Segment Reporting

3 Months Ended

Dec. 31, 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. 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.

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 Acquisition and integration-related expenses, certain costs related to the KMG-Bernuth warehouse fire, net of insurance recovery, impairment 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 2021 Short-Term Incentive Program ("STIP"). 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.

The two segments operate independently and serve different markets and customers, as a result there are no sales between segments. Revenue from external customers by segment are as follows:

	Three Months Ended December 31,
	2020		2019
Segment Revenue:
Electronic Materials:
CMP Slurries	$	134,721	$	122,326
Electronic Chemicals	80,006		77,582
CMP Pads	22,071		20,813
Total Electronic Materials	236,798		220,721
Performance Materials:
PIM	25,907		45,141
Wood Treatment	17,323		10,674
QED	7,835		6,607
Total Performance Materials	51,065		62,422
Total	$	287,863	$	283,143

Capital expenditures by segment are as follows:

	Three Months Ended December 31,
	2020		2019
Capital Expenditures:
Electronic Materials	$	5,434	$	8,485
Performance Materials	1,310		16,369
Corporate	3,475		1,512
Total	$	10,219	$	26,366

Adjusted EBITDA by segment is as follows:

	Three Months Ended December 31,
	2020		2019
Net income	$	31,530	$	38,549
Interest expense	9,608		11,920
Interest income	(23)		(315)
Income taxes	7,546		10,881
Depreciation and amortization	31,891		31,642
EBITDA	80,552		92,677
Charges related to asset impairment of wood treatment	7,347		—
Acquisition and integration-related expenses	2,369		2,204
Costs related to the Pandemic, net of grants received	1,262		—
Net costs related to restructuring of the wood treatment business	26		—
Costs related to KMG-Bernuth warehouse fire, net of insurance recovery	—		392
Consolidated adjusted EBITDA	$	91,556	$	95,273
Segment adjusted EBITDA:
Electronic Materials	$	80,756	$	81,198
Performance Materials	22,975		27,478
Unallocated corporate expenses	(12,175)		(13,403)
Consolidated Adjusted EBITDA	$	91,556	$	95,273

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