Business Segments

3 Months Ended

Mar. 31, 2020

Segment Reporting Measurement Disclosures [Abstract]

Segment Reporting Disclosure [Text Block]

Note 4 – Business Segments

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the Company and the chief operating decision maker assess its performance. During the third quarter of 2019 and in connection with the Combination, the Company reorganized its executive management team to align with its new business structure, which reflects the method by which the chief operating decision maker of the Company assesses its performance and allocates its resources. The Company’s current reportable segment structure includes four segments: (i) Americas; (ii) EMEA; (iii) Asia/Pacific; and (iv) Global Specialty Businesses. The three geographic segments are composed of the net sales and operations in each respective region, excluding net sales and operations managed globally by the Global Specialty Businesses segment, which includes the Company’s container, metal finishing, mining, offshore, specialty coatings, specialty grease and Norman Hay businesses. All prior period information for Legacy Quaker has been recast to reflect these four segments as the Company’s new reportable segments. Prior to the Company’s re-segmentation during the third quarter of 2019, the Company’s historical reportable segments were four geographic regions: (i) North America; (ii) EMEA; (iii) Asia/Pacific; and (iv) South America.

Though the Company changed its reportable segments in the third quarter of 2019, the calculation of the reportable segments’ measures of earnings remains otherwise generally consistent with past practices. Segment operating earnings for the Company’s reportable segments are comprised of net sales less cost of goods sold (“COGS”) and selling, general and administrative expenses (“SG&A”) directly related to the respective segment’s product sales. Operating expenses not directly attributable to the net sales of each respective segment are not included in segment operating earnings, such as certain corporate and administrative costs, Combination and other acquisition-related expenses, and restructuring and related charges. Other items not specifically identified with the Company’s reportable segments include interest expense, net and other expense, net.

The following table presents information about the performance of the Company’s reportable operating segments for the three months ended March 31, 2020 and 2019:

		Three Months Ended
		March 31,
		2020		2019
Net sales
	Americas	$	129,896	$	72,225
	EMEA		104,839		52,425
	Asia/Pacific		73,552		46,167
	Global Specialty Businesses		70,274		40,393
Total net sales		$	378,561	$	211,210
Segment operating earnings
	Americas	$	29,188	$	14,339
	EMEA		18,359		8,793
	Asia/Pacific		19,541		12,812
	Global Specialty Businesses		20,560		10,604
Total segment operating earnings			87,648		46,548
Combination and other acquisition-related expenses			(7,878)		(4,483)
Restructuring and related charges			(1,716)		—
Indefinite-lived intangible asset impairment			(38,000)		—
Non-operating and administrative expenses			(38,451)		(20,348)
Depreciation of corporate assets and amortization			(14,047)		(1,888)
Operating (loss) income			(12,444)		19,829
Other expense, net			(21,175)		(635)
Interest expense, net			(8,461)		(776)
(Loss) income before taxes and equity in net income of associated companies		$	(42,080)	$	18,418

Inter-segment revenues for the three months ended March 31, 2020 and 2019 were $2.9 million and $1.4 million for Americas, $5.5 million and $5.3 million for EMEA, $0.1 million and less than $0.1 million for Asia/Pacific and $1.3 million and $1.5 million for Global Specialty Businesses, respectively. However, all inter-segment transactions have been eliminated from each reportable operating segment’s net sales and earnings for all periods presented in the above tables.