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BUSINESS SEGMENTS
9 Months Ended
Sep. 30, 2011
BUSINESS SEGMENTS
NOTE 15 – BUSINESS SEGMENTS

The Company has three reportable segments:  bromine, crude salt and chemical products. The reportable segments are consistent with how management views the markets served by the Company and the financial information that is reviewed by its chief operating decision maker. The Company manages its sensors and controls businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes share-based compensation expense, certain corporate costs and other income not associated with the operations of the segment. These corporate costs (income) are separately stated below and also include costs that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit. The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of its segments.
 
Three-Month Period
Ended
September 30, 2011
  
Bromine *
    
Crude
 Salt *
    
Chemical
 Products
    
Segment
 Total
    
Corporate
    
Total
  
Net revenue (external customers)
  
$
24,820,194
    
$
2,455,307
    
$
10,486,474
    
$
37,761,975
    
$
-
    
$
37,761,975
  
Net revenue (intersegment)
    
717,251
      
-
      
-
      
717,251
      
-
      
717,251
  
Income (loss) from operations before taxes
    
9,408,923
      
1,317,015
      
2,661,362
      
13,387,300
      
(4,641,055
)
    
8,746,245
  
Income taxes
    
2,290,082
      
230,105
      
659,359
      
3,179,546
      
-
      
3,179,546
  
Income (loss) from operations after taxes
    
7,118,841
      
1,086,910
      
2,002,003
      
10,207,754
      
(4,641,055
)
    
5,566,699
  
Total assets
    
165,546,613
      
45,291,380
      
45,346,872
      
256,184,865
      
2,594,619
      
258,779,484
  
Depreciation and amortization
    
3,287,677
      
1,161,077
      
625,809
      
5,074,563
      
-
      
5,074,563
  
Capital expenditures
    
573,820
      
57,657
      
153,426
      
784,903
      
-
      
784,903
  
Write-off / Impairment 
    
-
      
-
      
-
      
-
      
-
      
-
  
 
Three-Month Period
Ended
September 30, 2010
  
 
Bromine *
    
Crude
Salt *
    
Chemical
Products
    
Segment
Total
    
 
Corporate
    
 
Total
  
Net revenue
(external customers)
   $ 28,180,884     $ 4,579,876     $ 11,997,534     $ 44,758,294     $ -     $ 44,758,294  
Net revenue
(intersegment)
     1,177,850       -       -       1,177,850       -       1,177,850  
Income (loss) from operations before taxes
     13,901,242       3,265,430       3,206,300       20,372,972       (464,253 )     19,908,719  
Income taxes
     3,547,794       756,857       805,655       5,110,306       -       5,110,306  
Income (loss) from operations after taxes
     10,353,448       2,508,573       2,400,645       15,262,666       (464,253 )     14,798,413  
Total assets
     124,765,055       31,989,512       37,408,781       194,163,348       106,978       194,270,326  
Depreciation and amortization
     1,952,001       403,729       693,046       3,048,776       -       3,048,776  
Capital expenditures
     5,451,211       1,124,423       -       6,575,634       -       6,575,634  
 
Nine-Month
Period Ended
September 30, 2011
  
Bromine *
    
Crude
Salt *
    
Chemical
Products
    
Segment
Total
    
 
Corporate
    
 
Total
  
Net revenue (external customers)
   $ 88,200,156     $ 13,484,025     $ 32,757,138     $ 134,441,319     $ -     $ 134,441,319  
Net revenue (intersegment)
     2,221,117       -       -       2,221,117       -       2,221,117  
Income (loss) from operations before taxes
     35,322,297       7,190,560       8,047,059       50,559,916       (8,160,769 )     42,399,147  
Income taxes
     9,032,235       1,423,022       2,009,756       12,465,013       -       12,465,013  
Income (loss) from operations after taxes
     26,290,062       5,767,538       6,037,303       38,094,903       (8,160,769 )     29,934,134  
Total assets
     165,546,613       45,291,380       45,346,872       256,184,865       2,594,619       258,779,484  
Depreciation and amortization
     8,301,833       2,259,754       1,981,592       12,543,179       -       12,543,179  
Capital expenditures
     32,222,899       16,243,142       191,090       48,657,131       -       48,657,131  
Write-off / Impairment
     3,749,435       2,015,533       1,805,598       7,570,566       -       7,570,566  
 
Nine-Month
Period Ended
September 30, 2010
  
 
Bromine *
    
Crude
Salt *
    
Chemical
Products
    
Segment
Total
    
 
Corporate
    
 
Total
  
Net revenue
(external customers)
   $ 76,183,791     $ 11,457,497     $ 33,562,233     $ 121,203,521     $ -     $ 121,203,521  
Net revenue
(intersegment)
     2,803,882       -       -       2,803,882       -       2,803,882  
Income (loss) from operations before taxes
     36,751,337       8,241,849       9,959,587       54,952,773       (2,089,424 )     52,863,349  
Income taxes
     9,605,196       1,653,622       2,500,895       13,759,713       -       13,759,713  
Income (loss) from operations after taxes
     27,146,141       6,588,227       7,458,692       41,193,060       (2,089,424 )     39,103,636  
Total assets
     124,765,055       31,989,512       37,408,781       194,163,348       106,978       194,270,326  
Depreciation and amortization
     5,407,728       923,334       1,536,506       7,867,568       -       7,867,568  
Capital expenditures
     15,662,259       5,338,431       7,483,230       28,483,920       -       28,483,920  
 
* Certain common production overheads, operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in SCHC were split by reference to the average selling price and production volume of respective segment.
 
   
Three-Month Period
    
Nine-Month Period
  
   
Ended September 30,
    
Ended September 30
  
Reconciliations
  
2011
    
2010
    
2011
    
2010
  
                         
Total segment operating income
   $ 13,387,300     $ 20,372,972     $ 50,559,916     $ 54,952,773  
Corporate costs
     (4,641,055 )     (464,253 )     (8,160,769 )     (2,089,424 )
Income from operations
     8,746,245       19,908,719       42,399,147       52,863,349  
Other income
     17,647       66,689       38,466       180,047  
Income before taxes
   $ 8,763,892     $ 19,975,408     $ 42,437,613     $ 53,043,396  
 
The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2011.

 
 
Number
  
 
 
Customer
  
Bromine
(000’s)
    
Crude Salt
(000’s)
    
Chemical
Products
(000’s)
    
Total
Revenue
(000’s)
    
Percentage of
Total
Revenue (%)
  
1
  
Shandong Morui Chemical
Company Limited
   $ 2,713     $ 554     $ 590     $ 3,857       10.2 %
TOTAL
       $ 2,713     $ 554     $ 590     $ 3,857       10.2 %

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2011.

 
 
Number
  
 
 
Customer
  
Bromine
(000’s)
    
Crude Salt
(000’s)
    
Chemical
Products
(000’s)
    
Total
Revenue
(000’s)
    
Percentage of
Total
Revenue (%)
  
 1
  
Shandong Morui Chemical
Company Limited
   $ 11,951     $ 2,517     $ 1,919     $ 16,387       12.2 %
 2
  
Shouguang City Rongyuan Chemical Company Limited
   $ 10,320     $ 3,203     $ -     $ 13,523       10.1 %
TOTAL
       $ 22,271     $ 5,720     $ 1,919     $ 29,910       22.3 %

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2010.
 
 
 
Number
  
 
 
Customer
  
Bromine
(000’s)
    
Crude Salt
(000’s)
    
Chemical
Products
(000’s)
    
Total
Revenue
(000’s)
    
Percentage of
Total
Revenue (%)
  
 1
  
Shouguang City Rongyuan
Chemical Company Limited
   $ 3,379     $ 1,108     $ -     $ 4,487       10.0 %
TOTAL
       $ 3,379     $ 1,108     $ -     $ 4,487       10.0 %

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2010.

Number
  
Customer
  
Bromine
(000’s)
    
Crude Salt
(000’s)
    
Chemical
Products
(000’s)
    
Total
Revenue
(000’s)
    
Percentage of
Total
Revenue (%)
  
 1
  
Shouguang City Rongyuan
Chemical Company Limited
   $ 10,091     $ 2,654     $ -     $ 12,745       10.5 %
TOTAL
       $ 10,091     $ 2,654     $ -     $ 12,745       10.5 %