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SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 2017
SEGMENT INFORMATION [Abstract] |
SEGMENT INFORMATION | NOTE 11 – SEGMENT INFORMATION Human Nutrition & Health Our Human Nutrition & Health segment supplies ingredients in the food and beverage industry, providing customized solutions in powder, solid and liquid flavor delivery systems, spray dried emulsified powder systems, and cereal systems. Our products include creamer systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice & dairy bases, chocolate systems, ice cream bases & variegates, ready-to-eat cereals, grain based snacks, and cereal based ingredients. Additionally, we provide 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. We also produce and market 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. Our mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Science and patented technology have been combined to create an organic molecule in a form the body can readily assimilate. Animal Nutrition & Health Our Animal Nutrition & Health (“ANH”) segment provides nutritional products derived from our microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, our microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels. Our 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. Choline deficiency can result in reduced growth and perosis in poultry, and fatty liver, kidney necrosis and general poor health condition in swine. Sales of specialty products for the animal nutrition and health industry are highly dependent on dairy industry economics as well as the ability of the Company to leverage the results of university and field research on the animal health benefits of the Company’s 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 increase 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, 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. Our 100% ethylene oxide product is distributed in uniquely designed, recyclable, double-walled, stainless steel drums to assure compliance with safety, quality and environmental standards as outlined by the EPA and the DOT. Our inventory of these specially built drums, along with our two filling facilities, represents a significant capital investment. Contract sterilizers and medical device manufacturers are principal customers for this product. We also sell 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. Propylene oxide is marketed and sold 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. We distribute our propylene oxide product primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the EPA and the DOT. Our inventory of these cylinders also represents a significant capital investment. Propylene oxide is also sold to customers seeking smaller (as opposed to bulk) quantities and whose requirements include utilization in various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Our micronutrient agricultural nutrition business sells chelated minerals primarily into high value crops. We have a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life. First, we determine optimal mineral balance for plant health. We then have a foliar applied Metalosate product range, utilizing patented amino acid chelate technology. Our 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. Our products offer an attractive, effective and more environmentally responsible alternative than other clay stabilizers. Industrial grade choline bicarbonate is completely chloride free and our 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 our Italian operation and sold for a wide range of industrial applications in Europe. Business Segment Assets:
|  | September 30, 2017 |  |  | December 31, 2016 |
Human Nutrition & Health |  | $ | 719,880 |  |  | $ | 709,337 |
Animal Nutrition & Health |  |  | 115,942 |  |  |  | 121,860 |
Specialty Products |  |  | 63,178 |  |  |  | 64,030 |
Industrial Products |  |  | 14,749 |  |  |  | 10,477 |
Other Unallocated |  |  | 45,089 |  |  |  | 42,922 |
Total |  | $ | 958,838 |  |  | $ | 948,626 |
Depreciation/Amortization:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Human Nutrition & Health |  | $ | 8,462 |  |  | $ | 8,578 |  |  | $ | 24,773 |  |  | $ | 25,172 |
Animal Nutrition & Health |  |  | 1,296 |  |  |  | 1,837 |  |  |  | 4,330 |  |  |  | 5,515 |
Specialty Products |  |  | 1,028 |  |  |  | 982 |  |  |  | 3,067 |  |  |  | 2,777 |
Industrial Products |  |  | 187 |  |  |  | 186 |  |  |  | 640 |  |  |  | 521 |
Total |  | $ | 10,973 |  |  | $ | 11,583 |  |  | $ | 32,810 |  |  | $ | 33,985 |
Capital Expenditures:
|  | Nine Months Ended September 30, |
|  | 2017 |  |  | 2016 |
Human Nutrition & Health |  | $ | 13,290 |  |  | $ | 11,780 |
Animal Nutrition & Health |  |  | 2,585 |  |  |  | 5,442 |
Specialty Products |  |  | 852 |  |  |  | 1,060 |
Industrial Products |  |  | 949 |  |  |  | 519 |
Total |  | $ | 17,676 |  |  | $ | 18,801 |
Business Segment Net Sales:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Human Nutrition & Health |  | $ | 81,365 |  |  | $ | 74,926 |  |  | $ | 232,523 |  |  | $ | 221,281 |
Animal Nutrition & Health |  |  | 38,010 |  |  |  | 40,935 |  |  |  | 113,136 |  |  |  | 118,579 |
Specialty Products |  |  | 17,264 |  |  |  | 16,477 |  |  |  | 56,813 |  |  |  | 53,919 |
Industrial Products |  |  | 14,077 |  |  |  | 6,171 |  |  |  | 33,054 |  |  |  | 18,665 |
Total |  | $ | 150,716 |  |  |  | 138,509 |  |  | $ | 435,526 |  |  | $ | 412,444 |
Business Segment Earnings Before Income Taxes:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Human Nutrition & Health |  | $ | 10,426 |  |  | $ | 10,460 |  |  | $ | 31,942 |  |  | $ | 27,856 |
Animal Nutrition & Health |  |  | 5,154 |  |  |  | 6,784 |  |  |  | 14,219 |  |  |  | 20,623 |
Specialty Products |  |  | 5,607 |  |  |  | 5,237 |  |  |  | 20,125 |  |  |  | 17,541 |
Industrial Products |  |  | 2,096 |  |  |  | 527 |  |  |  | 4,397 |  |  |  | 1,019 |
Transaction, integration costs, and legal settlement |  |  | (228 | ) |  |  | (62 | ) |  |  | (2,181 | ) |  |  | (792 | )
Indemnification settlement |  |  | - |  |  |  | - |  |  |  | 2,087 |  |  |  | - |
Interest and other income (expense) |  |  | (2,358 | ) |  |  | (2,175 | ) |  |  | (6,623 | ) |  |  | (6,112 | )
Total |  | $ | 20,697 |  |  | $ | 20,771 |  |  | $ | 63,966 |  |  | $ | 60,135 |
Transaction and integration costs were primarily related to the aforementioned definitive agreements (see Note 2). Indemnification settlement is related to the acquisition of Performance Chemicals & Ingredients Company (d/b/a SensoryEffects). The following table summarizes domestic (U.S.) and foreign sales for the three and nine months ended September 30, 2017 and 2016:
|  | Three Months Ended Sepember 30, |  |  | Nine Months Ended September 30, |
|  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Domestic |  | $ | 116,771 |  |  | $ | 105,093 |  |  | $ | 336,298 |  |  | $ | 314,644 |
Foreign |  |  | 33,945 |  |  |  | 33,416 |  |  |  | 99,228 |  |  |  | 97,800 |
Total |  | $ | 150,716 |  |  | $ | 138,509 |  |  | $ | 435,526 |  |  | $ | 412,444 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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