SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2019

Human Nutrition & Health

The Company's Human Nutrition & Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for wellness applications. Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function. The Company's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Proprietary technology has been combined to create an organic molecule in a form the body can readily assimilate. Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customer perceptions of brand value. Consequently, the Company makes investments in such activities for long-term value differentiation. This segment also serves the food and beverage industry for beverage, bakery, dairy, confectionary, and savory manufacturers. The Company partners with our customers from ideation through commercialization to bring on-trend beverages, baked goods, confections, dairy and meat products to market. The Company's expertise in trends analysis and product development, combined with manufacturing capabilities in customized spray dried and emulsified powders, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, as well as ice cream bases and variegates makes the Company a one-stop solutions provider for beverage and dairy product development needs. Additionally, this segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, and nutritional supplements. The Company also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients.

Animal Nutrition & Health

The Company’s Animal Nutrition & Health (“ANH”) segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, the Company’s microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels. The Company’s proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world. ANH also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, predominantly to the poultry, pet and swine industries. Choline, which is manufactured and sold in both dry and aqueous forms, plays a vital role in the metabolism of fat. In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity.

Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products. Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service. The Company continues to drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace.

Specialty Products

Ethylene oxide, at the 100% level and blended with carbon dioxide, is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. The Company’s 100% ethylene oxide product and blends are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to. The Company’s inventory of these specially built drums and cylinders, along with its four filling facilities, represents a significant capital investment. Contract sterilizers and medical device manufacturers are principal customers for this product. The Company also sells single use canisters with 100% ethylene oxide for

use in sterilizing re-usable devices typically processed in autoclave units in hospitals. As a fumigant, ethylene oxide blends are highly effective in killing bacteria, fungi, and insects in spices and other seasoning materials.

The Company also distributes a number of other gases for various uses, most notably propylene oxide and ammonia. Propylene oxide is marketed and sold in the U.S. as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes. The Company distributes its propylene oxide product in the U.S. primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the EPA and the DOT. Propylene oxide is also sold worldwide to customers in approved reusable and recyclable drum and cylinder packaging for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder drum and cylinder packaging approved for use in the countries these products are shipped to. The Company's inventory of cylinders for these products also represents a significant capital investment.

The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily into high value crops. The Company has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life. First, the Company determines optimal mineral balance for plant health. The Company then has a foliar applied Metalosate product range, utilizing patented amino acid chelate technology. Its products quickly and efficiently deliver mineral nutrients. As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances.

Industrial Products

Certain derivatives of choline chloride are manufactured and sold into industrial applications predominately as a component for hydraulic fracturing of shale natural gas wells. The Company’s products offer an attractive, effective and more environmentally responsible alternative than other clay stabilizers. Industrial grade choline bicarbonate is completely chloride free and the Company's choline chloride reduces the amount of chlorides released into the environment up to 75% when compared to potassium chloride. The Industrial Products segment also includes the manufacture and sale of methylamines. Methylamines are a primary building block for the manufacture of choline products and are produced at its Italian operation and sold for a wide range of industrial applications in Europe.

The segment information is summarized as follows:

Business Segment Assets



	June 30, 2019		December 31, 2018
Human Nutrition & Health	$	704,871	$	702,692
Animal Nutrition & Health	132,992		136,810
Specialty Products	193,659		59,558
Industrial Products	21,920		22,822
Other Unallocated ⁽¹⁾	44,878		59,473
Total	$	1,098,320	$	981,355

⁽¹⁾ Other unallocated assets consist of certain cash, deferred financing costs, other assets, investments, and deferred income taxes, which the Company does not allocate to its individual business segments.

Business Segment Net Sales



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Human Nutrition & Health	$	85,872	$	85,013	$	171,021	$	168,076
Animal Nutrition & Health	43,480		42,036		86,841		88,177
Specialty Products	24,907		22,864		43,331		40,604
Industrial Products	7,295		13,774		17,390		28,240
Total	$	161,554	$	163,687	$	318,583	$	325,097

Business Segment Earnings Before Income Taxes



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Human Nutrition & Health	$	12,338		$	9,685		$	26,041		$	22,617
Animal Nutrition & Health	5,045			7,023			10,301			14,507
Specialty Products	8,879			8,675			15,576			13,709
Industrial Products	911			2,613			2,548			5,092
Transaction and integration costs, ERP implementation costs, and unallocated legal fees ⁽²⁾	(761		)	(893		)	(1,565		)	(1,582		)
Unallocated amortization expense ⁽³⁾	(10		)	—			(19		)	—
Interest and other (expense)	(1,521		)	(2,042		)	(3,208		)	(4,105		)
Total	$	24,881		$	25,061		$	49,674		$	50,238

⁽²⁾ Transaction and integration costs and unallocated legal fees for three and six month ended June 30, 2019 and 2018, respectively, were primarily related to acquisitions. ERP implementation costs for the three and six months ended June 30, 2019 and 2018 were related to a project in connection with a company-wide ERP system implementation.
⁽³⁾ Unallocated amortization expense for three and six months ended June 30, 2019 was related to amortization of an intangible asset in connection with a company-wide ERP system implementation.

Depreciation/Amortization



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Human Nutrition & Health	$	7,483	$	8,384	$	15,469	$	16,916
Animal Nutrition & Health	1,623		1,294		3,201		2,599
Specialty Products	1,590		1,010		2,611		2,020
Industrial Products	119		180		290		351
Unallocated amortization expense	10		—		19		—
Total	$	10,825	$	10,868	$	21,590	$	21,886

Capital Expenditures



	Six Months Ended June 30,
	2019		2018
Human Nutrition & Health	$	9,927	$	4,091
Animal Nutrition & Health	2,216		1,763
Specialty Products	2,164		1,202
Industrial Products	381		644
Total	$	14,688	$	7,700