Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.23.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company’s products and operations are managed and reported in two operating segments: Fire Safety and Specialty Products.
The Fire Safety segment manufactures and sells fire retardant and firefighting foam products, as well as specialized equipment and services typically offered in conjunction with these retardant and foam products.
The Specialty Products segment produces and sells P2S5 used in several end markets and applications, including lubricant additives, various agricultural applications, various mining applications, and emerging electric battery technologies. Within the lubricant additives end market, currently the Company’s largest end market application, P2S5 is primarily used in the production of a family of compounds called ZDDP, which is considered an essential component in the formulation of engine oils with its main function to provide anti-wear protection to engine components. P2S5 is also used in pesticide and mining chemicals applications.
Interest income, interest expense, other income (expense) and certain corporate operating expenses are neither allocated to the segments nor included in the measures of segment performance by the chief operating decision-maker (“CODM”). The corporate category is not considered to be a segment. The CODM is the Company's CEO.
The Company’s CODM uses the segment net sales and Adjusted EBITDA to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in
a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, management fees and other non-recurring items.
Information related to net sales and Adjusted EBITDA for the Company’s operations are summarized below (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net sales:
Fire safety $ 118,280  $ 121,963  $ 190,164  $ 207,010 
Specialty products 24,378  38,546  72,489  112,222 
Total $ 142,658  $ 160,509  $ 262,653  $ 319,232 
Adjusted EBITDA:
Fire safety $ 56,038  $ 60,363  $ 69,209  $ 81,248 
Specialty products 5,431  15,264  16,366  42,038 
Total segment Adjusted EBITDA 61,469  75,627  85,575  123,286 
Less:
Depreciation and amortization 16,276  16,450  48,493  49,536 
Interest and financing expense 10,448  9,944  30,938  32,582 
Founders advisory fees - related party (24,544) (73,713) (108,806) (154,026)
Intangible impairment 40,738  —  40,738  — 
Non-recurring expenses 22  1,168  1,942  4,788 
Share-based compensation expense 1,749  (845) (130) 7,551 
Non-cash purchase accounting impact —  658  —  24,796 
Gain on contingent earn-out (7,665) (3,644) (7,273) (13,042)
Unrealized foreign currency loss 1,384  4,705  756  8,741 
Income before income taxes $ 23,061  $ 120,904  $ 78,917  $ 162,360