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Discontinued Operations | 12 Months Ended
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Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations During the fourth quarter of 2018, the Company initiated and began executing a strategic plan to sell its Consumer and Industrial Chemistry Technologies (“CICT”) segment. An investment banking advisory services firm was engaged and actively marketed this segment. The Company met all of the criteria to classify the CICT segment’s assets and liabilities as held for sale in the fourth quarter 2018. The Company has classified the assets, liabilities, and results of operations for this segment as “Discontinued Operations” for all periods presented. Disposal of the CICT reporting segment represented a strategic shift that will have a major effect on the Company’s operations and financial results. On January 10, 2019, the Company entered into a Share Purchase Agreement with Archer-Daniels-Midland Company (“ADM”) for the sale of all of the shares representing membership interests in its wholly owned subsidiary, Florida Chemical Company, LLC, which represented the CICT segment. Effective February 28, 2019, the Company completed the sale of the CICT segment to ADM for $175.0 million in cash consideration, with $4.4 million temporarily held in escrow by ADM for post-closing working capital adjustments for up to 90 days and $13.1 million temporarily held in escrow to satisfy potential indemnification claims by ADM with anticipated releases at 6 months, 12 months, and 15 months. As of December 31, 2019, the escrow balance including interest was $9.9 million reflected in other current assets. Concurrent with the closing of the sale of the CICT segment, the Company retained $11.1 million of historical inventory previously held by the CICT segment. In addition, the Company executed a long-term supply agreement for terpene. The term of the agreement runs through December 2023, with an option to extend for an additional year. The remaining minimum commitment of the agreement at December 31, 2019 is $72 million. Pursuant to the post-closing working capital dispute resolution procedures set forth in the Share Purchase Agreement, the Company and ADM engaged a neutral third party arbitrator to help reach agreement on the final post-closing working capital adjustment. In February 2020, the third party arbitrator ruled in favor of awarding ADM for the entire $4.1 million disputed amount resulting in a reduction to the gain on the sale of the business as of December 31, 2019. The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the years ended December 31, 2019, 2018, and 2017 (in thousands):
| Consumer and Industrial Chemistry Technologies
| 2019 |  | 2018 |  | 2017
Discontinued operations: |  |  |  |  |
Revenue | $ | 11,031 |  |  | $ | 72,344 |  |  | $ | 73,992 |
Operating expenses | (11,572 | ) |  | (65,940 | ) |  | (63,621 | )
Depreciation and amortization | — |  |  | (2,760 | ) |  | (2,391 | )
Research and development | (69 | ) |  | (590 | ) |  | (515 | )
Income from operations | (610 | ) |  | 3,054 |  |  | 7,465 |
Other income (expense) | 35 |  |  | 341 |  |  | (284 | )
Gain on sale of businesses | 64,160 |  |  | — |  |  | — |
Income before income taxes | 63,585 |  |  | 3,395 |  |  | 7,181 |
Income tax expense | (19,129 | ) |  | (652 | ) |  | (2,730 | )
Net income (loss) from discontinued operations | $ | 44,456 |  |  | $ | 2,743 |  |  | $ | 4,451 |
The assets and liabilities held for sale on the Consolidated Balance Sheets as of December 31, 2019 and 2018 are as follows (in thousands):
| Consumer and Industrial Chemistry Technologies
| 2019 |  | 2018
Assets: |  |  |
Accounts receivable, net | $ | — |  |  | $ | 10,547 |
Inventories, net | — |  |  | 52,069 |
Other current assets | — |  |  | 446 |
Property and equipment, net | — |  |  | 15,899 |
Goodwill | — |  |  | 19,480 |
Other intangible assets, net | — |  |  | 20,029 |
Assets held for sale | — |  |  | 118,470 |
Liabilities: |  |  |
Accounts payable | $ | — |  |  | $ | 8,883 |
Accrued liabilities | — |  |  | 291 |
Liabilities held for sale | $ | — |  |  | $ | 9,174 |
During the fourth quarter of 2016, the Company initiated a strategic restructuring of its business to enable a greater focus on its core businesses in energy chemistry and consumer and industrial chemistry. The Company executed a plan to sell or otherwise dispose of the Drilling Technologies and Production Technologies segments. An investment banking advisory services firm was engaged and actively marketed these segments. The Company met all of the criteria to classify the Drilling Technologies and Production Technologies segments’ assets and liabilities as held for sale in the fourth quarter 2016. The Company has classified the assets, liabilities, and results of operations for these two segments as “Discontinued Operations” for all periods presented. Disposal of the Drilling Technologies and Production Technologies reporting segments represented a strategic shift that would have a major effect on the Company’s operations and financial results. On May 22, 2017, the Company completed the sale of substantially all of the assets and transfer of certain specified liabilities and obligations of the Company’s Drilling Technologies segment to National Oilwell Varco, L.P. (“NOV”) for $17.0 million in cash consideration, subject to normal working capital adjustments, with $1.5 million held back by NOV for up to 18 months to satisfy potential indemnification claims. On May 23, 2017, the Company completed the sale of substantially all of the assets and transfer of certain specified liabilities and obligations of the Company’s Production Technologies segment to Raptor Lift Solutions, LLC (“Raptor Lift”) for $2.9 million in cash consideration, with $0.4 million held back by Raptor Lift to satisfy potential indemnification claims. On August 16, 2017, the Company completed the sale of substantially all of the remaining assets of the Company’s Drilling Technologies segment to Galleon Mining Tools, Inc. for $1.0 million in cash consideration and a note receivable of $1.0 million due in one year. The sale or disposal of the assets and transfer or liquidation of liabilities and obligations of these segments was completed in 2017. The Company has no continuing involvement with the discontinued operations. The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the years ended December 31, 2018 and 2017 (in thousands):
| Drilling Technologies |  | Production Technologies
| 2018 |  | 2017 |  |  | 2018 |  | 2017 |
Discontinued operations: |  |  |  |  |  |  |  |  |
Revenue | $ | — |  |  | $ | 11,534 |  |  |  | $ | — |  |  | $ | 4,002 |  |
Cost of revenue | — |  |  | (7,309 | ) |  |  | — |  |  | (3,236 | ) |
Selling, general and administrative | — |  |  | (6,963 | ) |  |  | — |  |  | (1,759 | ) |
Research and development | — |  |  | (5 | ) |  |  | — |  |  | (364 | ) |
Gain (loss) on disposal of long-lived assets | — |  |  | 97 |  |  |  | — |  |  | — |  |
Loss from operations | — |  |  | (2,646 | ) |  |  | — |  |  | (1,357 | ) |
Other expense | — |  |  | (96 | ) |  |  | — |  |  | (52 | ) |
Loss on sale of businesses | — |  |  | (1,600 | ) |  |  | — |  |  | (479 | ) |
Loss on write-down of assets held for sale | — |  |  | (6,831 | ) |  |  | — |  |  | (9,718 | ) |
Loss before income taxes | — |  |  | (11,173 | ) |  |  | — |  |  | (11,606 | ) |
Income tax benefit | — |  |  | 4,138 |  |  |  | — |  |  | 4,299 |  |
Net loss from discontinued operations | $ | — |  |  | $ | (7,035 | ) |  |  | $ | — |  |  | $ | (7,307 | ) |
At December 31, 2017, all remaining assets and liabilities of the discontinued operations were assumed by the Company’s continuing operations. These balances included $0.3 million of net accounts receivable, $1.4 million of sales price hold-back that was received during 2018, and $1.4 million of accrued liabilities partially settled in 2018, with the remainder to be settled in 2019.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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