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14. BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

14. 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, 2017		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas			Segment  Total					Corporate								Total
Net revenue (external customers)		$	9,549,777			$	2,054,729			$	12,235,885		$	-			$	23,840,391					$	-							$	23,840,391
Net revenue (intersegment)			1,216,406				-				-			-				1,216,406						-								1,216,406
Income from operations before taxes			2,257,069				497,783				3,176,458			(33,184	)			5,898,126						(1,062,874			)					4,835,252
Income taxes			564,267				117,494				827,560			-				1,509,321						-								1,509,321
Income from operations after taxes			1,692,802				380,289				2,348,898			(33,184	)			4,388,805						(1,062,874			)					3,325,931
Total assets			161,722,622				36,586,589				202,404,825			1,815,010				402,529,046						40,136								402,569,182
Depreciation and amortization			3,556,296				765,183				911,235			-				5,232,714						-								5,232,714
Capital expenditures			466,636				95,864				-			1,260				563,760						-								563,760
Goodwill			-				-				28,920,005			-				28,920,005						-								28,920,005
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

Nine-Month Period Ended September 30, 2017		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas		Segment  Total					Corporate					Total
Net revenue (external customers)		$	41,895,304			$	6,390,390			$	55,875,179		$	-		$	104,160,873				$	-				$	104,160,873
Net revenue (intersegment)			6,305,642				-				-			-			6,305,642					-					6,305,642
Income (loss) from operations before taxes			17,269,984				2,434,872				16,441,115			(90,471	)		36,055,500					(1,924,779		)			34,130,721
Income taxes			4,358,455				586,240				4,207,902			-			9,152,597					-					9,152,597
Income (loss) from operations after taxes			12,911,529				1,848,632				12,233,213			(90,471	)		26,902,903					(1,924,779		)			24,978,124
Total assets			161,722,622				36,586,589				202,404,825			1,815,010			402,529,046					40,136					402,569,182
Depreciation and amortization			11,349,477				1,843,856				2,848,670			-			16,042,003					-					16,042,003
Capital expenditures			466,636				95,864				61,235			-			623,735					-					623,735
Goodwill			-				-				28,920,005			-			28,920,005					-					28,920,005
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

* 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		2017				2016				2017				2016
Total segment operating income		$	5,898,126			$	13,955,617			$	36,055,500			$	39,633,684
Corporate costs			(526,421	)			(180,447	)			(784,416	)			(409,808	)
Unrealized translation difference			(536,453	)			181,030				(1,140,363	)			729,764
Income from operations			4,835,252				13,956,200				34,130,721				39,953,640
Other income, net of expense			99,709				78,042				274,314				222,678
Income before taxes		$	4,934,961			$	14,034,242			$	34,405,035			$	40,176,318

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2017.

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		$	1,938			$	809			$	695			$	3,442				14.4%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2017.

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		$	7,643			$	2,059			$	3,463			$	13,165				12.6%

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%

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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