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14. BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
14. 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.

 

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. All the customers are located in PRC.

 

Three-Month Period Ended June 30, 2013   Bromine*    

Crude

 Salt*

    

Chemical

 Products

    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 17,473,276     $ 3,629,976     $ 11,750,644     $ 32,853,896     $ -     $ 32,853,896  

Net revenue

(intersegment)

     777,746       -       -       777,746       -       777,746  
Income (loss) from operations before taxes     3,882,612       728,638       3,572,036       8,183,286       (804,511 )     7,378,775  
Income taxes     941,322       209,755       897,645       2,048,722       -       2,048,722  
Income (loss) from operations after taxes     2,941,290       518,883       2,674,391       6,134,564       (804,511 )     5,330,053  
Total assets     174,524,258       56,693,091       60,193,635       291,410,984       86,337       291,497,321  
Depreciation and amortization     4,309,920       1,687,487       880,645       6,878,052       -       6,878,052  
Capital expenditures     -       -       -       -       -      

 

-

  
Write-off / Impairment      -      

 

-

       -      

 

-

       -      

 

-

  

 

 

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     6,567,296       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, 2013   Bromine*    

Crude

 Salt*

    

Chemical

 Products

    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 29,207,643     $ 6,080,762     $ 20,068,071     $ 55,356,476     $ -     $ 55,356,476    

Net revenue

(intersegment)

     1,392,476       -       -       1,392,476       -       1,392,476    
Income (loss) from operations before taxes     4,210,425       1,266,858       5,668,715       11,145,998       (1,161,775 )     9,984,223    
Income taxes     1,121,955       243,020       1,426,067       2,791,042       -       2,791,042    
Income (loss) from operations after taxes     3,088,471       1,023,837       4,242,648       8,354,956       (1,161,775 )     7,193,181    
Total assets     174,524,258       56,693,091       60,193,635       291,410,984       86,337       291,497,321    
Depreciation and amortization     8,687,891       3,246,686       1,750,962       13,685,539       -       13,685,539    
Capital expenditures     -       -       -       -       -       -    
Write-off / Impairment      -       -       -       -       -       -    
                                                       

 

 

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     6,567,296       1,281,991       -       7,849,287       -       7,849,287  
Write-off / Impairment      763,043       148,952       -       911,995       -       911,995  

 

* 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   2013     2012     2013     2012  
Total segment operating income   $ 8,183,286     $ 7,829,497     $ 11,145,998     $ 13,089,146  
Corporate costs     (804,511 )     (196,294 )     (1,161,775 )     (878,844 )
Income from operations     7,378,775       7,633,203       9,984,223       12,210,302  
Other income (expense)     25,846       30,660       45,683       75,138  
Income before taxes   $ 7,404,621     $ 7,663,863     $ 10,029,906     $ 12,285,440  

 

 

The following table shows the major customer(s) (10% or more) for the three-month period ended June 30, 2013.

 

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

 

$ 2,166

  

 

$ 751

  

 

$ 1,125

   $  4,042   12.3%
TOTAL     $  2,166   $  751   $  1,125   $  4,042   12.3%

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 30, 2013.

 

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

 

$ 3,347

  

 

$ 1,494

  

 

$ 2,055

   $  6,896   12.5%
TOTAL     $  3,347   $  1,494   $  2,055   $  6,896   12.5%

 

 

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%