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Note 12 - Segment Reporting

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12.

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 leadership that reports to the chief operating decision manager (“CODM”). The operating results and financial information reported by each segment 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 and divestiture expenses and restructuring charges, if applicable.

In 2019, the Company began reporting Corporate expenses separately rather than allocating those costs to the operating segments. The reported information for the quarter and six months ended June 30, 2018 has been revised to conform to the current period presentation.

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

		Quarters Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Revenues:
Infrastructure Solutions		$	155,439			$	160,732			$	286,982			$	295,159
Corrosion Protection			77,597				96,389				142,095				194,494
Energy Services			85,704				77,909				166,567				170,238
Total revenues		$	318,740			$	335,030			$	595,644			$	659,891

Gross profit:
Infrastructure Solutions		$	38,871			$	35,949			$	65,458			$	62,658
Corrosion Protection			16,692				24,537				29,564				48,113
Energy Services			11,874				10,567				20,710				21,786
Total gross profit		$	67,437			$	71,053			$	115,732			$	132,557

Operating income (loss):
Infrastructure Solutions ⁽¹⁾		$	9,120			$	12,916			$	14,835			$	16,153
Corrosion Protection ⁽²⁾			(3,863	)			6,953				(5,623	)			11,915
Energy Services			4,107				2,498				5,222				5,625
Corporate ⁽³⁾			(8,905	)			(7,908	)			(14,749	)			(16,053	)
Total operating income (loss)			459				14,459				(315	)			17,640
Other income (expense):
Interest expense			(3,566	)			(3,923	)			(7,156	)			(9,366	)
Interest income			261				62				546				109
Other ⁽⁴⁾			(1,015	)			(506	)			(1,689	)			(768	)
Total other expense			(4,320	)			(4,367	)			(8,299	)			(10,025	)
Income (loss) before taxes on income		$	(3,861	)		$	10,092			$	(8,614	)		$	7,615

⁽¹⁾

Operating income in the second quarter of 2019 and 2018 includes $1.4 million and $2.5 million, respectively, of 2017 Restructuring charges and $0.4 million and $0.2 million, respectively, of costs primarily related to the planned divestiture of certain international operations (see note 4). Operating income in the first six months of 2019 and 2018 includes $3.4 million and $5.7 million, respectively, of 2017 Restructuring charges and $0.5 million and $0.2 million, respectively, of divestiture costs. Additionally, operating income in the second quarter and first six months of 2019 includes $9.0 million of impairment charges to assets held for sale (see Note 5).

⁽²⁾

Operating income (loss) in the second quarter of 2019 and 2018 includes $3.3 million and $0.3 million, respectively, of 2017 Restructuring charges and less than $0.1 million and $0.1 million, respectively, of costs primarily related to the planned divestiture of certain international operations (see Note 4). Operating income (loss) in the first six months of 2019 and 2018 includes $3.5 million and $1.8 million, respectively, of 2017 restructuring charges, and less than $0.1 million and $0.2 million, respectively, of costs primarily related to the planned divestiture of certain international operations. Additionally, operating income in the second quarter and first six months of 2019 includes $2.9 million of impairment charges to assets held for sale (see Note 5).

⁽³⁾

Operating loss in the second quarter of 2019 and 2018 includes $0.9 and less than $0.1 million, respectively, of 2017 Restructuring charges, and $0.4 million and $0.5 million, respectively of costs primarily related to the planned divestiture of certain international operations (see Note 4). Operating loss in the first six months of 2019 and 2018 includes $1.3 million and $0.6 million, respectively, of 2017 Restructuring charges and $0.4 million and $0.8 million, respectively of divestiture costs.

⁽⁴⁾

Other expense in the second quarter and first six months of 2019 includes $0.9 million and $1.1 million, respectively, of 2017 Restructuring charges (see Note 4).

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

		Quarters Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Revenues:⁽¹⁾
United States		$	239,987			$	253,699			$	448,762			$	490,231
Canada			33,392				30,426				57,460				59,265
Europe			17,381				15,846				33,384				31,855
Other foreign			27,980				35,059				56,038				78,540
Total revenues		$	318,740			$	335,030			$	595,644			$	659,891

Gross profit: ⁽¹⁾
United States		$	50,792			$	58,599			$	82,619			$	108,162
Canada			5,028				5,454				8,482				10,229
Europe			3,311				1,401				6,830				2,535
Other foreign			8,306				5,599				17,801				11,631
Total gross profit		$	67,437			$	71,053			$	115,732			$	132,557

⁽¹⁾

Revenues and gross profit are attributed to the country of origin