Note 12 - Segment Reporting

6 Months Ended

Jun. 30, 2020

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.

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

	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues:
Infrastructure Solutions	$	137,392		$	155,439		$	267,636		$	286,982
Corrosion Protection		55,491			77,597			121,559			142,095
Energy Services		52,134			85,704			143,197			166,567
Total revenues	$	245,017		$	318,740		$	532,392		$	595,644
Gross profit:
Infrastructure Solutions	$	35,667		$	38,871		$	67,037		$	65,457
Corrosion Protection		14,111			16,692			23,028			29,565
Energy Services		3,797			11,874			13,394			20,710
Total gross profit	$	53,575		$	67,437		$	103,459		$	115,732
Operating income (loss):
Infrastructure Solutions (1)	$	21,004		$	9,120		$	34,559		$	14,835
Corrosion Protection (2)		699			(3,863	)		(5,748	)		(5,623	)
Energy Services (3)		(5,713	)		4,107			(3,537	)		5,222
Corporate (4)		(7,263	)		(8,905	)		(15,151	)		(14,749	)
Total operating income (loss)		8,727			459			10,123			(315	)
Other income (expense):
Interest expense		(4,690	)		(3,566	)		(7,886	)		(7,156	)
Interest income		215			261			443			546
Other (5)		964			(1,015	)		1,389			(1,689	)
Total other expense		(3,511	)		(4,320	)		(6,054	)		(8,299	)
Income (loss) before taxes on income	$	5,216		$	(3,861	)	$	4,069		$	(8,614	)

⁽¹⁾  Operating income in the second quarter of 2020 and 2019 includes $0.1 million and $1.4 million, respectively, of restructuring charges (see Note 4) and $0.0 million and $0.4 million, respectively, of costs primarily related to the divestiture of certain international operations. Operating income in the first six months of 2020 and 2019 includes $0.5 million and $3.4 million, respectively, of restructuring charges (see Note 4) and $0.2 million and $0.5 million, respectively, of divestiture costs. Additionally, operating income in the second quarter and first six months of 2020 includes $0.7 million of impairment reversals while operating income in the second quarter and first six months of 2019 includes $9.0 million of impairment charges to assets held for sale.

⁽²⁾  Operating income (loss) in the second quarter of 2020 and 2019 includes $1.3 million and $3.3 million, respectively, of restructuring charges (see Note 4). Operating loss in the first six months of 2020 and 2019 includes $3.1 million and $3.5 million, respectively, of restructuring charges (see Note 4). 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.

⁽³⁾ Operating loss in the second quarter of 2020 and 2019 includes $3.5 million and less than $0.1 million, respectively, of restructuring charges (see Note 4). Operating loss in the first six months of 2020 and 2019 includes $3.6 million and less than $0.1 million respectively, of restructuring charges (see Note 4). Additionally, operating loss in the second quarter and first six months of 2020 includes $1.3 million of goodwill impairment charges and $1.0 million of definite-lived intangible asset impairment charges.

⁽⁴⁾  Operating loss in the second quarter of 2020 and 2019 includes $0.9 million and $0.9 million, respectively, of restructuring charges (see Note 4) and $0.7 million and $0.4 million, respectively, of divestiture costs. Operating loss in the first six months of 2020 and 2019 includes $1.6 million and $1.3 million, respectively, of restructuring charges (see Note 4) and $1.3 million and $0.4 million, respectively, of divestiture costs.

⁽⁵⁾  Other expense in the second quarter of 2020 includes gains of $0.9 million related to restructuring (see Note 4). Other expense in the second quarter of 2019 includes $0.9 million of restructuring charges (see Note 4). Other expense in the first six months of 2020 and 2019 includes gains of $0.3 million and charges of $1.1 million, respectively, related to restructuring (see Note 4).  Other expense in the first six months of 2020 also includes gains of $0.7 million related to divestitures of Insituform Australia and Insituform Spain (see Note 1).

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues: (1)
United States	$	197,447	$	239,987	$	430,667	$	448,762
Canada		24,995		33,392		46,850		57,460
Europe		7,192		17,381		17,863		33,384
Other foreign		15,383		27,980		37,012		56,038
Total revenues	$	245,017	$	318,740	$	532,392	$	595,644
Gross profit: (1)
United States	$	41,334	$	50,792	$	80,970	$	82,619
Canada		5,369		5,028		8,100		8,482
Europe		2,256		3,311		5,204		6,830
Other foreign		4,616		8,306		9,185		17,801
Total gross profit	$	53,575	$	67,437	$	103,459	$	115,732

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