Business Segment, Geographic and Major Customer Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Business Segment, Geographic and Major Customer Information

Business Segment, Geographic and Major Customer Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by chief operating decision-makers in deciding how to allocate resources and assess performance. With its acquisition of Florida Chemical Company, Inc. on May 10, 2013, the Company added operations in a new segment, Consumer and Industrial Chemical Technologies. The operations of the Company are now categorized into four reportable segments: Energy Chemical Technologies, Consumer and Industrial Chemical Technologies, Drilling Technologies and Production Technologies.

• Energy Chemical Technologies designs, develops, manufactures, packages and markets specialty chemicals, some of which hold patent protection, used in oil and gas well cementing, stimulation, acidizing, drilling and production. Activities in this segment also include construction and management of automated material handling facilities and management of loading facilities and blending operations for oilfield services companies.

• Consumer and Industrial Chemical Technologies designs, develops and manufactures products that are sold to companies in the flavor and fragrance industry and the specialty chemical industry. These technologies are used by beverage and food companies, fragrance companies, and companies providing household and industrial cleaning products.

• Drilling Technologies rents, sells, inspects, manufactures and markets down-hole drilling equipment used in energy, mining, water well and industrial drilling activities.

• Production Technologies assembles and markets production-related equipment, including the Petrovalve™ product line of rod pump components, electric submersible pumps, gas separators, valves and services that support natural gas, oil and coal bed methane production activities.

The Company evaluates performance based upon a variety of criteria. The primary financial measure is segment operating income. Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes, are not allocated to reportable segments.

Summarized financial information of the reportable segments is as follows (in thousands):

As of and for the three months ended March 31,	Energy Chemical Technologies		Consumer and Industrial Chemical Technologies		Drilling Technologies		Production Technologies			Corporate and Other			Total
2014
Net revenue from external customers	$	62,377	$	13,030	$	24,901	$	2,267		$	—		$	102,575
Gross margin	29,220		4,033		9,788		640			—			43,681
Income (loss) from operations	21,623		2,335		3,317		(79		)	(8,398		)	18,798
Depreciation and amortization	1,067		433		2,437		70			212			4,219
Total assets	137,638		93,217		136,141		14,864			8,656			390,516
Capital expenditures	1,386		14		3,296		61			233			4,990
2013
Net revenue from external customers	$	44,650	$	—	$	28,914	$	4,679		$	—		$	78,243
Gross margin	19,113		—		11,346		2,171			—			32,630
Income (loss) from operations	14,324		—		5,419		1,613			(8,808		)	12,548
Depreciation and amortization	460		—		2,362		61			150			3,033
Total assets	59,301		—		120,015		12,280			26,887			218,483
Capital expenditures	1,025		—		861		997			1,500			4,383

Geographic Information

Revenue by country is based on the location where services are provided and products are sold. No individual country other than the United States (“U.S.”) accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):

	Three months ended March 31,
	2014		2013
U.S.	$	87,331	$	66,023
Other countries	15,244		12,220
Total	$	102,575	$	78,243

Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements.

Major Customers

One customer accounted for 15.4% and 17.5% of consolidated revenue for the three months ended March 31, 2014 and 2013, respectively. Over 98% of the revenue from this customer was in the Energy Chemical Technologies segment.