Business Segment, Geographic and Major Customer Information

9 Months Ended

Sep. 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 used in oil and natural gas well drilling, cementing, completion, stimulation and production. In addition, the Company's chemistries are used in specialized enhanced and improved oil recovery markets. 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 industries 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 and oil 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 September 30,	Energy Chemical Technologies		Consumer and Industrial Chemical Technologies		Drilling Technologies		Production Technologies		Corporate and Other			Total
2014
Net revenue from external customers	$	68,181	$	13,713	$	29,920	$	4,947	$	—		$	116,761
Gross margin	28,424		3,310		11,928		2,416		—			46,078
Income (loss) from operations	19,903		1,758		5,557		1,583		(7,954		)	20,847
Depreciation and amortization	1,103		547		2,433		81		298			4,462
Total assets	144,738		89,574		142,774		18,252		17,080			412,418
Capital expenditures	2,580		7		818		141		703			4,249
2013
Net revenue from external customers	$	51,670	$	15,292	$	27,569	$	3,857	$	—		$	98,388
Gross margin	21,849		3,588		10,821		1,244		—			37,502
Income (loss) from operations	16,247		2,301		4,309		769		(8,539		)	15,087
Depreciation and amortization	932		382		2,438		60		213			4,025
Total assets	121,876		97,129		136,832		16,542		8,600			380,979
Capital expenditures	161		165		1,596		225		328			2,475

As of and for the nine months ended September 30,	Energy Chemical Technologies		Consumer and Industrial Chemical Technologies		Drilling Technologies		Production Technologies		Corporate and Other			Total
2014
Net revenue from external customers	$	193,148	$	39,351	$	82,061	$	10,093	$	—		$	324,653
Gross margin	85,074		10,237		32,477		4,280		—			132,068
Income (loss) from operations	60,690		5,064		13,073		1,925		(23,432		)	57,320
Depreciation and amortization	3,264		1,529		7,363		244		876			13,276
Total assets	144,738		89,574		142,774		18,252		17,080			412,418
Capital expenditures	5,383		37		6,139		252		1,683			13,494
2013
Net revenue from external customers	$	144,029	$	27,967	$	86,268	$	11,953	$	—		$	270,217
Gross margin	61,548		7,281		34,622		4,275		—			107,726
Income (loss) from operations	45,300		4,648		15,510		2,712		(27,004		)	41,166
Depreciation and amortization	2,201		634		7,215		181		717			10,948
Total assets	121,876		97,129		136,832		16,542		8,600			380,979
Capital expenditures	3,077		165		4,066		1,669		1,008			9,985

Geographic Information

Revenue by country is based on the location where services are provided and products are used. 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 September 30,				Nine months ended September 30,
	2014		2013		2014		2013
U.S.	$	92,643	$	84,640	$	271,663	$	234,151
Other countries	24,118		13,748		52,990		36,066
Total	$	116,761	$	98,388	$	324,653	$	270,217

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 12.7% and 15.5% of consolidated revenue for the three months ended September 30, 2014 and 2013, respectively, and 17.0% and 16.6% of consolidated revenue for the nine months ended September 30, 2014 and 2013, respectively. Over 93% of the revenue from this customer was for sales in the Energy Chemical Technologies segment.