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,
	2017 ⁽¹⁾			2016 ⁽²⁾			2017 ⁽³⁾			2016 ⁽⁴⁾
Revenues:
Infrastructure Solutions	$	174,161		$	158,562		$	451,340		$	434,523
Corrosion Protection	102,276			95,084			353,381			281,939
Energy Services	65,435			54,878			216,799			183,656
Total revenues	$	341,872		$	308,524		$	1,021,520		$	900,118

Gross profit:
Infrastructure Solutions	$	41,189		$	40,566		$	106,803		$	109,485
Corrosion Protection	23,063			18,374			86,663			52,676
Energy Services	9,190			7,378			27,156			19,761
Total gross profit	$	73,442		$	66,318		$	220,622		$	181,922

Operating income (loss):
Infrastructure Solutions ⁽⁵⁾	$	(73,786	)	$	18,573		$	(59,786	)	$	37,448
Corrosion Protection ⁽⁶⁾	(2,659		)	513			15,793			(7,626		)
Energy Services ⁽⁷⁾	1,436			1,419			4,776			(5,311		)
Total operating income (loss)	(75,009		)	20,505			(39,217		)	24,511
Other income (expense):
Interest expense	(3,962		)	(3,825		)	(12,014		)	(11,081		)
Interest income	33			37			117			197
Other ⁽⁸⁾	(798		)	288			(1,593		)	(1,183		)
Total other expense	(4,727		)	(3,500		)	(13,490		)	(12,067		)
Income (loss) before taxes on income	$	(79,736	)	$	17,005		$	(52,707	)	$	12,444

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⁽¹⁾	Results include: (i) $6.7 million of 2017 Restructuring charges (see Note 3); (ii) $45.4 million of goodwill impairment charges (see Note 2); (iii) $41.0 million of definite-lived intangible asset impairment charges (see Note 2); and (iv) $2.0 million of costs incurred primarily related to the acquisition of Environmental Techniques and the planned divestiture of Bayou.


⁽²⁾	Results include: (i) $1.3 million of 2016 Restructuring charges (see Note 3); and (ii) $0.3 million of costs incurred primarily related to the acquisition of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions.


⁽³⁾	Results include: (i) $6.7 million of 2017 Restructuring charges (see Note 3); (ii) $45.4 million of goodwill impairment charges (see Note 2); (iii) $41.0 million of definite-lived intangible asset impairment charges (see Note 2); and (iv) $2.5 million of costs incurred primarily related to the acquisition of Environmental Techniques and the planned divestiture of Bayou.


⁽⁴⁾	Results include: (i) $14.8 million of 2016 Restructuring charges (see Note 3); (ii) $2.1 million of costs incurred primarily related to the acquisition of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions; and (iii) inventory step up expense of $3.6 million recognized as part of the accounting for business combinations (see Note 1).

⁽⁵⁾

Operating loss in the third quarter of 2017 includes: (i) $4.6 million of 2017 Restructuring charges (see Note 3); (ii) $45.4 million of goodwill impairment charges (see Note 2); (iii) $41.0 million of definite-lived intangible asset impairment charges (see Note 2); and (iv) $0.1 million of costs incurred primarily related to the acquisition of Environmental Techniques. Operating income in the third quarter of 2016 includes $0.3 million of costs incurred primarily related to the acquisition of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions.

Operating loss in the nine months ended September 30, 2017 includes: (i) $4.6 million of 2017 Restructuring charges (see Note 3); (ii) $45.4 million of goodwill impairment charges (see Note 2); (iii) $41.0 million of definite-lived intangible asset impairment charges (see Note 2); and (iv) $0.7 million of costs incurred primarily related to the acquisition of Environmental Techniques. Operating income in the nine months ended September 30, 2016 includes: (i) $3.1 million of 2016 Restructuring charges (see Note 3); (ii) $2.1 million of costs incurred primarily related to the acquisition of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions; and (iii) inventory step up expense of $3.6 million recognized as part of the accounting for business combinations (see Note 1).


⁽⁶⁾	Operating income (loss) in the quarter and nine months ended September 30, 2017 includes: (i) $2.2 million of 2017 Restructuring charges (see Note 3); and (ii) $1.9 million of costs incurred primarily related to the planned divestiture of Bayou.

Operating income (loss) in the quarter and nine months ended September 30, 2016 includes 2016 Restructuring charges of $0.2 million and $3.9 million, respectively (see Note 3).


⁽⁷⁾	Operating income in the quarter and nine months ended September 30, 2016 includes 2016 Restructuring charges of $1.1 million and $7.6 million, respectively (see Note 3).


⁽⁸⁾	Other expenses for the nine months ended September 30, 2016 includes 2016 Restructuring charges of $0.3 million (see Note 3).

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



	Quarters Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues ⁽¹⁾:
United States	$	250,815		$	232,734		$	787,046		$	684,088
Canada	41,939			39,161			98,053			94,113
Europe	17,367			13,850			51,656			43,771
Other foreign	31,751			22,779			84,765			78,146
Total revenues	$	341,872		$	308,524		$	1,021,520		$	900,118

Gross profit:
United States	$	56,295		$	51,217		$	179,029		$	138,869
Canada	9,099			8,373			19,703			19,644
Europe	2,989			2,794			9,414			8,893
Other foreign	5,059			3,934			12,476			14,516
Total gross profit	$	73,442		$	66,318		$	220,622		$	181,922

Operating income (loss):
United States	$	(57,537	)	$	15,402		$	(25,405	)	$	15,547
Canada	1,148			5,410			5,086			10,208
Europe	(2,860		)	352			(2,672		)	1,108
Other foreign	(15,760		)	(659		)	(16,226		)	(2,352		)
Total operating income (loss)	$	(75,009	)	$	20,505		$	(39,217	)	$	24,511

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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.