Business Segment Information |
18. |
Business Segment Information |
The Company’s operations are organized and reviewed by management along its product lines and presented in three reportable segments.
Environmental Segment
Our Environmental segment, formerly known as the Air Pollution Control segment, provides the design and manufacture of product recovery and air pollution control technologies that enable our customers to meet compliance targets for toxic emissions, fumes, volatile organic compounds, process and industrial odors. These products and solutions include chemical and biological scrubbers, fabric filters and cartridge collectors, thermal and catalytic oxidation systems, cyclones, separators, gas absorbers and industrial ventilation systems. This segment also provides component parts for industrial air systems and provides cost effective alternatives to traditional duct components, as well as custom metal engineered fabrication services. These products and services are applicable to a wide variety of industries. During 2015, the Company concluded that changing the name of this segment was appropriate to more accurately describe the long-term goals of the Company in conjunction with the products and services offered within the segment.
Energy Segment
Our Energy segment provides customized solutions for the power and petrochemical industry. This includes gas turbine exhaust systems, dampers and diverters, gas and liquid separation and filtration equipment, selective catalytic reduction (“SCR”) and selective non-catalytic reduction (“SNCR”) systems, acoustical components and silencers, secondary separators (nuclear plant reactor vessels) and expansion joints, the design and manufacture of technologies for flue gas and diverter dampers, non-metallic expansion joints, natural gas turbine exhaust systems, and silencer and precipitator applications, primarily for coal-fired and natural gas power plants, refining, oil production and petrochemical processing, as well as a variety of other industries.
Fluid Handling and Filtration Segment
Our Fluid Handling and Filtration (“FHF”) segment provides the design and manufacture of high quality pump, filtration and fume exhaust solutions. This includes centrifugal pumps for corrosive, abrasive and high temperature liquids, filter products for air and liquid filtration, precious metal recovery systems, carbonate precipitators, and technologically advanced air movement and exhaust systems. These products are applicable to a wide variety of industries, particularly the aquarium/aquaculture, plating and metal finishing, food and beverage, chemical/petrochemical, wastewater treatment, desalination and pharmaceutical markets.
The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. Interest income and expense are not included in the measure of segment profit reviewed by management. Income taxes are also not included in the measure of segment operating profit reviewed by management. The operating results of the segments are reviewed through to the “Income from operations” line on the Condensed Consolidated Statements of Income.
The financial segment information is presented in the following tables:
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
(dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Net Sales (less intra-, inter-segment sales) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
44,211 |
|
|
$ |
41,798 |
|
|
$ |
83,333 |
|
|
$ |
83,514 |
|
Energy Segment |
|
|
52,867 |
|
|
|
27,303 |
|
|
|
100,799 |
|
|
|
51,652 |
|
Fluid Handling and Filtration Segment |
|
|
15,413 |
|
|
|
17,745 |
|
|
|
32,008 |
|
|
|
32,939 |
|
Corporate and Other(1) |
|
|
(233 |
) |
|
|
115 |
|
|
|
(707 |
) |
|
|
(159 |
) |
Net sales |
|
$ |
112,258 |
|
|
$ |
86,961 |
|
|
$ |
215,433 |
|
|
$ |
167,946 |
|
(1) |
Includes adjustment for revenue on intercompany jobs. |
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
(dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Income from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
6,119 |
|
|
$ |
5,140 |
|
|
$ |
10,865 |
|
|
$ |
9,158 |
|
Energy Segment |
|
|
6,367 |
|
|
|
215 |
|
|
|
11,563 |
|
|
|
635 |
|
Fluid Handling and Filtration Segment |
|
|
3,200 |
|
|
|
4,431 |
|
|
|
6,398 |
|
|
|
7,387 |
|
Corporate and Other(2) |
|
|
(6,618 |
) |
|
|
(5,074 |
) |
|
|
(13,537 |
) |
|
|
(8,891 |
) |
Eliminations |
|
|
(507 |
) |
|
|
(224 |
) |
|
|
(921 |
) |
|
|
(822 |
) |
Income from operations |
|
$ |
8,561 |
|
|
$ |
4,488 |
|
|
$ |
14,368 |
|
|
$ |
7,467 |
|
(2) |
Includes corporate compensation, professional services, information technology, acquisition and integration expenses, and other general and administrative corporate expenses. |
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
(dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Property and Equipment Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
115 |
|
|
$ |
17 |
|
|
$ |
228 |
|
|
$ |
81 |
|
Energy Segment |
|
|
220 |
|
|
|
139 |
|
|
|
304 |
|
|
|
179 |
|
Fluid Handling and Filtration Segment(3) |
|
|
3,301 |
|
|
|
63 |
|
|
|
3,310 |
|
|
|
68 |
|
Corporate and Other |
|
|
2 |
|
|
|
3 |
|
|
|
6 |
|
|
|
13 |
|
Property and equipment additions |
|
$ |
3,638 |
|
|
$ |
222 |
|
|
$ |
3,848 |
|
|
$ |
341 |
|
(3) |
Includes noncash additions of $3,296 for property, plant, and equipment acquired under capital leases during the second quarter of 2016. See Note 15 for further detail. |
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
(dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
907 |
|
|
$ |
1,104 |
|
|
$ |
1,874 |
|
|
$ |
2,257 |
|
Energy Segment |
|
|
2,939 |
|
|
|
760 |
|
|
|
5,741 |
|
|
|
1,431 |
|
Fluid Handling and Filtration Segment |
|
|
1,254 |
|
|
|
1,590 |
|
|
|
2,648 |
|
|
|
3,186 |
|
Corporate and Other |
|
|
32 |
|
|
|
37 |
|
|
|
65 |
|
|
|
69 |
|
Depreciation and Amortization |
|
$ |
5,132 |
|
|
$ |
3,491 |
|
|
$ |
10,328 |
|
|
$ |
6,943 |
|
(dollars in thousands) |
|
June 30,
2016 |
|
|
December 31,
2015 |
|
Identifiable Assets |
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
131,047 |
|
|
$ |
135,171 |
|
Energy Segment |
|
|
270,196 |
|
|
|
283,002 |
|
Fluid Handling and Filtration Segment |
|
|
161,378 |
|
|
|
161,394 |
|
Corporate and Other(4) |
|
|
29,081 |
|
|
|
19,252 |
|
Identifiable Assets |
|
$ |
591,702 |
|
|
$ |
598,819 |
|
(4) |
Corporate assets primarily consist of cash and income tax related assets. |
(dollars in thousands) |
|
June 30,
2016 |
|
|
December 31,
2015 |
|
Goodwill |
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
55,031 |
|
|
$ |
55,031 |
|
Energy Segment |
|
|
72,587 |
|
|
|
72,075 |
|
Fluid Handling and Filtration Segment |
|
|
93,057 |
|
|
|
93,057 |
|
Goodwill |
|
$ |
220,675 |
|
|
$ |
220,163 |
|
Intra-segment and Inter-segment Revenues
The Company has multiple divisions that sell to each other within segments (intra-segment sales) and between segments (inter-segment sales) as indicated in the following tables:
|
|
Three Months Ended June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Less Inter-Segment Sales |
|
|
|
|
|
(dollars in thousands) |
|
Total
Sales |
|
|
Intra-
Segment
Sales |
|
|
Environmental |
|
|
Energy |
|
|
FHF |
|
|
Corp
and
Other |
|
|
Net Sales to
Outside
Customers |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
45,522 |
|
|
$ |
(844 |
) |
|
$ |
— |
|
|
$ |
(427 |
) |
|
$ |
(40 |
) |
|
$ |
— |
|
|
$ |
44,211 |
|
Energy Segment |
|
|
53,740 |
|
|
|
(654 |
) |
|
|
(219 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52,867 |
|
Fluid Handling and Filtration Segment |
|
|
16,045 |
|
|
|
(452 |
) |
|
|
(180 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,413 |
|
Corporate and Other(5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(233 |
) |
|
|
(233 |
) |
Net Sales |
|
$ |
115,307 |
|
|
$ |
(1,950 |
) |
|
$ |
(399 |
) |
|
$ |
(427 |
) |
|
$ |
(40 |
) |
|
$ |
(233 |
) |
|
$ |
112,258 |
|
|
|
Three Months Ended June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Less Inter-Segment Sales |
|
|
|
|
|
(dollars in thousands) |
|
Total
Sales |
|
|
Intra-
Segment
Sales |
|
|
Environmental |
|
|
Energy |
|
|
FHF |
|
|
Corp
and
Other |
|
|
Net Sales to
Outside
Customers |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
43,833 |
|
|
$ |
(1,476 |
) |
|
$ |
— |
|
|
$ |
(559 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
41,798 |
|
Energy Segment |
|
|
29,445 |
|
|
|
(1,560 |
) |
|
|
(582 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27,303 |
|
Fluid Handling and Filtration Segment |
|
|
18,459 |
|
|
|
(699 |
) |
|
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,745 |
|
Corporate and Other(5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
115 |
|
|
|
115 |
|
Net Sales |
|
$ |
91,737 |
|
|
$ |
(3,735 |
) |
|
$ |
(597 |
) |
|
$ |
(559 |
) |
|
$ |
— |
|
|
$ |
115 |
|
|
$ |
86,961 |
|
|
|
Six Months Ended June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Less Inter-Segment Sales |
|
|
|
|
|
(dollars in thousands) |
|
Total
Sales |
|
|
Intra-
Segment
Sales |
|
|
Environmental |
|
|
Energy |
|
|
FHF |
|
|
Corp
and
Other |
|
|
Net Sales to
Outside
Customers |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
87,575 |
|
|
$ |
(2,598 |
) |
|
$ |
— |
|
|
$ |
(1,467 |
) |
|
$ |
(177 |
) |
|
$ |
— |
|
|
$ |
83,333 |
|
Energy Segment |
|
|
102,321 |
|
|
|
(1,145 |
) |
|
|
(377 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
100,799 |
|
Fluid Handling and Filtration Segment |
|
|
33,057 |
|
|
|
(855 |
) |
|
|
(194 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32,008 |
|
Corporate and Other(5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(707 |
) |
|
|
(707 |
) |
Net Sales |
|
$ |
222,953 |
|
|
$ |
(4,598 |
) |
|
$ |
(571 |
) |
|
$ |
(1,467 |
) |
|
$ |
(177 |
) |
|
$ |
(707 |
) |
|
$ |
215,433 |
|
|
|
Six Months Ended June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Less Inter-Segment Sales |
|
|
|
|
|
(dollars in thousands) |
|
Total
Sales |
|
|
Intra-
Segment
Sales |
|
|
Environmental |
|
|
Energy |
|
|
FHF |
|
|
Corp
and
Other |
|
|
Net Sales to
Outside
Customers |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental Segment |
|
$ |
87,390 |
|
|
$ |
(3,283 |
) |
|
$ |
— |
|
|
$ |
(593 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
83,514 |
|
Energy Segment |
|
|
54,526 |
|
|
|
(2,255 |
) |
|
|
(619 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
51,652 |
|
Fluid Handling and Filtration Segment |
|
|
34,193 |
|
|
|
(1,151 |
) |
|
|
(103 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
32,939 |
|
Corporate and Other(5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(159 |
) |
|
|
(159 |
) |
Net Sales |
|
$ |
176,109 |
|
|
$ |
(6,689 |
) |
|
$ |
(722 |
) |
|
$ |
(593 |
) |
|
$ |
- |
|
|
$ |
(159 |
) |
|
$ |
167,946 |
|
(5) |
Includes adjustment for revenue on intercompany jobs. |
|