Business Segment, Geographic and Major Customer Information

6 Months Ended

Jun. 30, 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. The operations of the Company are 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 ("CICT") 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 June 30,	Energy Chemical Technologies		Consumer and Industrial Chemical Technologies		Drilling Technologies		Production Technologies		Corporate and Other			Total
2014
Net revenue from external customers	$	62,589	$	12,607	$	27,241	$	2,881	$	—		$	105,318
Gross margin	27,432		2,893		10,762		1,223		—			42,310
Income (loss) from operations	19,162		972		4,200		421		(7,080		)	17,675
Depreciation and amortization	1,095		549		2,493		92		366			4,595
Total assets	140,028		97,935		139,095		15,922		15,241			408,221
Capital expenditures	1,418		17		2,025		50		747			4,257
2013
Net revenue from external customers	$	47,709	$	12,675	$	29,785	$	3,417	$	—		$	93,586
Gross margin	20,586		3,693		12,455		860		—			37,594
Income (loss) from operations	14,729		2,347		5,782		330		(9,657		)	13,531
Depreciation and amortization	809		252		2,415		60		354			3,890
Total assets	119,137		104,201		118,722		13,296		27,754			383,110
Capital expenditures	1,933		35		2,141		70		557			4,736

As of and for the six months ended June 30,	Energy Chemical Technologies		Consumer and Industrial Chemical Technologies		Drilling Technologies		Production Technologies		Corporate and Other			Total
2014
Net revenue from external customers	$	124,966	$	25,638	$	52,142	$	5,147	$	—		$	207,893
Gross margin	56,650		6,927		20,550		1,863		—			85,990
Income (loss) from operations	40,785		3,307		7,517		343		(15,479		)	36,473
Depreciation and amortization	2,162		982		4,930		163		577			8,814
Total assets	140,028		97,935		139,095		15,922		15,241			408,221
Capital expenditures	2,804		30		5,321		110		980			9,245
2013
Net revenue from external customers	$	92,359	$	12,675	$	58,699	$	8,096	$	—		$	171,829
Gross margin	39,699		3,693		23,801		3,031		—			70,224
Income (loss) from operations	29,053		2,347		11,201		1,943		(18,465		)	26,079
Depreciation and amortization	1,269		252		4,777		121		504			6,923
Total assets	119,137		104,201		118,722		13,296		27,754			383,110
Capital expenditures	2,958		35		3,002		1,067		2,057			9,119

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 June 30,				Six months ended June 30,
	2014		2013		2014		2013
U.S.	$	91,691	$	83,488	$	179,022	$	149,510
Other countries	13,627		10,098		28,871		22,319
Total	$	105,318	$	93,586	$	207,893	$	171,829

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 17.7% and 16.9% of consolidated revenue for the three months ended June 30, 2014 and 2013, respectively, and 19.2% and 17.2% for the six months ended June 30, 2014 and 2013, respectively. Over 94% of the revenue from this customer was in the Energy Chemical Technologies segment.