | | | | Cost of sales | | | (40,801) | | | (10,447) | | | (41,469) | | | (10,777) | | | 17,849 | | | (85,645) | Selling and marketing | | | (1,108) | | | (255) | | | (860) | | | (62) | | | — | | | (2,285) | General and administrative | | | (6,421) | | | (557) | | | (2,816) | | | (182) | | | — | | | (9,976) | Research and development | | | (536) | | | (10) | | | (107) | | | (15) | | | — | | | (668) | Amortization of intangibles | | | (25) | | | — | | | (363) | | | — | | | — | | | (388) | Asset impairment charge | | | — | | | — | | | — | | | — | | | — | | | — | Restructuring expense and related expense | | | (821) | | | (126) | | | — | | | — | | | — | | | (947) | Segment operating income | | | (2,709) | | | 208 | | | (1,012) | | | 872 | | | 11 | | | (2,630) | | | | | | | | | | | | | | | | | | | | Interest expense, net | | | | | | | | | | | | | | | | | | (2,837) | Other (expense) income, net | | | | | | | | | | | | | | | | | | (438) | Net (loss) income before income taxes | | | | | | | | | | | | | | | | | $ | (5,905) |
| | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2026 | | | North America | | South America | | EMEA | | Asia | | Elimination | | Consolidated | Sales from external customers | | $ | 69,609 | | $ | 22,427 | | $ | 68,231 | | $ | 16,401 | | $ | — | | $ | 176,668 | Intersegment net sales | | | 8,257 | | | — | | | 33,431 | | | 4 | | | — | | | 41,692 | | | | 77,866 | | | 22,427 | | | 101,662 | | | 16,405 | | | — | | | 218,360 | | | | | | | | | | | | | | | | | | | | Reconciliation of revenue | | | | | | | | | | | | | | | | | | | Elimination of intersegment sales | | | | | | | | | | | | | | | (41,692) | | | (41,692) | Total consolidated net sales | | | | | | | | | | | | | | | | | $ | 176,668 | | | | | | | | | | | | | | | | | | | | Cost of sales | | | (72,521) | | | (20,518) | | | (90,120) | | | (15,103) | | | 41,692 | | | (156,570) | Selling and marketing | | | (2,068) | | | (849) | | | (1,943) | | | (123) | | | — | | | (4,983) | General and administrative | | | (11,287) | | | (995) | | | (5,742) | | | (370) | | | — | | | (18,394) | Research and development | | | (877) | | | (26) | | | (244) | | | (60) | | | — | | | (1,207) | Amortization of intangibles | | | (57) | | | (245) | | | (768) | | | — | | | — | | | (1,071) | Asset impairment charge | | | (226) | | | — | | | — | | | — | | | — | | | (226) | Restructuring expense and related expense | | | (566) | | | — | | | — | | | — | | | — | | | (566) | Segment operating income | | | (9,736) | | | (206) | | | 2,845 | | | 749 | | | — | | | (6,348) | | | | | | | | | | | | | | | | | | | | Interest expense, net | | | | | | | | | | | | | | | | | | 5,528 | Other (expense) income, net | | | | | | | | | | | | | | | | | | (1,074) | Net (loss) income before income taxes | | | | | | | | | | | | | | | | | $ | (10,802) |
| | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2025 | | | | | | | | | | | | | | | Elimination | | | | | | North America | | South America | | EMEA | | Asia | | and other | | Consolidated | Sales from external customers | | $ | 84,694 | | $ | 22,918 | | $ | 64,131 | | $ | 19,724 | | $ | — | | $ | 191,467 | Intersegment net sales | | | 15,620 | | | 80 | | | 21,532 | | | 1,549 | | | — | | | 38,781 | | | | 100,314 | | | 22,998 | | | 85,663 | | | 21,273 | | | — | | | 230,248 | | | | | | | | | | | | | | | | | | | | Reconciliation of revenue | | | | | | | | | | | | | | | | | | | Elimination of intersegment sales | | | | | | | | | | | | | | | (38,781) | | | (38,781) | Total consolidated net sales | | | | | | | | | | | | | | | | | $ | 191,467 | | | | | | | | | | | | | | | | | | | | Cost of sales | | | (88,179) | | | (20,612) | | | (76,214) | | | (19,286) | | | 38,864 | | | (165,427) | Selling and marketing | | | (2,216) | | | (630) | | | (1,698) | | | (100) | | | — | | | (4,644) | General and administrative | | | (11,606) | | | (1,255) | | | (5,526) | | | (391) | | | — | | | (18,778) | Research and development | | | (1,068) | | | (21) | | | (209) | | | (30) | | | — | | | (1,328) | Amortization of intangibles | | | (53) | | | — | | | (697) | | | — | | | — | | | (750) | Asset impairment charge | | | (12,100) | | | — | | | — | | | — | | | — | | | (12,100) | Restructuring expense and related expense | | | (5,471) | | | — | | | — | | | — | | | — | | | (5,597) | Segment operating income | | | (20,379) | | | 480 | | | 1,319 | | | 1,466 | | | 83 | | | (17,031) | | | | | | | | | | | | | | | | | | | | Interest expense, net | | | | | | | | | | | | | | | | | | (5,597) | Other income (expense), net | | | | | | | | | | | | | | | | | | 1,717 | Net (loss) income before income taxes | | | | | | | | | | | | | | | | | $ | (20,911) |
The following table reflects the Company’s inventory by segment: | | | | | | | | | June 30, 2026 | | December 31, 2025 | North America | | $ | 33,494 | | $ | 30,678 | South America | | | 20,466 | | | 19,160 | EMEA | | | 36,330 | | | 37,767 | Asia | | | 15,006 | | | 9,150 | Consolidated inventory | | $ | 105,296 | | $ | 96,755 |
The following table reflects the Company’s expenditures for long-lived assets by segment: | | | | | | | | | June 30, 2026 | | December 31, 2025 | North America | | $ | 14,295 | | $ | 31,240 | South America | | | — | | | 890 | EMEA | | | 1,028 | | | 4,642 | Asia | | | 218 | | | 10 | Total expenditure for long- lived assets | | $ | 15,541 | | $ | 36,782 |
Geographic Information Total long-lived assets by country, which include property and equipment, net, operating lease right-of-use assets, net, and other assets, net, consists of the following: | | | | | | | | | June 30, 2026 | | December 31, 2025 | United States | | $ | 103,667 | | $ | 92,876 | France | | | 27,749 | | | 29,630 | Brazil | | | 11,286 | | | 12,337 | Poland | | | 10,509 | | | 11,671 | Philippines | | | 7,567 | | | 8,356 | Other international | | | 14,813 | | | 16,220 | Consolidated long-lived assets | | $ | 175,591 | | $ | 171,090 |
|