Business Segments

The Company’s reportable operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. The key factors used to identify these reportable operating segments are the organization and alignment of the Company’s internal operations, the nature of the products and services, and customer type.

The Company has two reportable operating segments, Integrated Solutions and Services and Applied Product Technologies. The business segments are described as follows:

Integrated Solutions and Services is a group entirely focused on engaging directly with end users through direct sales with a market vertical focus. Integrated Solutions and Services provides tailored services and solutions in collaboration with the customers backed by life‑cycle services including on‑demand water, outsourced water, recycle / reuse and emergency response service alternatives to improve operational reliability, performance and environmental compliance. Key offerings within this segment also include equipment systems for industrial needs (influent water, boiler feed water, ultrahigh purity, process water, wastewater treatment and recycle / reuse), full-scale outsourcing of operations and maintenance, and municipal services, including odor and corrosion control services.

Applied Product Technologies is focused on developing product platforms to be sold primarily through third party channels. This segment primarily engages in indirect sales through independent sales representatives, distributors and aftermarket channels. Applied Product Technologies provides a range of highly differentiated and scalable products and technologies specified by global water treatment designers, OEMs, engineering firms and integrators. Key offerings within this segment include filtration and separation, disinfection, wastewater solutions, anode and electrochlorination technology and aquatics technologies and solutions for the global recreational and commercial pool market.

The Company evaluates its business segments’ operating results based on earnings before interest, taxes, depreciation and amortization, and certain other charges that are specific to the activities of the respective segments. Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense and certain other charges. Certain other charges include restructuring and other business transformation charges that have been undertaken to align and reposition the Company to the current reporting structure, acquisition related costs (including transaction costs, certain integration costs and recognition of backlog intangible assets recorded in purchase accounting) and share-based compensation charges.

Since certain administrative and other operating expenses and other items have not been allocated to business segments, the results in the below table are not necessarily a measure computed in accordance with generally accepted accounting principles and may not be comparable to other companies.



	Three Months Ended December 31,
	2019			2018
Total sales
Integrated Solutions and Services	$	231,800		$	212,277
Applied Product Technologies	138,529			130,534
Total sales	370,329			342,811
Intersegment sales
Integrated Solutions and Services	3,662			1,779
Applied Product Technologies	20,562			18,030
Total intersegment sales	24,224			19,809
Sales to external customers
Integrated Solutions and Services	228,138			210,498
Applied Product Technologies	117,967			112,504
Total sales	346,105			323,002
Earnings before interest, taxes, depreciation and amortization (EBITDA)
Integrated Solutions and Services	48,775			41,884
Applied Product Technologies	66,716			8,851
Corporate	(20,656		)	(34,004		)
Total EBITDA	94,835			16,731
Depreciation and amortization
Integrated Solutions and Services	15,621			13,958
Applied Product Technologies	3,574			4,334
Corporate	5,948			4,798
Total depreciation and amortization	25,143			23,090
Operating profit (loss)
Integrated Solutions and Services	33,154			27,926
Applied Product Technologies	63,142			4,517
Corporate	(26,604		)	(38,802		)
Total operating profit	69,692			(6,359		)
Interest expense	(13,583		)	(14,443		)
Income (loss) before income taxes	56,109			(20,802		)
Income tax (expense) benefit	(2,603		)	4,514
Net income (loss)	$	53,506		$	(16,288	)
Capital expenditures
Integrated Solutions and Services	$	14,187		$	13,685
Applied Product Technologies	2,283			2,208
Corporate	1,102			1,676
Total capital expenditures	$	17,572		$	17,569



	December 31, 2019		September 30, 2019
Assets
Integrated Solutions and Services	$	818,051	$	762,707
Applied Product Technologies	596,003		657,879
Corporate	396,248		317,262
Total assets	$	1,810,302	$	1,737,848
Goodwill
Integrated Solutions and Services	$	224,279	$	222,013
Applied Product Technologies	172,727		170,877
Total goodwill	$	397,006	$	392,890