Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

7. Segment Information

The Company and its subsidiaries operate in the business of pigment manufacturing and related products in three geographic segments. All United States manufacturing is done at the facility located in Corpus Christi, Texas. Foreign manufacturing is done by the Company’s wholly-owned foreign operations, TMM, located in Malaysia and TPT, located in The Netherlands.

Product sales of inventory between the U.S., Asian and European operations are based on inter-company pricing, which includes an inter-company profit margin. In the geographic information, the location profit (loss) from all locations is reflective of these inter-company prices, as is inventory at the Corpus Christi location prior to elimination adjustments. Such presentation is consistent with the internal reporting reviewed by the Company’s chief operating decision maker. The elimination entries include an adjustment to the cost of sales resulting from the adjustment to ending inventory to eliminate inter-company profit, and the reversal of a similar adjustment from a prior period. To the extent there are net increases/declines period over period in Corpus Christi inventories that include an inter-company component, the net effect of these adjustments can decrease/increase location profit.

For the year ended December 31, 2014, the U.S. operations received approximately 34% of its total third party sales revenue from a single customer. The European operations received approximately 33% of its total third party sales revenue from two customers (17% and 16%), and the Asian operations received approximately 25% of its total third party sales revenue from a single customer.

For the year ended December 31, 2013, the U.S. operations received approximately 30% of its total third party sales revenue from a single customer. The European operations received approximately 31% of its total third party sales revenue from two customers (18% and 13%), and the Asian operations received approximately 42% of its total third party sales revenue from a single customer.

Sales from the subsidiary to the parent company are based upon profit margins which represent competitive pricing of similar products. Intercompany sales consisted of ALUPREM, SR, HITOX and TIOPREM.

The Company’s principal products, ALUPREM and HITOX, accounted for approximately 39% and 28%, respectively, of net consolidated sales in 2014 and approximately 32% and 30%, respectively in 2013

The Company sells its products to customers located in more than 60 countries. Sales to external customers are attributed to geographic area based on country of distribution. Sales to customers located in the U.S. represented approximately 58% and 56% for the years ended December 31, 2014 and 2013, respectively.

For the year ended December 31, 2014 and 2013, sales to customers in Germany represented approximately 25% and 20%, respectively, of our total foreign sales.

Approximately 20% of the Company’s employees are represented by an in-house collective bargaining agreement during 2014 as compared to approximately 24% in 2013.

TOR Minerals International, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2014 and 2013

A summary of the Company’s manufacturing operations by geographic segment is presented below:

(In thousands)	United States (Corpus Christi)			Netherlands (TPT)		Malaysia (TMM)			Inter-Company Eliminations			Consolidated
As of and for the years ended:
December 31, 2014
Net Sales:
Customer sales	$	31,777		$	10,154	$	4,799		$	-		$	46,730
Intercompany sales		111			7,977		7,445			(15,533	)		-
Total Net Sales	$	31,888		$	18,131	$	12,244		$	(15,533	)	$	46,730
Share based compensation	$	128		$	-	$	-		$	-		$	128
Depreciation	$	980		$	1,310	$	1,155		$	-		$	3,445
Interest expense	$	34		$	55	$	265		$	-		$	354
Income tax (benefit) expense	$	120		$	468	$	(737	)	$	(38	)	$	(187	)
Location profit (loss)	$	(41	)	$	1,620	$	(2,188	)	$	55		$	(554	)
Capital expenditures	$	804		$	1,199	$	61		$	-		$	2,064
Location long-lived assets	$	5,627		$	7,894	$	5,368		$	-		$	18,889
Location assets	$	18,983		$	10,393	$	18,169		$	-		$	47,545
December 31, 2013
Net Sales:
Customer sales	$	30,019		$	8,255	$	7,747		$	-		$	46,021
Intercompany sales		110			6,627		7,638			(14,375	)		-
Total Net Sales	$	30,129		$	14,882	$	15,385		$	(14,375	)	$	46,021
Share based compensation	$	109		$	-	$	-		$	-		$	109
Depreciation	$	936		$	1,197	$	1,024		$	-		$	3,157
Interest expense	$	77		$	97	$	215		$	-		$	389
Income tax (benefit) expense	$	(511	)	$	265	$	(587	)	$	9		$	(824	)
Location profit (loss)	$	(1,132	)	$	826	$	(1,347	)	$	37		$	(1,616	)
Capital expenditures	$	703		$	1,192	$	2,335		$	-		$	4,230
Location long-lived assets	$	5,805		$	8,965	$	9,029		$	-		$	23,799
Location assets	$	17,956		$	10,995	$	23,666		$	-		$	52,617