Business Segment, Geographic and Major Customer Information

9 Months Ended

Sep. 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, and stimulation. 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 September 30,	Energy Chemistry Technologies		Consumer and Industrial Chemistry Technologies		Drilling Technologies			Production Technologies			Corporate and Other			Total
2016
Net revenue from external customers	$	45,030	$	19,306	$	7,198		$	2,145		$	—		$	73,679
Gross profit	18,180		4,174		2,908			104			—			25,366
Income (loss) from operations	6,196		2,433		(924		)	(1,118		)	(10,882		)	(4,295		)
Depreciation and amortization	1,582		567		599			220			581			3,549
Total assets	172,456		101,921		67,655			23,235			17,273			382,540
Capital expenditures	2,005		148		234			51			227			2,665
2015
Net revenue from external customers	$	60,181	$	13,867	$	10,812		$	3,082		$	—		$	87,942
Gross profit	24,257		3,082		3,302			586			—			31,227
Income (loss) from operations	14,283		1,728		(2,614		)	(823		)	(9,797		)	2,777
Depreciation and amortization	1,200		548		2,038			212			435			4,433
Total assets	152,430		90,948		110,872			26,564			20,131			400,945
Capital expenditures	1,467		18		—			107			523			2,115

As of and for the nine months ended September 30,	Energy Chemistry Technologies		Consumer and Industrial Chemistry Technologies		Drilling Technologies			Production Technologies			Corporate and Other			Total
2016
Net revenue from external customers	$	133,094	$	59,133	$	20,026		$	6,034		$	—		$	218,287
Gross profit	54,609		13,256		6,150			201			—			74,216
Income (loss) from operations	21,793		8,508		(43,493		)	(7,810		)	(32,031		)	(53,033		)
Depreciation and amortization	4,063		1,685		3,027			660			1,634			11,069
Total assets	172,456		101,921		67,655			23,235			17,273			382,540
Capital expenditures	8,704		494		717			286			1,420			11,621
2015
Net revenue from external customers	$	163,296	$	42,808	$	41,840		$	9,402		$	—		$	257,346
Gross profit	60,784		10,914		13,396			1,912			—			87,006
Income (loss) from operations	32,995		6,792		(24,551		)	(2,958		)	(29,398		)	(17,120		)
Depreciation and amortization	3,578		1,649		6,575			535			1,276			13,613
Total assets	152,430		90,948		110,872			26,564			20,131			400,945
Capital expenditures	5,910		46		2,744			883			1,495			11,078

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,
	2016		2015		2016		2015
U.S.	$	58,183	$	73,796	$	169,991	$	211,242
Other countries	15,496		14,146		48,296		46,104
Total	$	73,679	$	87,942	$	218,287	$	257,346

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 September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Customer A	12.9	%	12.8	%	11.9	%	11.7	%
Customer B	10.9	%	11.3	%	15.8	%	14.3	%
Customer C	*		11.6	%	*		*

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