Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company has three operating segments, which are also its reportable segments: Infrastructure Solutions; Corrosion Protection; and Energy Services. The Company’s operating segments correspond to its management organizational structure. Each operating segment has a president who reports to the Company’s chief executive officer, who is also the chief operating decision manager (“CODM”). The operating results and financial information reported by each of the segments are evaluated separately, regularly reviewed and used by the CODM to evaluate segment performance, allocate resources and determine management incentive compensation.

The following disaggregated financial results have been prepared using a management approach that is consistent with the basis and manner with which management internally disaggregates financial information for the purpose of making internal operating decisions. The Company evaluates performance based on stand-alone operating income (loss), which includes acquisition-related expenses, restructuring charges and an allocation of corporate-related expenses.

Financial information by segment was as follows (in thousands):

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2016 (1)			2015 (2)			2016 (3)			2015 (4)
Revenues:
Infrastructure Solutions	$	158,562		$	149,606		$	434,523		$	421,170
Corrosion Protection	95,084			121,392			281,939			329,157
Energy Services	54,878			85,597			183,656			252,530
Total revenues	$	308,524		$	356,595		$	900,118		$	1,002,857
Gross profit:
Infrastructure Solutions	$	40,566		$	38,428		$	109,485		$	106,074
Corrosion Protection	18,374			27,595			52,676			70,311
Energy Services	7,378			11,098			19,761			31,979
Total gross profit	$	66,318		$	77,121		$	181,922		$	208,364
Operating income (loss):
Infrastructure Solutions (5)	$	18,573		$	16,255		$	37,448		$	35,701
Corrosion Protection (6)	513			6,886			(7,626		)	8,323
Energy Services (7)	1,419			1,797			(5,311		)	4,562
Total operating income	20,505			24,938			24,511			48,586
Other income (expense):
Interest expense	(3,825		)	(3,144		)	(11,081		)	(9,365		)
Interest income	37			25			197			229
Other	288			(359		)	(1,183		)	(2,360		)
Total other expense	(3,500		)	(3,478		)	(12,067		)	(11,496		)
Income before taxes on income	$	17,005		$	21,460		$	12,444		$	37,090

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⁽¹⁾  Results include: (i) $1.3 million of 2016 Restructuring charges (see Note 3); (ii) $0.4 million of 2014 Restructuring expense reversals (see Note 3); and (iii) $0.3 million of costs incurred related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ, Concrete Solutions and other acquisition targets.

⁽²⁾  Results include (i) $1.5 million of 2014 Restructuring charges (see Note 3); and (ii) $(0.5) million of costs incurred related to the acquisition of Schultz and other acquisition targets.

⁽³⁾  Results include: (i) $14.8 million of 2016 Restructuring charges (see Note 3); (ii) $0.5 million of 2014 Restructuring expense reversals (see Note 3); (iii) $2.1 million of costs incurred related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ, Concrete Solutions and other acquisition targets; and (iv) inventory step up expense of $3.6 million recognized as part of the accounting for business combinations.

⁽⁴⁾  Results include: (i) $10.7 million of 2014 Restructuring charges (see Note 3); and (ii) $0.8 million of costs incurred related to the acquisition of Schultz and other acquisition targets.

⁽⁵⁾  Operating income for the quarter ended September 30, 2016 includes: (i) less than $0.1 million of 2016 Restructuring charges (see Note 3); (ii) $0.4 million of 2014 Restructuring expense reversals (see Note 3); and (iii) $0.3 million of costs incurred related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ, Concrete Solutions and other acquisition targets. Operating income for the quarter ended September 30, 2015 includes $1.4 million of 2014 Restructuring charges (see Note 3).

Operating income for the nine months ended September 30, 2016 includes: (i) $3.1 million of 2016 Restructuring charges (see Note 3); (ii) $0.5 million of 2014 Restructuring expense reversals (see Note 3); (iii) $2.1 million of costs incurred related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ, Concrete Solutions and other acquisition targets; and (iv) inventory step up expense of $3.6 million recognized as part of the accounting for business combinations. Operating income for the nine months ended September 30, 2015 includes $7.9 million of 2014 Restructuring charges (see Note 3).

⁽⁶⁾  Operating income for the quarter ended September 30, 2016 includes $0.2 million of 2016 Restructuring charges (see Note 3). Operating income for the quarter ended September 30, 2015 includes $0.5 million of acquisition related expenses.

Operating loss for the nine months ended September 30, 2016 includes $3.9 million of 2016 Restructuring charges (see Note 3). Operating income for the nine months ended September 30, 2015 includes $0.5 million of acquisition related expenses.

⁽⁷⁾  Operating income for the quarter ended September 30, 2016 includes $1.1 million of 2016 Restructuring charges (see Note 3).

Operating loss for the nine months ended September 30, 2016 includes $7.6 million of 2016 Restructuring charges (see Note 3). Operating income for the nine months ended September 30, 2015 includes $0.3 million of costs incurred related to the acquisition of Schultz.

The following table summarizes revenues, gross profit and operating income by geographic region (in thousands):

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2016			2015		2016			2015
Revenues (1):
United States	$	232,734		$	267,001	$	684,088		$	742,976
Canada	39,161			45,340		94,113			131,391
Europe	13,850			14,905		43,771			42,668
Other foreign	22,779			29,349		78,146			85,822
Total revenues	$	308,524		$	356,595	$	900,118		$	1,002,857
Gross profit:
United States	$	51,217		$	56,243	$	138,869		$	148,736
Canada	8,373			9,998		19,644			30,677
Europe	2,794			4,025		8,893			12,085
Other foreign	3,934			6,855		14,516			16,866
Total gross profit	$	66,318		$	77,121	$	181,922		$	208,364
Operating income (loss):
United States	$	15,402		$	11,464	$	15,547		$	19,188
Canada	5,410			6,258		10,208			19,700
Europe	352			570		1,108			2,511
Other foreign	(659		)	6,646		(2,352		)	7,187
Total operating income	$	20,505		$	24,938	$	24,511		$	48,586

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⁽¹⁾  Revenues are attributed to the country of origin for the Company’s legal entities. For a significant majority of its legal entities, the country of origin relates to the country or geographic area that it services.