| Reconciliation of Revenue from Reportable Segments to Consolidated |
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.
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|
|
(5)
|
Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses. |
|
| Reconciliation of Net Loss to Segment Adjusted EBITDA |
A reconciliation of net income (loss) attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:
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|
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|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|