Segment Reporting

12 Months Ended

Aug. 31, 2012

Segment Reporting

Note 20 — Segment Reporting

Financial information from continuing operations for the Company's two segments, Industrial Ingredients and Food Ingredients, is presented below. Industrial Ingredients and Food Ingredients are broad categories of end-market users served by the Company’s U.S. operations. The Industrial Ingredients segment provides carbohydrate-based starches for industrial applications, primarily in the paper and packaging products and fuel ethanol. The Food Ingredients segment produces specialty starches for food applications. A third item for "corporate and other" activity has been presented to provide reconciliation to amounts reported in the consolidated financial statements. Corporate and other represents the activities related to the corporate headquarters such as public company reporting, personnel costs of the executive management team, corporate-wide professional services and consolidation entries. The accounting policies of the reportable segments are the same as those described in Note 2.

	Year Ended August 31,
	2012			2011			2010
	(Dollars in thousands)
Sales
Industrial ingredients
Industrial Starch	$	156,945		$	127,471		$	115,681
Ethanol		101,874			105,730			68,335
	$	258,819		$	233,201		$	184,016
Food ingredients		102,544			82,240			70,258
	$	361,363		$	315,441		$	254,274
Depreciation and amortization
Industrial ingredients	$	10,879		$	10,812		$	10,850
Food ingredients		1,989			2,110			2,341
Corporate and other		1,259			1,493			1,600
	$	14,127		$	14,415		$	14,791
Income (loss) from continuing operations
Industrial ingredients	$	(928	)	$	(4,718	)	$	(11,512	)
Food ingredients		21,591			18,037			15,145
Corporate and other		(10,604	)		(8,874	)		(8,493	)
	$	10,059		$	4,445		$	(4,860	)
Capital expenditures, net
Industrial ingredients	$	8,700		$	6,625		$	4,713
Food ingredients		5,446			1,663			1,267
Corporate and other		—			7			—
	$	14,146		$	8,295		$	5,980

	August 31,
	2012		2011
	(Dollars in thousands)
Total assets
Industrial ingredients	$	143,039	$	138,412
Food ingredients		63,949		42,252
Corporate and other		29,191		31,750
	$	236,179	$	212,414

In January 2012, the Company acquired, through purchase or capital lease, the net assets and operations of the business generally known as Carolina Starches, which manufactures and markets industrial potato starch based products and blends for the paper and packaging industries. See Note 19. The net assets and results of operations since acquisition have been integrated into the Company’s existing business segments. The acquired net assets, consisting primarily of property, plant and equipment and working capital, are being managed by and included in the reported balance sheet amounts of the Company’s Food Ingredients business, which has experience, expertise and technologies related to the manufacture of potato starch products. Consolidated assets at August 31, 2012 included $11.3 million of assets related to the acquisition.

Since the primary end markets for Carolina Starches’ products are the paper and packaging industries, the Carolina Starches sales and marketing functions of the acquired operations are being managed by the Industrial Ingredients business; therefore, the sales, cost of sales and a majority of the operating expenses are included in the Industrial Ingredients segment’s results of operations in the Consolidated Financial Statements. Sales of $14.7 million related to the acquired Carolina Starches businesses were included in the Industrial Ingredients results of operations. Due to the integration of Carolina Starches into the Company’s two business segments, it is not practicable to determine the net earnings of Carolina Starches included in the consolidated statements of operations since the acquisition.

Reconciliation of income (loss) from operations for the Company's segments to income (loss) before income taxes as reported in the consolidated financial statements follows:

	Year Ended August 31,
	2012			2011			2010
	(Dollars in thousands)
Income (loss) from operations	$	10,059		$	4,445		$	(4,860	)
Interest expense		(8,633	)		(9,364	)		(7,550	)
Other non-operating income (expense)		(6,186	)		115			(1,921	)
Loss from continuing operations before income taxes	$	(4,760	)	$	(4,804	)	$	(14,331	)

Sales, attributed to the area to which the product was shipped, are as follows:

	Year Ended August 31,
	2012		2011		2010
	(Dollars in thousands)
United States	$	328,282	$	288,571	$	231,042
Canada		5,653		4,027		3,738
Mexico		12,761		9,221		6,996
Columbia		6,678		6,802		6,227
Japan		4,380		3,434		1,173
Other		3,609		3,386		5,098
Non-United States		33,081		26,870		23,232
Total	$	361,363	$	315,441	$	254,274