Business Segment, Geographic and Major Customer Information

6 Months Ended

Jun. 30, 2016

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 Chemistry Technologies, Consumer and Industrial Chemistry Technologies, Drilling Technologies, and Production Technologies.

• Energy Chemistry Technologies designs, develops, manufactures, packages, and markets specialty chemistries 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 Chemistry 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 downhole drilling equipment used in energy, mining, and industrial drilling activities.

• Production Technologies assembles and markets production-related equipment, including the Petrovalve^® product line of rod pump components, hydraulic pumping units, 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 June 30,	Energy Chemistry Technologies		Consumer and Industrial Chemistry Technologies		Drilling Technologies			Production Technologies			Corporate and Other			Total
2016
Net revenue from external customers	$	43,385	$	20,694	$	6,372		$	1,868		$	—		$	72,319
Gross profit	17,660		4,058		2,217			(14		)	—			23,921
Income (loss) from operations	7,584		2,686		(1,618		)	(1,261		)	(10,114		)	(2,723		)
Depreciation and amortization	1,237		608		607			221			557			3,230
Total assets	151,117		108,935		67,815			23,612			13,865			365,344
Capital expenditures	3,685		204		245			50			559			4,743
2015
Net revenue from external customers	$	56,472	$	15,477	$	12,334		$	2,747		$	—		$	87,030
Gross profit	20,426		4,126		4,103			597			—			29,252
Income (loss) from operations	11,892		2,683		(21,300		)	(1,596		)	(10,287		)	(18,608		)
Depreciation and amortization	1,174		549		2,218			198			471			4,610
Total assets	149,767		98,251		114,481			25,544			15,350			403,393
Capital expenditures	2,075		6		620			138			527			3,366

As of and for the six months ended June 30,	Energy Chemistry Technologies		Consumer and Industrial Chemistry Technologies		Drilling Technologies			Production Technologies			Corporate and Other			Total
2016
Net revenue from external customers	$	88,064	$	39,827	$	12,828		$	3,889		$	—		$	144,608
Gross profit	36,429		9,082		3,242			96			—			48,849
Income (loss) from operations	15,597		6,075		(42,569		)	(6,691		)	(21,149		)	(48,737		)
Depreciation and amortization	2,480		1,118		2,428			440			1,053			7,519
Total assets	151,117		108,935		67,815			23,612			13,865			365,344
Capital expenditures	6,699		346		483			235			1,193			8,956
2015
Net revenue from external customers	$	103,115	$	28,940	$	31,028		$	6,321		$	—		$	169,404
Gross profit	36,526		7,833		10,094			1,326			—			55,779
Income (loss) from operations	18,713		5,064		(21,937		)	(2,135		)	(19,601		)	(19,896		)
Depreciation and amortization	2,378		1,102		4,537			323			841			9,181
Total assets	149,767		98,251		114,481			25,544			15,350			403,393
Capital expenditures	4,443		28		2,744			776			972			8,963

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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
U.S.	$	54,014	$	73,250	$	111,808	$	137,446
Other countries	18,305		13,780		32,800		31,958
Total	$	72,319	$	87,030	$	144,608	$	169,404

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

Major Customers

Revenue from major customers, as a percentage of consolidated revenue, is as follows:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Customer A	15.5	%	19.5	%	18.3	%	15.8	%
Customer B	11.8	%	12.1	%	11.3	%	11.2	%

Over 95% of the revenue from these customers was for sales in the Energy Chemistry Technologies segment.