Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

Note 15 — 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 to determine allocation of resources and assessment of performance. The Company's business is comprised of three reportable segments: Chemicals and Logistics ("Chemicals"), Drilling Products ("Drilling") and Artificial Lift. The Company's strategic focus includes oilfield specialty chemicals and logistics, down-hole drilling tools and down-hole production related tools used in oil, gas and mining industries. The Chemicals and Drilling segments focus on serving

the drilling-related needs of oil and gas companies, while the Chemicals and Artificial Lift segments focus on serving the production related needs of oil and gas companies. The Company believes product offerings and current geographic presence within each segment's market provides appropriately diverse sources of cash flow. While each segment has unique technological expertise, all segments share a commitment to provide customers with quality services and products at competitive prices.

• Chemicals is comprised of two business divisions: Specialty Chemicals and Logistics. Specialty Chemicals designs, develops, manufactures, packages and markets specialty chemicals used in oil and gas well cementing, stimulation, acidizing, drilling and production. Logistics manages automated material handling, loading facilities and blending capabilities for oilfield services companies.

• Drilling rents, inspects, manufactures and markets down-hole drilling equipment for energy, mining, water well and industrial drilling sectors.

• Artificial Lift assembles and markets artificial lift equipment, including the Petrovalve line of rod pump components, electric submersible pumps, gas separators, valves and services that support coal bed methane and oil production.

The Company evaluates performance based upon several criteria. The primary financial measure is segment income before taxes. 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, as well as estimated income tax provisions (benefits), are not allocated to reportable segments. Intersegment revenue totaled approximately $2.4 million, or 3.2% and $ 2.1 million, or 4.8%, of consolidated revenue for the three months ended September 30, 2011 and 2010, respectively and $6.9 million, or 3.8% and $5.7 million, or 5.4% of consolidated revenue for the nine months ended September 30, 2011 and 2010, respectively.

Summarized financial information regarding reportable segments for the three and nine months ended September 30, 2011 and 2010 includes (in thousands):

	Chemicals		Drilling		Artificial Lift		Corporate and Other			Total
Three Months Ended September 30, 2011
Net revenue from external customers	$	43,639	$	26,963	$	4,456	$	—		$	75,058
Gross margin		17,393		11,091		2,233		—			30,717
Income (loss) from operations		13,795		5,585		1,811		(5,086	)		16,105
Depreciation and amortization		409		2,056		50		53			2,568
Total assets		56,880		111,804		10,162		32,182			211,028
Capital expenditures		928		945		38		403			2,314
Three Months Ended September 30, 2010
Net revenue from external customers	$	18,203	$	17,185	$	4,594	$	—		$	39,982
Gross margin		8,160		6,381		1,526		—			16,067
Income (loss) from operations		5,956		2,340		1,161		(3,453	)		6,004
Depreciation and amortization		426		2,961		54		131			3,572
Total assets		41,345		114,176		8,772		18,006			182,299
Capital expenditures		106		840		3		119			1,068

	Chemicals		Drilling			Artificial Lift		Corporate and Other			Total
Nine Months Ended September 30, 2011
Net revenue from external customers	$	99,707	$	74,068		$	10,106	$	—		$	183,881
Gross margin		39,705		30,844			3,557		—			74,106
Income (loss) from operations		30,586		16,187			2,205		(15,683	)		33,295
Depreciation and amortization		1,189		5,979			155		209			7,532
Total assets		56,880		111,804			10,162		32,182			211,028
Capital expenditures		1,090		3,900			48		933			5,971
Nine Months Ended September 30, 2010
Net revenue from external customers	$	45,332	$	44,957		$	9,237	$	—		$	99,526
Gross margin		20,375		12,114			2,940		—			35,429
Income (loss) from operations		13,636		(1,061	)		1,795		(15,513	)		(1,143	)
Depreciation and amortization		1,290		8,836			165		292			10,583
Total assets		41,345		114,176			8,772		18,006			182,299
Capital expenditures		172		2,800			32		124			3,128

One customer and its affiliates accounted for $11.0 million and $4.1 million of consolidated revenue for the three months ended September 30, 2011 and 2010, respectively and for $25.2 million and $11.0 million of consolidated revenue for the nine months ended September 30, 2011 and 2010, respectively. Over 97.5% and 97.4% of aforementioned revenue for the three and nine month periods ended September 30, 2011, respectively and 96.4% and 96.8% of revenue for the same periods in 2010 were attributable to sales within the Chemicals segment.

Revenue by country is based upon the location of where services are provided and products are sold. Revenue by geographic location is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
United States	$	63,906	$	34,672	$	159,756	$	85,639
Other Countries		11,152		5,310		24,125		13,887
Total	$	75,058	$	39,982	$	183,881	$	99,526

At September 30, 2011, long-lived assets held in countries other than the United States represent 2.5%, or $5.2 million, of the Company's $211.0 million total assets. At September 30, 2010, long-lived assets held in countries other than the United States represented 2.5%, or $4.6 million, of the Company's $182.3 million total assets.