XML 36 R22.htm IDEA: XBRL DOCUMENT v3.22.0.1
Industry Segment and Foreign Operations
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Industry Segment and Foreign Operations Industry Segment and Foreign Operations
Our operations are managed through two operating segments: (i) Polymer segment and (ii) Chemical segment. In accordance with the provisions of ASC 280, “Segment Reporting,” our chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company.
•Polymer Segment. Our Polymer segment is comprised of our SBCs and other engineered polymers business.
•Chemical Segment. Our Chemical segment is comprised of our pine-based specialty products business.
Our chief operating decision maker uses operating income (loss) as the primary measure of each segment's operating results in order to allocate resources and in assessing the company's performance. In accordance with ASC 280, Segment Reporting, we have presented operating income (loss) for each segment. We currently do not have sales between segments.
Operating Results by Segment
Year Ended December 31, 2021Year Ended December 31, 2020
PolymerChemicalTotalPolymerChemicalTotal
(In thousands)
Revenue$1,098,785 $871,344 $1,970,129 $857,558 $705,592 $1,563,150 
Cost of goods sold 775,804 605,569 1,381,373 627,297 537,982 1,165,279 
Gross profit322,981 265,775 588,756 230,261 167,610 397,871 
Operating expenses: 
Research and development29,869 10,537 40,406 29,972 10,771 40,743 
Selling, general, and administrative91,360 72,807 164,167 90,074 71,870 161,944 
Depreciation and amortization51,042 75,433 126,475 52,910 73,112 126,022 
Impairment of goodwill— — — — 400,000 400,000 
Loss on disposal of fixed assets292 587 879 503 247 750 
Operating income (loss)$150,418 $106,411 256,829 $56,802 $(388,390)(331,588)
Other income (expense)(209)995 
Disposition and exit of business activities(149)175,189 
Loss on extinguishment of debt— (40,843)
Earnings of unconsolidated joint venture461 457 
Interest expense, net(41,840)(57,930)
Income (loss) before income taxes$215,092 $(253,720)
Year Ended December 31, 2019
PolymerChemicalTotal
(In thousands)
Revenue$1,052,968 $751,468 $1,804,436 
Cost of goods sold 820,410 569,597 1,390,007 
Gross profit232,558 181,871 414,429 
Operating expenses: 
Research and development29,392 11,681 41,073 
Selling, general, and administrative86,025 63,775 149,800 
Depreciation and amortization59,151 77,020 136,171 
Gain on insurance proceeds— (32,850)(32,850)
Loss on disposal of fixed assets647 126 773 
Operating income (loss)$57,343 $62,119 119,462 
Other expense3,339 
Loss on extinguishment of debt(3,521)
Earnings of unconsolidated joint venture506 
Interest expense, net(75,782)
Income (loss) before income taxes$44,004 
Goodwill
The Company conducts an annual impairment review of goodwill on October 1st of each year, unless events occur which trigger the need for an interim impairment review.
2021 Evaluation. As of October 1, 2021, we assessed qualitative factors and determined that it was not more likely than not that the fair values of our reporting units were less than their carrying values as of the testing date. As a result of our assessment, no goodwill impairment charge was recorded during the year ended December 31, 2021. There can be no assurances that future sustained declines in macroeconomic or business conditions affecting our industry will not occur, which could result in goodwill impairment charges in future periods.
2020 Evaluation. During the third quarter of 2020, the Company updated its annual long-range plan, taking into consideration the following:
•a continued decline in rosin margins, resulting from excess hydrocarbon supply, negatively affecting our adhesives applications
•a significant decline in gum turpentine pricing, which began in the second half of 2019, resulting in lower CST margins
•the impacts of COVID-19, which weakened demand fundamentals, including applications such as oilfield, tires, and automotive
These and other factors were considered indicators of impairment of our Chemical segment’s goodwill. We performed an interim impairment test of goodwill as of September 30, 2020. As a result, we recorded a non-cash impairment charge of $400.0 million within the Chemical segment. The Company updated this assessment as of October 1, 2020 (our annual impairment date) utilizing a qualitative approach, and noted no impairment indicators during the fourth quarter of 2020.
The Company estimated the fair value using both an income and market approach. The determination of the fair value using the income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The Company estimates future cash flows based upon EBITDA projections within our long-range plan, discounted at an appropriate risk-adjusted rate.
Under the income approach, the fair value for Chemical segment was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We used our internal forecast, including our annual long-range plan, updated for recent events, to estimate future cash flows, including a terminal value. Our internal forecast includes assumptions about future commodity pricing and expected demand for goods and services. Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in our forecast.
Valuations using the market approach were derived from metrics of selected publicly traded peer companies. The selection of peer companies was based on the markets in which the Chemical segment operates, considering risk profiles, size, geography, and diversity of products and services.
We derived our risk-adjusted rate using a capital asset pricing model and analyzing published rates for industries and comparable businesses similar to our Chemical segment taking into account the cost of equity and debt. We used a risk-adjusted rate that is commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecast.
Changes in goodwill from January 1, 2021 through December 31, 2021 were as follows:
 Chemical
 (In thousands)
Balance at January 1, 2021$375,061 
Foreign currency translation(2,144)
 Balance at December 31, 2021$372,917 
Impact of Hurricane Michael
During the year ended December 31, 2019, we finalized our insurance claims with our carrier related to Hurricane Michael. As result, we received payments from our carrier of $32.9 million, of which $1.1 million was received in 2018 and deferred into 2019 when realized, which has been recorded as a gain on insurance proceeds within the Consolidated Statement of Operations. This brings our total insurance proceeds to $41.8 million to date, which offsets the lost margin and reimburses us for the direct costs and capital expenditures known to date.
Long-Lived Assets Including Goodwill and Total Assets
 December 31, 2021December 31, 2020
PolymerChemicalTotalPolymerChemicalTotal
(In thousands)
Property, plant, and equipment, net$521,304 $413,539 $934,843 $523,067 $419,636 $942,703 
Investment in unconsolidated joint venture$12,023 $— $12,023 $12,723 $— $12,723 
Goodwill$— $372,917 $372,917 $— $375,061 $375,061 
Total assets $1,259,912 $1,394,696 $2,654,608 $1,104,954 $1,356,003 $2,460,957 
During the years ended December 31, 2021, 2020, and 2019, no single customer accounted for 10.0% or more of our total revenue.
For geographic reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. Long-lived assets consist primarily of property, plant, and equipment, which are attributed to the geographic location in which they are located and presented at historical cost.
Revenue by Geographic Region
 December 31, 2021December 31, 2020
 PolymerChemicalTotalPolymerChemicalTotal
 (In thousands)
Revenue:
United States$422,599 $339,670 $762,269 $311,129 $289,989 $601,118 
Germany125,146 58,339 183,485 89,304 44,439 133,743 
All other countries551,040 473,335 1,024,375 457,125 371,164 828,289 
 $1,098,785 $871,344 $1,970,129 $857,558 $705,592 $1,563,150 
 December 31, 2019
 PolymerChemicalTotal
 (In thousands)
Revenue:   
United States$352,735 $317,347 $670,082 
Germany107,661 51,598 159,259 
All other countries592,572 382,523 975,095 
 $1,052,968 $751,468 $1,804,436 
Long-Lived Assets by Geographic Region
 December 31, 2021December 31, 2020
 PolymerChemicalTotalPolymerChemicalTotal
 (In thousands)
Long-lived assets, at cost:  
United States$687,569 $436,934 $1,124,503 $591,361 $413,787 $1,005,148 
Taiwan195,112 — 195,112 191,726 — 191,726 
France105,259 17,913 123,172 156,410 15,489 171,899 
Germany77,756 6,325 84,081 79,388 6,057 85,445 
Sweden— 74,575 74,575 — 78,329 78,329 
All other countries47,831 77,404 125,235 68,833 73,602 142,435 
 $1,113,527 $613,151 $1,726,678 $1,087,718 $587,264 $1,674,982 
Our capital expenditures, excluding software and other intangibles, for the Polymer segment, excluding capital expenditures by the KFPC joint venture, were $45.9 million and $36.5 million during the year ended December 31, 2021 and 2020, respectively, and capital expenditures, excluding software and other intangibles, for our Chemical segment were $44.5 million and $37.4 million during the year ended December 31, 2021 and 2020, respectively.