SEGMENT REPORTING

12 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

We identify our segments based on our management structure and the financial information used by our chief executive officer, who is our chief operating decision maker, to assess segment performance and allocate resources among our operating units. Historically, we operated in one industry segment – the development, manufacture and sale of CMP consumables products. In connection with the Acquisition, we reassessed our operating and reportable segments, and determined that we have the following two reportable segments:

Electronic Materials

Electronic Materials includes products and solutions for the semiconductor industry and consists of our CMP slurries business, CMP pads business, and electronic chemicals business.

Performance Materials

Performance Materials consists of our PIM business, wood treatment business, and QED business.

Beginning in fiscal 2019 and with the Acquisition, our chief operating decision maker evaluates segment performance based upon revenue and segment adjusted EBITDA. Segment adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, adjusted for certain items that affect comparability from period to period.  These adjustments include items related to the Acquisition, such as Acquisition and integration-related expenses, the impact of fair value adjustments to inventory acquired from KMG, certain costs related to the KMG-Bernuth warehouse fire, net of insurance recovery, asset impairment charges and net restructuring charges related to the wood treatment business and costs related to the Pandemic, net of grants received. We exclude these items from earnings when presenting our adjusted EBITDA measure because we believe they are not indicative of a segment's regular, ongoing operating performance. Adjusted EBITDA is also the basis of a performance metric for our fiscal 2020 Short-Term Incentive Program. In addition, our chief operating decision maker does not use assets by segment to evaluate performance or allocate resources, and therefore, we do not disclose assets by segment.

Since the two segments operate independently and serve different markets and customers, as a result there are no sales between segments.  Revenue from external customers and segment adjusted EBITDA shown for Performance Materials for the year ended September 30, 2018 include the precision optics business. Revenue from external customers by segment are as follows:

	Year Ended September 30,
	2020		2019		2018
Segment Revenue:
Electronic Materials:
CMP Slurries	$	480,617	$	460,053	$	476,828
Electronic Chemicals	316,253		278,413		—
CMP Pads	85,954		94,585		83,117
Total Electronic Materials	882,824		833,051		559,945
Performance Materials:
PIM	141,503		140,553		—
Wood Treatment	62,655		31,898		—
QED	29,288		32,194		30,178
Total Performance Materials	233,446		204,645		30,178
Total	$	1,116,270	$	1,037,696	$	590,123

Capital expenditures by segment are as follows:

	Year Ended September 30,
	2020		2019		2018
Capital Expenditures:
Electronic Materials	$	26,536	$	40,166	$	18,668
Performance Materials	84,634		16,367		409
Corporate	11,344		5,663		3,918
Total	$	122,514	$	62,196	$	22,995

Adjusted EBITDA by segment is as follows:

	Year Ended September 30,
	2020		2019		2018
Net income	$	142,828	$	39,215	$	110,043
Interest expense	42,510		45,681		2,905
Interest income	(670)		(2,346)		(4,409)
Income taxes	30,519		23,891		51,668
Depreciation and amortization	127,737		98,592		25,876
EBITDA	342,924		205,033		186,083
Acquisition and integration-related expense	10,852		34,709		3,861
Charges related to asset impairment of wood treatment business	2,314		67,372		—
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	1,083		9,905		—
Costs related to the Pandemic, net of grants received	849		—		—
Charge for fair value write-up of acquired inventory sold	—		14,869		—
Net costs related to restructuring of the wood treatment business	(221)		1,530		—
Consolidated adjusted EBITDA	$	357,801	$	333,418	$	189,944
Segment adjusted EBITDA:
Electronic Materials	$	299,037	$	294,902	$	222,019
Performance Materials	106,797		91,372		7,191
Unallocated corporate expenses	(48,033)		(52,856)		(39,266)
Consolidated adjusted EBITDA	$	357,801	$	333,418	$	189,944

The unallocated portions of corporate functions, including finance, legal, human resources, information technology, and corporate development, are not directly attributable to a reportable segment.