Segment Information

6 Months Ended

Jun. 30, 2019

ASC 280-10-50, “Operating Segments", defines the characteristics of an operating segment as: a) being engaged in business activity from which it may earn revenue and incur expenses, b) being reviewed by the Company's chief operating decision maker (CODM) for decisions about resources to be allocated and assess its performance and c) having discrete financial information. Although we look at our products to analyze the nature of our revenue, other financial information, such as certain costs and expenses, net income and EBITDA are not captured or analyzed by these categories. Our CODM does not make resource allocation decisions or access the performance of the business based on these categories, but rather in the aggregate. Based on this, management believes that it operates in one business segment.

In their analysis of product lines as potential operating segments, management also considered ASC 280-10-50-11, “Aggregation Criteria”, which allows for the aggregation of operating segments if the segments have similar economic characteristics and if the segments are similar in each of the following areas:

•The nature of the products and services;

•The nature of the production processes;

•The type or class of customer for their products and services;

•The methods used to distribute their products or provide their services; and

•The nature of the regulatory environment, if applicable.

We are engaged in the business of designing and manufacturing compressors and flares. Our compressors and flares are sold and rented to our customers. In addition, we provide service and maintenance on compressors in our fleet and to third parties. These business activities are similar in all geographic areas. Our manufacturing process is essentially the same for the entire Company and is performed in-house at our facilities in Midland, Texas and Tulsa, Oklahoma. Our customers primarily consist of entities in the business of producing natural gas and crude oil. The maintenance and service of our products is consistent across the entire Company and is performed via an internal fleet of vehicles. The regulatory environment is similar in every jurisdiction in that the most impacting regulations and practices are the result of federal energy policy. In addition, the economic characteristics of each customer arrangement are similar in that we maintain policies at the corporate level.


For the three months ended June 30, 2019 (in thousands):
	Rental		Sales		Service & Maintenance		Corporate		Total
Revenue	$	13,572	$	5,814	$	509	$	—	$	19,895
Operating costs and corporate expenses	6,359		4,419		159		8,365		19,302
Total other income, net	—		—		—		177		177
Income before provision for income taxes	$	7,213	$	1,395	$	350	$	(8,188)	$	770


For the three months ended June 30, 2018 (in thousands):
	Rental		Sales		Service & Maintenance		Corporate		Total
Revenue	$	11,427	$	6,383	$	394	$	—	$	18,204
Operating costs and corporate expenses	5,195		4,924		101		7,758		17,978
Total other income, net	—		—		—		75		75
Income before provision for income taxes	$	6,232	$	1,459	$	293	$	(7,683)	$	301


For the six months ended June 30, 2019 (in thousands):
	Rental		Sales		Service & Maintenance		Corporate		Total
Revenue	$	26,959	$	9,939	$	988	$	—	$	37,886
Operating costs and expenses	12,244		8,118		306		16,416		37,084
Total other income, net	—		—		—		478		478
Income before provision for income taxes	$	14,715	$	1,821	$	682	$	(15,938)	$	1,280


For the six months ended June 30, 2018 (in thousands:
	Rental		Sales		Service & Maintenance		Corporate		Total
Revenue	$	22,898	$	9,381	$	643	$	—	$	32,922
Operating costs and expenses	9,899		7,115		166		15,166		32,346
Total other expense, net	—		—		—		(1)		(1)
Income before provision for income taxes	$	12,999	$	2,266	$	477	$	(15,167)	$	575