Business Segments

6 Months Ended

Jun. 30, 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, integration 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) income, net.

The following table presents information about the performance of the Company’s reportable segments for the three and six

months ended June 30, 2020 and 2019:

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Net sales

Americas

$

80,576

$

71,747

$

210,472

$

143,972

EMEA

77,702

49,012

182,541

101,437

Asia/Pacific

68,421

44,801

141,973

90,968

Global Specialty Businesses

59,341

40,309

129,615

80,702

Total net sales

$

286,040

$

205,869

$

664,601

$

417,079

Segment operating earnings

Americas

$

10,303

$

13,965

$

39,491

$

28,304

EMEA

10,245

8,938

28,604

17,731

Asia/Pacific

19,261

12,159

38,802

24,971

Global Specialty Businesses

16,393

10,970

36,953

21,574

Total segment operating earnings

56,202

46,032

143,850

92,580

Combination, integration and other acquisition-related expenses

(7,995)

(4,604)

(15,873)

(9,087)

Restructuring and related charges

(486)

—

(2,202)

—

Indefinite-lived intangible asset impairment

—

—

(38,000)

—

Non-operating and administrative expenses

(32,045)

(19,070)

(70,496)

(39,418)

Depreciation of corporate assets and amortization

(13,438)

(1,827)

(27,485)

(3,715)

Operating income (loss) 

2,238

20,531

(10,206)

40,360

Other (expense) income, net

(993)

43

(22,168)

(592)

Interest expense, net

(6,811)

(733)

(15,272)

(1,509)

(Loss) income before taxes and equity in net income of

associated companies

$

(5,566)

$

19,841

$

(47,646)

$

38,259

Inter-segment revenues for the three and six months ended June 30, 2020 were $

2.4

 million and $

5.3

 million for Americas, $

5.3

million and $

10.8

 million for EMEA, $

0.1

 million and $

0.3

 million for Asia/Pacific, and $

1.0

 million and $

2.3

 million for Global

Specialty Businesses, respectively. Inter-segment revenues for the three and six months ended June 30, 2019 were $

1.3

 million and

$

2.7

 million for Americas, $

4.8

 million and $

10.1

 million for EMEA, less than $

0.1

 million and $

0.1

 million for Asia/Pacific, and

$

1.3

 million and $

2.8

 million for Global Specialty Businesses, respectively. However, all inter-segment transactions have been

eliminated from each reportable segment’s net sales and earnings for all periods presented in the above tables.