Note 12 - Segment Reporting

9 Months Ended

Sep. 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 nine months ended September 30, 2018 has been revised to conform to the current period presentation.

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

	Quarters Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Infrastructure Solutions	$	156,087		$	155,681		$	443,069		$	450,840
Corrosion Protection		75,901			105,624			217,996			300,118
Energy Services		76,801			78,374			243,368			248,612
Total revenues	$	308,789		$	339,679		$	904,433		$	999,570
Gross profit:
Infrastructure Solutions	$	39,569		$	38,135		$	105,026		$	100,793
Corrosion Protection		17,232			26,411			46,797			74,524
Energy Services		9,991			8,127			30,701			29,913
Total gross profit	$	66,792		$	72,673		$	182,524		$	205,230
Operating income (loss):
Infrastructure Solutions (1)	$	18,376		$	13,088		$	33,211		$	29,241
Corrosion Protection (2)		2,362			8,299			(3,261	)		20,214
Energy Services		2,257			456			7,479			6,081
Corporate (3)		(8,346	)		(8,834	)		(23,095	)		(24,887	)
Total operating income		14,649			13,009			14,334			30,649
Other income (expense):
Interest expense		(3,446	)		(3,870	)		(10,602	)		(13,236	)
Interest income		268			130			814			239
Other (4)		(5,236	)		(9,281	)		(6,925	)		(10,049	)
Total other expense		(8,414	)		(13,021	)		(16,713	)		(23,046	)
Income (loss) before taxes on income	$	6,235		$	(12	)	$	(2,379	)	$	7,603

⁽¹⁾  Operating income in the third quarters of 2019 and 2018 include $1.2 million and $5.9 million, respectively, of 2017 Restructuring charges (see Note 4) and $0.5 million and $0.1 million, respectively, of costs primarily related to the planned divestiture of certain international operations. Operating income in the first nine months of 2019 and 2018 includes $4.7 million and $11.7 million, respectively, of 2017 Restructuring charges and $1.0 million and $0.4 million, respectively, of divestiture costs.  Additionally, operating income in the first nine months of 2019 includes $9.0 million of impairment charges to assets held for sale (see Note 5).

⁽²⁾  Operating income in the third quarters of 2019 and 2018 include $0.8 million and $1.0 million, respectively, of 2017 Restructuring charges (see Note 4) and less than $0.1 million and $1.6 million, respectively, of costs primarily related to the planned divestiture of certain international operations in 2019 and the divestiture of Bayou in 2018.  Operating income in the first nine months of 2019 and 2018 includes $4.3 million and $2.8 million, respectively, of 2017 Restructuring charges, and $0.1 million and $1.8 million, respectively, of divestiture costs.  Additionally, operating income in the first nine months of 2019 includes $2.9 million of impairment charges to assets held for sale (see Note 5).

⁽³⁾  Operating loss in the third quarters of 2019 and 2018 include $1.1 and $0.3 million, respectively, of 2017 Restructuring charges (see Note 4), and $1.3 million and $3.1 million, respectively, of costs primarily related to the planned divestiture of certain international operations in 2019 and the divestiture of Bayou in 2018.  Operating loss in the first nine months of 2019 and 2018 includes $2.4 million and $0.9 million, respectively, of 2017 Restructuring charges and $1.6 million and $3.9 million, respectively, of divestiture costs.

⁽⁴⁾  Other expense in the third quarter and first nine months of 2019 includes $5.3 million and $6.5 million, respectively, of 2017 Restructuring charges (see Note 4).  Other expense for the third quarter and first nine months of 2018 includes charges of $8.7 million related to the loss on the sale of Bayou (see Note 1) and $0.2 million related to 2017 restructuring charges (see Note 4).  

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

	Quarters Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenues: (1)
United States	$	231,904	$	246,574	$	680,666	$	736,805
Canada		32,124		35,920		89,584		95,185
Europe		16,347		16,281		49,731		48,135
Other foreign		28,414		40,904		84,452		119,445
Total revenues	$	308,789	$	339,679	$	904,433	$	999,570
Gross profit: (1)
United States	$	48,331	$	46,586	$	130,950	$	137,071
Canada		6,424		7,265		14,906		17,494
Europe		4,309		2,931		11,139		5,467
Other foreign		7,728		15,891		25,529		45,198
Total gross profit	$	66,792	$	72,673	$	182,524	$	205,230

⁽¹⁾  Revenues and gross profit are attributed to the country of origin