Net Sales and Revenue Recognition

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenue From Contract With Customer [TextBlock]

Note 5 – Net Sales and Revenue Recognition

Business Description

The Company develops, produces, and markets a broad range of formulated chemical specialty products and offers chemical

management services (“Fluidcare”) for various heavy industrial and manufacturing applications throughout its four segments. A

significant portion of the Company’s revenues are realized from the sale of process fluids and services made directly to manufacturers

through its own employees and its Fluidcare programs, with the balance being handled through distributors and agents.

As part of the Company’s Fluidcare business, certain third-party product sales to customers are managed by the Company. Where

the Company acts as a principal, revenues are recognized on a gross reporting basis at the selling price negotiated with its customers.

Where the Company acts as an agent, revenue is recognized on a net reporting basis at the amount of the administrative fee earned by

the Company for ordering the goods.

 The Company transferred third-party products under arrangements recognized on a net reporting

basis of $

18.9

 million and $

53.4

 million for the three and nine months ended September 30, 2021, respectively, and $

11.1

 million and

$

29.9

 million for the three and nine months ended September 30, 2020, respectively.

As previously disclosed in the Company’s 2020 Form 10-K, during 2020, the Company’s five largest customers (each composed

of multiple subsidiaries or divisions with semiautonomous purchasing authority) accounted for approximately

10

% of consolidated net

sales, with its largest customer accounting for approximately

3

% of consolidated net sales.

Revenue Recognition Model

The Company applies the five-step model in the FASB’s guidance, which requires the Company to: (i) identify the contract with a

customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction

price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance

obligation. Refer to the Company’s 2020 Form 10-K for additional information on the Company’s revenue recognition policies,

including its practical expedients and accounting policy elections.

Allowance for Doubtful Accounts

As previously disclosed in the Company’s 2020 Form 10-K, during 2020, the Company adopted, as required, an accounting

standard update related to the accounting and disclosure of credit losses effective January 1, 2020. 

The Company recognizes an

allowance for credit losses, which represents the portion of its trade accounts receivable that the Company does not expect to collect

over the contractual life, considering past events and reasonable and supportable forecasts of future economic conditions. The

Company’s allowance for credit losses on its trade accounts receivables is based on specific collectability facts and circumstances for

each outstanding receivable and customer, the aging of outstanding receivables, and the associated collection risk the Company

estimates for certain past due aging categories, and also, the general risk to all outstanding accounts receivable based on historical

amounts determined to be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its customers.

Contract Assets and Liabilities

The Company recognizes a contract asset or receivable on its Condensed Consolidated Balance Sheet when the Company

performs a service or transfers a good in advance of receiving consideration. A receivable is the Company’s right to consideration that

is unconditional and only the passage of time is required before payment of that consideration is due. A contract asset is the

Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer.

 The Company

had no material contract assets recorded on its Condensed Consolidated Balance Sheets as of September 30, 2021 or December 31,

2020.

A contract liability is recognized when the Company receives consideration, or if it has the unconditional right to receive

consideration, in advance of performance. A contract liability is the Company’s obligation to transfer goods or services to a customer

for which the Company has received consideration, or a specified amount of consideration is due, from the customer. The Company’s

contract liabilities primarily represent deferred revenue recorded for customer payments received by the Company prior to the

Company satisfying the associated performance obligation. Deferred revenues are presented within other current liabilities in the

Company’s Condensed Consolidated Balance Sheets.

 The Company had approximately $

4.4

 million and $

4.0

 million of deferred

revenue as of September 30, 2021 and December 31, 2020, respectively. For the nine months ended September 30, 2021, the

Company satisfied all of the associated performance obligations and recognized into revenue the advance payments received and

recorded as of December 31, 2020.

Disaggregated Revenue

The following tables disaggregate the Company’s net sales by segment, geographic region, customer industry, and timing of

revenue recognized for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, 2021

Consolidated

Americas

EMEA

Asia/Pacific

Total

Customer Industries

Metals

$

56,954

$

38,483

$

53,994

$

149,431

Metalworking and other

93,845

83,758

44,665

222,268

150,799

122,241

98,659

371,699

Global Specialty Businesses

46,008

19,253

12,112

77,373

$

196,807

$

141,494

$

110,771

$

449,072

Timing of Revenue Recognized

Product sales at a point in time

$

188,340

$

131,982

$

108,559

$

428,881

Services transferred over time

8,467

9,512

2,212

20,191

$

196,807

$

141,494

$

110,771

$

449,072

Three Months Ended September 30, 2020

Consolidated

Americas

EMEA

Asia/Pacific

Total

Customer Industries

Metals

$

42,098

$

25,362

$

45,001

$

112,461

Metalworking and other

77,442

68,643

39,876

185,961

119,540

94,005

84,877

298,422

Global Specialty Businesses

39,197

17,429

12,176

68,802

$

158,737

$

111,434

$

97,053

$

367,224

Timing of Revenue Recognized

Product sales at a point in time

$

153,820

$

107,093

$

94,660

$

355,573

Services transferred over time

4,917

4,341

2,393

11,651

$

158,737

$

111,434

$

97,053

$

367,224

Nine Months Ended September 30, 2021

Consolidated

Americas

EMEA

Asia/Pacific

Total

Customer Industries

Metals

$

155,546

$

108,391

$

151,944

$

415,881

Metalworking and other

269,797

257,100

134,980

661,877

425,343

365,491

286,924

1,077,758

Global Specialty Businesses

137,447

61,203

37,709

236,359

$

562,790

$

426,694

$

324,633

$

1,314,117

Timing of Revenue Recognized

Product sales at a point in time

$

537,161

$

400,982

$

316,222

$

1,254,365

Services transferred over time

25,629

25,712

8,411

59,752

$

562,790

$

426,694

$

324,633

$

1,314,117

Nine Months Ended September 30, 2020

Consolidated

Americas

EMEA

Asia/Pacific

Total

Customer Industries

Metals

$

121,458

$

80,174

$

122,006

$

323,638

Metalworking and other

208,554

196,372

104,844

509,770

330,012

276,546

226,850

833,408

Global Specialty Businesses

115,722

49,603

33,092

198,417

$

445,734

$

326,149

$

259,942

$

1,031,825

Timing of Revenue Recognized

Product sales at a point in time

$

431,266

$

313,511

$

254,011

$

998,788

Services transferred over time

14,468

12,638

5,931

33,037

$

445,734

$

326,149

$

259,942

$

1,031,825