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15. BUSINESS SEGMENTS
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
15. BUSINESS SEGMENTS

The Company has four reportable segments:  bromine, crude salt, chemical products and natural gas. 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 September 30, 2016

   Bromine*    

Crude

 Salt*

    

Chemical

 Products

     Natural Gas    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 15,971,847     $ 2,310,799     $ 20,528,976   $ -     $ 38,811,622     $ -     $ 38,811,622  

Net revenue

(intersegment)

     2,008,397       -       -     -       2,008,397       -       2,008,397  
Income from operations before taxes     7,898,302       (382,917 )     6,442,708     (2,476 )     13,955,617       583       13,956,200  
Income taxes     1,974,576       (97,982 )     1,641,935     -       3,518,529       -       3,518,529  
Income from operations after taxes     5,923,726       (284,935 )     4,800,773     (2,476 )     10,437,088       583       10,437,671  
Total assets     150,950,225       32,757,666       192,128,326     1,687,960       377,524,177       183,416       377,707,593  
Depreciation and amortization     3,121,243       1,315,140       1,080,975     -       5,517,358       -       5,517,358  
Capital expenditures     12,890,713       2,336,309       -     651,295       15,878,317       -       15,878,317  
Goodwill     -       -       28,743,418     -       28,743,418       -       28,743,418  

 

 

                                                      

Three-Month

Period Ended September 30, 2015

   Bromine*    

Crude

 Salt*

    

Chemical

 Products

     Natural Gas    

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 14,940,666     $ 3,032,201     $ 24,628,731   $ -     $ 42,601,598     $ -     $ 42,601,598  

Net revenue

(intersegment)

     2,330,808       -       -     -       2,330,808       -       2,330,808  
Income from operations before taxes     4,307,709       351,251       8,393,184     -       13,052,144       851,014       13,903,158  
Income taxes     1,076,927       86,638       2,126,807     -       3,290,372       -       3,290,372  
Income from operations after taxes     3,230,782       264,613       6,266,377     -       9,761,772       851,014       10,612,786  
Total assets     142,874,828       42,858,017       181,468,875     -       367,201,720       38,165       367,239,885  
Depreciation and amortization     3,961,290       1,680,827       1,405,726     -       7,047,843       -       7,047,843  
Capital expenditures     2,365,417       427,283       -     -       2,792,700       -       2,792,700  
Goodwill     -       -       30,173,391     -       30,173,391       -       30,173,391  

 

 

Nine-Month

Period Ended September 30, 2016

   Bromine*    

Crude

 Salt*

    

Chemical

 Products

     Natural Gas  

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 47,621,980     $ 6,383,095     $ 66,902,764   $  -   $ 120,907,839     $ -     $ 120,907,839  

Net revenue

(intersegment)

     6,501,530       -       -     -     6,501,530       -       6,501,530  
Income (loss) from operations before taxes     19,103,472       (165,403 )     20,698,116     (2,501 )   39,633,684       319,956       39,953,640  
Income taxes     4,775,868       (46,369 )      5,267,123     -     9,996,622       -       9,996,622  
Income (loss) from operations after taxes     14,327,604       (119,034 )     15,430,993     (2,501 )   29,637,062       319,956       29,957,018  
Total assets     150,950,225       32,757,666       192,128,326     1,687,960     377,524,177       183,416       377,707,593  
Depreciation and amortization     11,633,581       3,847,502       3,550,567     -     19,031,650       -       19,031,650  
Capital expenditures     12,943,491       2,340,817       -     1,464,884     16,749,192       -       16,749,192  
Goodwill     -       -       28,743,418     -     28,743,418       -       28,743,418  

 

Nine-Month

Period Ended September 30, 2015

   Bromine*    

Crude

 Salt*

    

Chemical

 Products

     Natural Gas  

Segment

 Total

     Corporate     Total  

Net revenue

(external customers)

   $ 41,066,776     $ 7,905,274     $ 77,890,447   $  -   $ 126,862,497     $ -     $ 126,862,497  

Net revenue

(intersegment)

     6,355,047       -       -     -     6,355,047       -       6,355,047  
Income (loss) from operations before taxes     8,950,595       534,760       26,205,578     -     35,690,933       (115,735 )     35,575,198  
Income taxes     2,237,649       133,956       6,633,553     -     9,005,158       -       9,005,158  
Income (loss) from operations after taxes     6,712,946       400,804       19,572,025     -     26,685,775       (115,735 )     26,570,040  
Total assets     142,874,828       42,858,017       181,468,875     -     367,201,720       38,165       367,239,885  
Depreciation and amortization     13,198,194       4,671,613       4,084,705     -     21,954,512       -       21,954,512  
Capital expenditures     2,365,417       427,283       -     -     2,792,700       -       2,792,700  
Goodwill     -       -       30,173,391     -     30,173,391       -       30,173,391  

 

* 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 September 30,

    

Nine-Month Period

Ended September 30,

  
Reconciliations   2016     2015     2016     2015  
Total segment operating income   $ 13,955,617     $ 13,052,144     $ 39,633,684     $ 35,690,933  
Corporate costs     (180,447 )     (210,707 )     (409,808 )     (1,153,164 )
Unrealized translation difference     181,030       1,061,721       729,764       1,037,429  
Income from operations     13,956,200       13,903,158       39,953,640       35,575,198  
Other income, net of expense     78,042       66,636       222,678       199,913  
Income before taxes   $ 14,034,242     $ 13,969,794     $ 40,176,318     $ 35,775,111  

 

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2016.

 

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   $ 2,538     $ 747     $ 1,324     $ 4,609       11.9%  
                                               

 

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2016.

 

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   $ 8,230     $ 1,919     $ 4,321     $ 14,470       12.0%  
                                               

 

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2015.

 

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   $ 2,059     $ 852     $ 2,085     $ 4,996       11.7%  
                                               

 

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2015.

 

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   $ 6,130     $ 2,047     $ 5,769     $ 13,946       11.0%