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BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 2012
BUSINESS SEGMENTS

NOTE 14 – 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 June 30, 2012		   Bromine*     Crude
Salt*		     Chemical
Products		     Segment
Total		     Corporate     Total  
Net revenue (external customers)   $ 17,539,429     $ 3,779,658     $ 9,995,759     $ 31,314,846     $ -     $ 31,314,846  
Net revenue (intersegment)     808,596       -       -       808,596       -       808,596  
Income (loss) from operations before taxes     3,933,561       888,555       3,007,381       7,829,497       (196,294 )     7,633,203  
Income taxes     1,018,311       198,783       758,095       1,975,189       -       1,975,189  
Income (loss) from operations after taxes     2,915,250       689,772       2,249,286       5,854,308       (196,294 )     5,658,014  
Total assets     158,305,734       56,621,811       50,634,822       265,562,367       425,477       265,987,844  
Depreciation and amortization     3,509,790       1,442,179       655,456       5,607,425       -       5,607,425  
Capital expenditures     6567,296       1,281,991       -       7,849,287       -       7,849,287  
Write-off / Impairment     763,043       148,952       -       911,995       -       911,995  

 

Three-Month Period
Ended June 30, 2011		   Bromine*     Crude
Salt*		     Chemical
Products		     Segment
Total		     Corporate     Total  
Net revenue (external customers)   $ 33,230,646     $ 5,994,384     $ 12,075,782     $ 51,300,812     $ -     $ 51,300,812  
Net revenue (intersegment)     883,150       -       -       883,150       -       883,150  
Income (loss) from operations before taxes     9,540,474       1,926,628       2,029,160       13,496,262       (107,653 )     13,388,609  
Income taxes     2,466,262       379,478       506,605       3,352,345       -       3,352,345  
Income (loss) from operations after taxes     7,074,212       1,547,150       1,522,555       10,143,917       (107,653 )     10,036,264  
Total assets     146,989,573       52,795,615       42,676,361       242,461,549       3,013,131       245,474,680  
Depreciation and amortization     2,859,567       578,359       682,171       4,120,097       -       4,120,097  
Capital expenditures     21,371,074       15,667,471       37,664       37,076,209       -       37,076,209  
Write-off / Impairment     3,749,435       2,015,533       1,805,598       7,570,566       -       7,570,566  

  

Six-Month Period
Ended June 30, 2012		   Bromine*     Crude
Salt*		     Chemical
Products		     Segment
Total		     Corporate     Total  
Net revenue (external customers)   $ 30,993,311     $ 6,054,582     $ 18,075,627     $ 55,123,520     $ -     $ 55,123,520  
Net revenue (intersegment)     1,563,153       -       -       1,563,153       -       1,563,153  
Income (loss) from operations before taxes     6,401,865       1,437,005       5,250,276       13,089,146       (878,844 )     12,210,302  
Income taxes     1,681,209       302,649       1,325,801       3,309,659       -       3,309,659  
Income (loss) from operations after taxes     4,720,656       1,134,356       3,924,475       9,779,487       (878,844 )     8,900,643  
Total assets     158,305,734       56,621,811       50,634,822       265,562,367       425,477       265,987,844  
Depreciation and amortization     7,174,033       2,805,685       1,310,870       11,290,588       -       11,290,588  
Capital expenditures     6567,296       1,281,991       -       7,849,287       -       7,849,287  
Write-off / Impairment     763,043       148,952       -       911,995       -       911,995  

 

Six-Month Period
Ended June 30, 2011		   Bromine*     Crude
Salt*		     Chemical
Products		     Segment
Total		     Corporate     Total  
Net revenue (external customers)   $ 63,379,962     $ 11,028,718     $ 22,270,664     $ 96,679,344     $ -     $ 96,679,344  
Net revenue (intersegment)     1,503,866       -       -       1,503,866       -       1,503,866  
Income (loss) from operations before taxes     25,913,373       5,873,546       5,385,697       37,172,616       (3,519,714 )     33,652,902  
Income taxes     6,742,153       1,192,917       1,350,397       9,285,467       -       9,285,467  
Income (loss) from operations after taxes     19,171,220       4,680,629       4,035,300       27,887,149       (3,519,714 )     24,367,435  
Total assets     146,989,573       52,795,615       42,676,361       242,461,549       3,013,131       245,474,680  
Depreciation and amortization     5,014,155       1,098,678       1,355,783       7,468,616       -       7,468,616  
Capital expenditures     23,933,922       19,334,613       37,664       43,306,199       -       43,306,199  
Write-off / Impairment     3,749,435       2,015,533       1,805,598       7,570,566       -       7,570,566  

 

* 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 Ended June 30,     Six-Month Period Ended June 30,  
Reconciliations   2012     2011     2012     2011  
Total segment operating income   $ 7,829,497     $ 13,496,262     $ 13,089,146     $ 37,172,616  
Corporate costs     (196,294 )     (107,653 )     (878,844 )     (3,519,714 )
Income from operations     7,633,203       13,388,609       12,210,302       33,652,902  
Other income (expense)     30,660       (13,009 )     75,138       20,819  
Income before taxes   $ 7,663,863     $ 13,375,600     $ 12,285,440     $ 33,673,721  

  

The following table shows the major customer(s) (10% or more) for the three-month period ended June 30, 2012.

 

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   $ 1,904     $ 727     $ 1,109     $ 3,740       11.9 %
2   Shouguang City Rongyuan Chemical Company Limited   $ 2,257     $ 898     $ -     $ 3,155       10.1 %
TOTAL       $ 4,161     $ 1,625     $ 1,109     $ 6,895       22.0 %

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 30, 2012.

 

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   $ 3,634     $ 1,113     $ 2,107     $ 6,854       12.4 %
2   Shouguang City Rongyuan Chemical Company Limited   $ 4,278     $ 1,346     $ -     $ 5,624       10.2 %
TOTAL       $ 7,912     $ 2,459     $ 2,107     $ 12,478       22.6 %

 

The following table shows the major customer(s) (10% or more) for the three-month period ended June 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   $ 3,507     $ 1,121     $ 760     $ 5,388       10.5 %
TOTAL       $ 3,507     $ 1,121     $ 760     $ 5,388       10.5 %

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 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   $ 9,238     $ 1,963     $ 1,329     $ 12,530       13.0 %
2   Shouguang City Rongyuan Chemical Company Limited   $ 7,285     $ 2,622     $ -     $ 9,907       10.3 %
TOTAL       $ 16,523     $ 4,585     $ 1,329     $ 22,437       23.3 %