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13. BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
13. 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, 2014   Bromine*    

Crude

 Salt*

    

Chemical

 Products

    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 16,214,612     $  2,915,445     $ 12,622,757     $ 31,752,814     $ -     $ 31,752,814  

Net revenue

(intersegment)

     836,840       -       -       836,840       -       836,840  
Income (loss) from operations before taxes     3,599,026       (116,798 )     4,191,572       7,673,800       (142,228 )     7,531,572  
Income taxes     735,834       141,819       1,055,850       1,933,503       -       1,933,503  
Income (loss) from operations after taxes     2,863,192       (258,617 )     3,135,722       5,740,297       (142,228 )     5,598,069  
Total assets     189,852,951       53,961,678       72,505,351       316,319,980       25,561       316,345,541  
Depreciation and amortization     4,378,252       1,604,960       887,546       6,870,758       -       6,870,758  
Capital expenditures     -       -       -       -       -      

 

-

  

 

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     -       -       -       -       -      

 

-

  

 

 Six-Month Period Ended June 30, 2014   Bromine*    

Crude

 Salt*

    

Chemical

 Products

    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 27,976,528     $ 5,357,340     $ 24,011,122     $ 57,344,990     $ -     $ 57,344,990    

Net revenue

(intersegment)

     1,620,833       -       -       1,620,833       -       1,620,833    
Income (loss) from operations before taxes     4,617,298       526,509       7,961,305       13,105,112       28,104       13,133,216    
Income taxes     1,100,419       197,059       2,005,094       3,302,572       -       3,302,572    
Income (loss) from operations after taxes     3,516,879       329,450       5,956,211       9,802,540       28,104       9,830,644    
Total assets     189,852,951       53,961,678       72,505,351       316,319,980       25,561       316,345,541    
Depreciation and amortization     8,928,395       3,099,717       1,780,886       13,808,998       -       13,808,998    
Capital expenditures     34,378       5,208       -       39,586       -       39,586    
                                                       

 

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     -       -       -       -       -       -    
                                                       

 

 

* 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   2014     2013     2014     2013  
Total segment operating income   $ 7,673,800     $ 8,183,286     $ 13,105,112     $ 11,145,998  
Corporate costs     (142,228 )     (804,511 )     28,104       (1,161,775 )
Income from operations     7,531,572       7,378,775       13,133,216       9,984,223  
Other income, net of expense     66,743       25,846       120,506       45,683  
Income before taxes   $ 7,598,315     $ 7,404,621     $ 13,253,722     $ 10,029,906  

 

 

The following table shows the major customer(s) (10% or more) for the three-month period ended June 30, 2014.

 

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

 

$ 2,505

  

 

$ 693

  

 

$ 1,935

   $  5,133   16.2%
TOTAL     $  2,505   $  693   $  1,935   $  5,133   16.2%

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 30, 2014.

 

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

 

$ 4,088

  

 

$ 1,264

  

 

$ 3,320

   $  8,672   15.1%
TOTAL     $  4,088   $  1,264   $  3,320   $  8,672   15.1%

 

 

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%