v2.3.0.15
Segment Reporting
9 Months Ended
Sep. 30, 2011
Segment Reporting [Abstract] 
Segment Reporting
16. Segment Reporting

The Company has two division segments based on the products it delivers:

Heavy Duty Diesel Systems division — The Heavy Duty Diesel Systems division includes retrofit of legacy diesel fleets with emissions control systems and the emerging opportunity for new engine emissions controls for on- and off-road vehicles. In 2007, the Company acquired Engine Control Systems (ECS), an Ontario, Canada-based company focused on a variety of heavy duty vehicle applications. This environmental business segment specializes in the design and manufacture of verified exhaust emissions control solutions. The operations of CDTI are included in the Heavy Duty Diesel Systems division from the October 15, 2010 Merger date. Globally, the Heavy Duty Diesel Systems division offers a range of products for the verified retrofit and OEM markets through its distributor/dealer network and direct sales. The ECS and Clean Diesel Technologies-branded products are used to reduce exhaust emissions created by on-road, off-road and stationary diesel and alternative fuel engines including propane and natural gas. The retrofit market in the U.S. is driven in particular by state and municipal environmental regulations and incentive funding for voluntary early compliance. The Heavy Duty Diesel Systems division derives significant revenues from retrofit with a portfolio of solutions verified by the California Air Resources Board and the United States Environmental Protection Agency.

Catalyst division — The Catalyst division is the original part of the Catalytic Solutions (CSI) business behind the Company’s proprietary Mixed Phase Catalyst (MPC ®) technology enabling the Company to produce catalyst formulations for gasoline, diesel and natural gas induced emissions that offer performance, proven durability and cost effectiveness for multiple markets and a wide range of applications. A family of unique high-performance catalysts has been developed — with base-metals or low platinum group metal (PGM) and zero PGM content — to provide increased catalytic function and value for technology-driven automotive industry customers. The Catalyst division’s technical and manufacturing competence in the light duty vehicle market is aimed at meeting auto makers’ most stringent requirements, and it has supplied over ten million parts to light duty vehicle customers since 1996. The Catalyst division also provides catalyst formulations for the Company’s Heavy Duty Diesel Systems division.

Corporate — Corporate includes cost for personnel, insurance, recapitalization expense and public company expenses such as legal, audit and taxes that are not allocated down to the operating divisions.

Discontinued operations — In 2006, the Company purchased AUS, a provider of cost-effective, engineered solutions for the clean and efficient utilization of fossil fuels. AUS, referred to as the Company’s Energy Systems division, provided emissions control and energy systems solutions for industrial and utility boilers, process heaters, gas turbines and generation sets used largely by major utilities, industrial process plants, OEMs, refineries, food processors, product manufacturers and universities. The Energy Systems division delivered integrated systems built for customers’ specific combustion processes. As discussed in Note 13, this division was sold on October 1, 2009.

Summarized financial information for the Company’s reportable segments for the three and nine months ended September 30, 2011 and 2010 is as follows (in thousands):

 

                                 
    Three Months  Ended
September 30,		     Nine Months  Ended
September 30,		  
          2011                 2010                 2011                 2010        

Net sales

                                

Heavy Duty Diesel Systems

     $ 11,076          $ 6,956          $ 30,105          $ 22,732     

Catalyst

     5,902          3,983          13,990          13,919     

Corporate

     —          —          —          —     

Eliminations (1)

     (2,004)         —          (3,805)         (341)    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     $ 14,974          $ 10,939          $ 40,290          $ 36,310     
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Income (loss) from operations

                                

Heavy Duty Diesel Systems

     $ 918          $ 454          $ 1,096          $ 2,367     

Catalyst (2)

     (715)         (846)         (2,076)         2,257     

Corporate

     (1,381)         (1,644)         (5,509)         (4,560)    

Eliminations

     (72)         —          (180)         —     
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     $ (1,250)         $ (2,036)         $ (6,669)         $ 64     
   

 

 

    

 

 

    

 

 

    

 

 

  

 

                 
    September 30,
2011		     December 31,
2010		  

Total assets

                

Heavy Duty Diesel Systems

     $ 41,674        $ 36,559     

Catalyst

     42,626          33,567     

Discontinued operations

     1,080          1,247     

Eliminations

     (43,456)         (38,655)    
   

 

 

    

 

 

  

Total

     $ 41,924          $ 32,718     
   

 

 

    

 

 

  

 

(1) Elimination of Catalyst revenue related to sales to Heavy Duty Diesel Systems.

 

(2) Catalyst division income from operations includes a $3.9 million gain on sale of intellectual property to TKK in the nine months ended September 30, 2010.

Net sales by geographic region for the three and nine months ended September 30, 2011 and 2010 as follows (in thousands):

 

                                 
        Three Months Ended    
September 30,		         Nine Months Ended    
September 30,		  
    2011     2010     2011     2010  

United States

     $ 5,596         $ 4,990         $ 15,331         $ 16,336    

Canada

     6,049         4,582         17,363         15,759    

Europe

     3,329         1,367         7,596         4,215    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     $ 14,974         $ 10,939         $ 40,290         $ 36,310    
   

 

 

    

 

 

    

 

 

    

 

 

  

Geographic information is based on country of origin. The majority of Canadian sales are to U.S. customers.