Segment Reporting and Geographic Information

3 Months Ended

Mar. 31, 2016

Segment Reporting and Geographic Information

Segment Reporting and Geographic Information

13.Segment Reporting and Geographic Information

The Company has two business division segments based on the products it delivers:

Catalyst division —  The Catalyst division develops and produces catalysts to reduce emissions from gasoline, diesel and natural gas combustion engines. Most catalytic systems require significant amounts of costly PGMs to operate effectively. Using its proprietary mixed-phase catalyst, or MPC®, technology, the Catalyst division has developed a family of unique high-performance catalysts, featuring inexpensive base-metals with low or even no PGM content. It has recently developed a new generation of catalyst technologies, which the Company believes will enable further advances in catalyst performance and further reductions in PGM usage. Since 2001, the Catalyst division has supplied over twelve million catalyst parts to light duty vehicle OEM customers. The Catalyst division is also a supplier of products for the Company’s Heavy Duty Diesel Systems division. Intersegment revenues are based on market prices.

Heavy Duty Diesel Systems division — The Heavy Duty Diesel Systems division designs and manufactures exhaust emissions control solutions for a wide range of heavy duty diesel applications. It offers a full range of DuraFit™ OEM replacement diesel particulate filters (DPFs) and diesel oxidation catalysts (DOCs), and products for the verified retrofit and non-retrofit OEM markets through its distribution/dealer network and direct sales. The Company believes that its Heavy Duty Diesel Systems division offers one of the industry’s most comprehensive portfolios of emissions control systems for use in engine retrofit programs that have been evaluated and verified as compliant with applicable state and federal regulations, as well as regulations imposed by several European countries. The Company has received certification from the Verification of Emission Reduction Technologies Association (VERT) for our Purifilter® exhaust gas recirculation (EGR) diesel particulate filter system, which expands its retrofit market opportunities into South America and other international locations. Sales of emissions control systems by the Heavy Duty Diesel Systems division are driven by the regulation of diesel emissions, particularly in the State of California.

Corporate — Corporate includes cost for personnel, insurance and public company expenses such as legal, audit and taxes that are not allocated down to the operating divisions.

Summarized financial information for the Company’s reportable segments is as follows (in thousands):

	Three Months Ended
	March 31,
	2016			2015
Revenues
Catalyst	$	6,543		$	6,811
Heavy Duty Diesel Systems	4,088			4,152
Eliminations (1)	(885		)	(622		)
Total	$	9,746		$	10,341
Loss from operations
Catalyst	$	(271	)	$	(558	)
Heavy Duty Diesel Systems	(784		)	(378		)
Corporate	(2,117		)	(1,710		)
Eliminations (1)	(45		)	(68		)
Total	$	(3,217	)	$	(2,714	)

(1) Elimination of Catalyst revenue and profit in ending inventory related to sales to Heavy Duty Diesel Systems.

Net sales by geographic region based on the location of the Company’s point of sale is as follows (in thousands):

	Three Months Ended
	March 31,
	2016		2015
United States	$	5,878	$	6,347
Canada	2,996		3,122
Europe	872		872
Total international	3,868		3,994
Total revenues	$	9,746	$	10,341