Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

Note 6. Segment Information

The Company and its subsidiaries operate in the business of pigment manufacturing and related products in three geographic segments – United States, European and Asian.

Product sales of inventory between the U.S., European and Asian operations are based on inter-company pricing, which includes an inter-company profit margin. The segment profit (loss) included in the table below, from each location 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.

Sales from the subsidiary to the parent company are based upon profit margins which represent competitive pricing of similar products. Intercompany sales consist primarily of ALUPREM®, Synthetic Rutile, HITOX® and TIOPREM®.

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

(In Thousands)		United States (Corpus Christi)		Europe (TPT)		Asia (TMM)		Inter-Company Eliminations		Consolidated
As of and for the three months ended:
March 31, 2016
Net Sales:
Customer sales	$	6,491	$	2,435	$	646	$	-	$	9,572
Intercompany sales		53		1,360		1,572		(2,985)		-
Total Net Sales	$	6,544	$	3,795	$	2,218	$	(2,985)	$	9,572
Segment income (loss)	$	(33)	$	320	$	41	$	(84)	$	244
Segments assets	$	15,967	$	14,513	$	7,295	$	-	$	37,775
March 31, 2015
Net Sales:
Customer sales	$	7,070	$	2,307	$	738	$	-	$	10,115
Intercompany sales		-		952		2,096		(3,048)		-
Total Net Sales	$	7,070	$	3,259	$	2,834	$	(3,048)	$	10,115
Segment income (loss)	$	(18)	$	(93)	$	(99)	$	20	$	(190)
Segment assets	$	18,192	$	10,212	$	15,709	$	-	$	44,113

Our chief operating decision maker, or CODM, regularly reviews financial information about our segments in order to allocate resources and evaluate performance. Our CODM assesses segment performance based on Segment sales and Segment Adjusted EBITDA.

Following is a summary of adjusted EBITDA by segment and consolidated for the three month periods ended March 31, 2016 and 2015.

(In thousands)		United States (Corpus Christi)		European (TPT)		Asian (TMM)		Inter-Company Eliminations		Consolidated
As of and for the three months ended:
March 31, 2016
Net Income (Loss)	$	(33)	$	320	$	41	$	(84)	$	244
Adjustments:
Depreciation and amortization		265		333		35				633
Stock-based compensation		49		-		-		-		49
Interest expense, net		-		29		21				50
Bad debt expense		(21)		(252)		-				(273)
Income tax (benefit) expense		(76)		78		-		73		75
Adjusted EBITDA	$	184	$	508	$	97	$	(11)	$	778
March 31, 2015
Net Income (Loss)	$	(18)	$	(93)	$	(99)	$	20	$	(190)
Adjustments:
Depreciation and amortization		243		284		174				701
Stock-based compensation		29		-		-		-		29
Interest expense		5		11		64				80
Income tax (benefit) expense		(57)		(29)		-		5		(81)
Adjusted EBITDA	$	202	$	173	$	139	$	25	$	539