Quarterly report pursuant to Section 13 or 15(d)

Reportable Segments

v3.8.0.1
Reportable Segments
3 Months Ended
Mar. 31, 2018
Segment Reporting [Abstract]  
Reportable Segments
17. Reportable Segments:
Summarized financial information for the Company’s (1) Environmental Catalysts & Services and (2) Performance Materials & Chemicals reportable segments is shown in the following table:
 
 
Three months ended
March 31,
 
 
2018
 
2017
Net sales:
 
 
 
 
Silica Catalysts
 
$
16,473

 
$
17,140

Refining Services
 
100,714

 
94,141

Environmental Catalysts & Services(1)   
 
117,187

 
111,281

 
 
 
 
 
Performance Chemicals
 
189,963

 
170,949

Performance Materials
 
62,742

 
53,773

Eliminations
 
(2,883
)
 
(2,117
)
Performance Materials & Chemicals
 
249,822

 
222,605

 
 
 
 
 
Inter-segment sales eliminations(2)   
 
(812
)
 
(955
)
 
 
 
 
 
Total
 
$
366,197

 
$
332,931

 
 
 
 
 
Segment Adjusted EBITDA:(3)
 
 
 
 
Environmental Catalysts & Services(4)   
 
$
58,421

 
$
56,367

Performance Materials & Chemicals
 
57,152

 
52,523

Total Segment Adjusted EBITDA(5)   
 
$
115,573

 
$
108,890

 
 
 
 
 
 
(1) 
Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 10 to these condensed consolidated financial statements for further information). The proportionate share of sales is $38,349 and $32,708 for the three months ended March 31, 2018 and 2017, respectively.
(2) 
The Company eliminates intersegment sales when reconciling to the Company’s consolidated statements of operations.
(3) 
The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.
(4) 
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $16,807 for the three months ended March 31, 2018, which includes $11,826 of equity in net income plus $1,658 of amortization of investment in affiliate step-up plus $3,323 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Environmental Catalysts and Services segment is $12,087 for the three months ended March 31, 2017, which includes $5,824 of equity in net income plus $3,624 of amortization of investment in affiliate step-up plus $2,639 of joint venture depreciation, amortization and interest.
(5) 
Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses.
A reconciliation of net income (loss) attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
 
 
Three months ended
March 31,
 
 
2018
 
2017
Reconciliation of net income (loss) attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
 
 
 
 
Net income (loss) attributable to PQ Group Holdings Inc.
 
$
214

 
$
(2,454
)
Benefit from income taxes
 
(529
)
 
(2,910
)
Interest expense, net
 
29,163

 
46,785

Depreciation and amortization
 
48,488

 
40,586

Segment EBITDA
 
77,336

 
82,007

Unallocated corporate expenses
 
7,688

 
7,707

Joint venture depreciation, amortization and interest
 
3,323

 
2,639

Amortization of investment in affiliate step-up
 
1,658

 
3,624

Amortization of inventory step-up
 
1,603

 
871

Debt extinguishment costs
 
5,879

 

Net loss on asset disposals
 
1,152

 
348

Foreign currency exchange loss
 
5,063

 
1,986

Non-cash revaluation of inventory, including LIFO
 
4,926

 
2,479

Management advisory fees
 

 
1,250

Transaction and other related costs
 
428

 
1,379

Equity-based and other non-cash compensation
 
3,831

 
1,652

Restructuring, integration and business optimization expenses
 
1,079

 
1,701

Defined benefit pension plan cost
 
550

 
724

Other
 
1,057

 
523

Segment Adjusted EBITDA
 
$
115,573

 
$
108,890