17.

Business Segment Information

Effective January 1, 2014, the Company implemented an internal reorganization related to the integration of recent acquisitions, which resulted in three reportable segments, defined as follows:

Air Pollution Control Segment

Our Air Pollution Control Segment is comprised of Adwest Technologies, Inc., Duall Air and Odor Technologies, Busch International, Buell Energy Cyclones, Flex-Kleen Dust Collection Technologies, Fisher-Klosterman, Inc., Kirk & Blum, KB Duct, SAT Technology, Inc. and HEE Environmental Engineering. This segment provides the design and manufacture of product recovery and air pollution control technologies that enable our customers to meet compliance targets for toxic emissions, fumes, volatile organic compounds, process and industrial odors. These products and solutions include chemical and biological scrubbers, fabric filters and cartridge collectors, thermal and catalytic oxidation systems, cyclones, separators, gas absorbers and industrial ventilation systems. This segment also provides component parts for industrial air systems and provides cost effective alternatives to traditional duct components, as well as custom metal engineered fabrication services. These products and services are applicable to a wide variety of industries.

Energy Segment

Our Energy Segment is comprised of Aarding Thermal Acoustics, Effox-Flextor and AVC Specialists, Inc. This segment provides the design and manufacture of technologies for flue gas and diverter dampers, non-metallic expansion joints, natural gas turbine exhaust systems, and silencer and precipitator applications, primarily for coal-fired and natural gas power plants, refining, oil production and petrochemical processing, as well as a variety of other industries.

Fluid Handling and Filtration Segment

Our Fluid Handling and Filtration Segment is comprised of Met-Pro Global Pump Solutions, Mefiag Filtration Solutions, Keystone Filtration Solutions, CECO Filters and Strobic Air Corporation. This segment provides the design and manufacture of technologies including high quality centrifugal pumps for corrosive, abrasive and high temperature liquids, filter products for air and liquid filtration, as well as product recovery equipment, and technologically advanced air movement and exhaust systems. These products are applicable to a wide variety of industries, particularly the aquarium/aquaculture, plating and metal finishing, food and beverage, chemical/petrochemical, wastewater treatment, desalination and pharmaceutical markets.

The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies. Interest income and expense are not included in the measure of segment profit reviewed by management. Income taxes are also not included in the measure of segment operating profit reviewed by management. The operating results of the segments are reviewed through to the “Income (loss) from operations” line on the condensed consolidated statements of income (loss).

The financial segment information is presented in the following table:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014			2013
Net Sales (less intra-, inter-segment sales)
Air Pollution Control Segment	$	27,709	$	23,441	$	87,396		$	68,030
Energy Segment		17,977		19,243		50,093			50,262
Fluid Handling Filtration Segment		17,584		6,895		49,729			9,785
Corporate and Other⁽¹⁾		30		217		(107	)		513

Net sales	$	63,300	$	49,796	$	187,111		$	128,590

(1)	Includes adjustment for revenue on intercompany jobs.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Income (Loss) from Operations
Air Pollution Control Segment	$	3,315		$	2,661		$	12,057		$	9,811
Energy Segment		1,850			1,885			5,833			6,855
Fluid Handling Filtration Segment		4,347			630			10,087			1,071
Corporate and Other⁽²⁾		(3,944	)		(7,893	)		(8,900	)		(13,602	)
Eliminations		(323	)		(639	)		(1,152	)		(846	)

Net operating income (loss)	$	5,245		$	(3,356	)	$	17,925		$	3,289

(2)	Includes corporate compensation, professional services, information technology, acquisition and integration expenses, and other general and administrative corporate expenses.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Property and Equipment Additions
Air Pollution Control Segment	$	59	$	66	$	327	$	160
Energy Segment		5		231		72		373
Fluid Handling Filtration Segment		26		—		359		—
Corporate and Other		—		—		43		—

Property and equipment additions	$	90	$	297	$	801	$	533


	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Depreciation and Amortization
Air Pollution Control Segment	$	508	$	295	$	1,286	$	793
Energy Segment		561		782		1,780		1,515
Fluid Handling Filtration Segment		1,614		771		4,939		787
Corporate and Other		31		40		98		106

Depreciation and Amortization	$	2,714	$	1,888	$	8,103	$	3,201


	September 30, 2014		December 31, 2013
Identifiable Assets
Air Pollution Control Segment	$	86,858	$	74,556
Energy Segment		67,598		76,960
Fluid Handling Filtration Segment		177,393		185,646
Corporate and Other⁽³⁾		18,703		11,374

Identifiable Assets	$	350,552	$	348,536

(3)	Corporate assets primarily consist of cash and income tax related assets.


	September 30, 2014		December 31, 2013
Goodwill
Air Pollution Control Segment	$	32,890	$	21,690
Energy Segment		14,230		14,962
Fluid Handling Filtration Segment		97,147		95,568

Goodwill	$	144,267	$	132,220

Intra-segment and Inter-segment Revenues

The Company has multiple divisions that sell to each other within segments (intra-segment sales) and between segments (inter-segment sales) as indicated in the following tables:


	Three Months Ended September 30, 2014
						Less Inter-Segment Sales
	Total Sales		Intra- Segment Sales			APC			Energy			FHF			Corp and Other		Net Sales to Outside Customers
Net Sales
Air Pollution Control Segment	$	29,920	$	(1,634	)	$	—		$	(444	)	$	(133	)	$	—	$	27,709
Energy Segment		19,193		(1,200	)		(16	)		—			—			—		17,977
Fluid Handling Filtration Segment		18,176		(564	)		(28	)		—			—			—		17,584
Corporate and Other⁽⁴⁾		—		—			—			—			—			30		30

Net Sales	$	67,289	$	(3,398	)	$	(44	)	$	(444	)	$	(133	)	$	30	$	63,300


	Three Months Ended September 30, 2013
						Less Inter-Segment Sales
	Total Sales		Intra- Segment Sales			APC			Energy			FHF		Corp and Other			Net Sales to Outside Customers
Net Sales
Air Pollution Control Segment	$	24,858	$	(1,206	)	$	—		$	(211	)	$	—	$	—		$	23,441
Energy Segment		20,212		(839	)		(130	)		—			—		—			19,243
Fluid Handling Filtration Segment		7,208		(200	)		(113	)		—			—		—			6,895
Corporate and Other⁽⁴⁾		416		—			—			—			—		(199	)		217

Net Sales	$	52,694	$	(2,245	)	$	(243	)	$	(211	)	$	—	$	(199	)	$	49,796


	Nine Months Ended September 30, 2014
						Less Inter-Segment Sales
	Total Sales		Intra- Segment Sales			APC			Energy			FHF			Corp and Other			Net Sales to Outside Customers
Net Sales
Air Pollution Control Segment	$	93,580	$	(5,124	)	$	—		$	(766	)	$	(294	)	$	—		$	87,396
Energy Segment		53,503		(3,393	)		(17	)		—			—			—			50,093
Fluid Handling Filtration Segment		51,111		(1,311	)		(71	)		—			—			—			49,729
Corporate and Other⁽⁴⁾		—		—			—			—			—			(107	)		(107	)

Net Sales	$	198,194	$	(9,828	)	$	(88	)	$	(766	)	$	(294	)	$	(107	)	$	187,111


	Nine Months Ended September 30, 2013
						Less Inter-Segment Sales
	Total Sales		Intra- Segment Sales			APC			Energy			FHF			Corp and Other		Net Sales to Outside Customers
Net Sales
Air Pollution Control Segment	$	73,579	$	(4,911	)	$	—		$	(239	)	$	(399	)	$	—	$	68,030
Energy Segment		51,933		(1,539	)		(132	)		—			—			—		50,262
Fluid Handling Filtration Segment		10,119		(200	)		(134	)		—			—			—		9,785
Corporate and Other⁽⁴⁾		416		—			—			—			—			97		513

Net Sales	$	136,047	$	(6,650	)	$	(266	)	$	(239	)	$	(399	)	$	97	$	128,590

⁽⁴⁾	Includes adjustment for revenue on intercompany jobs.