Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.22.4
SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2022
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, formerly Oil Additives.
The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services typically offered in conjunction with the Company’s retardant and foam products.
In June 2022, the Oil Additives segment, which produces and sells P2S5, was renamed the Specialty Products segment to better reflect the current and expanding applications for P2S5 in several end markets and applications, including lubricant additives, various agricultural applications, various mining applications, and emerging electric battery technologies. Within the lubricant additive 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 segment 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, Adjusted EBITDA, depreciation and amortization capital expenditures and assets and of the Company’s operations are summarized below (in thousands):
Successor Predecessor
Year Ended December 31, 2022
November 9, 2021
Through
December 31, 2021
January 1, 2021
Through
November 8, 2021
Year Ended December 31, 2020
Net sales:
Fire safety $ 226,583  $ 7,913  $ 253,267  $ 244,968 
Specialty products 133,922  13,110  88,048  94,609 
Total $ 360,505  $ 21,023  $ 341,315  $ 339,577 
Adjusted EBITDA:
Fire safety $ 77,365  $ (3,696) $ 121,589  $ 112,034 
Specialty products 48,026  1,838  21,703  23,977 
Total segment Adjusted EBITDA 125,391  (1,858) 143,292  136,011 
Less:
Depreciation and amortization 65,795  9,379  52,000  58,117 
Interest and financing expense 42,585  6,352  39,087  42,017 
Founders advisory fees - related party (117,302) 652,990  —  — 
Non-recurring expenses 6,885  5,580  4,845  2,379 
Share-based compensation expense 14,649  4,821  156  — 
Non-cash purchase accounting impact 24,796  6,125  —  — 
(Gain) loss on contingent earn-out (12,706) 198  2,965  — 
Management fees —  —  1,073  1,281 
Contingent future payments —  —  4,375  3,125 
Unrealized foreign currency loss (gain) 3,462  1,006  4,026  (5,640)
Income (loss) before income taxes $ 97,227  $ (688,309) $ 34,765  $ 34,732 
Depreciation and amortization:
Fire safety $ 51,299  $ 7,418  $ 36,994  $ 41,271 
Specialty products 14,496  1,961  15,006  16,846 
Total $ 65,795  $ 9,379  $ 52,000  $ 58,117 
December 31, 2022 December 31, 2021
Assets:
Fire safety $ 1,958,633  $ 2,111,635 
Specialty products 497,983  466,748 
Total $ 2,456,616  $ 2,578,383 
Net sales by geographical area is as follows (in thousands):
Successor Predecessor
Year Ended December 31, 2022
November 9, 2021
Through
December 31, 2021
January 1, 2021
Through
November 8, 2021
Year Ended December 31, 2020
United States 74  % 52  % 75  % 82  %
International sales (1)
26  48  25  18 
Total net sales 100  % 100  % 100  % 100  %
(1)Except for Spain, which represented 11% of sales in the 2021 Successor Period due to the shortened reporting period, the Company had no other operations in any individual international country that represented more than 10% of sales in the year ended December 31, 2022, 2021 Successor Period, 2021 Predecessor Period and 2020 Predecessor Period.
Property, plant and equipment, net by geographical area consisted of the following (in thousands):
December 31, 2022 December 31, 2021
United States $ 37,390  $ 37,159 
Canada 2,594  3,512 
Germany 14,802  17,199 
Other foreign jurisdictions 4,060  4,377 
Total property, plant and equipment, net $ 58,846  $ 62,247