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Segment and Geographical Information
Prior to completing the acquisition of Milacron on November 21, 2019, the Company conducted operations through two reportable business segments: the Process Equipment Group and Batesville. Upon completing the acquisition, the Company has been undertaking a planning process of assessing its management and organizational structure. As of March 31, 2020, the Company is still assessing changes in its internal management reporting structure to incorporate Milacron and the effects it may have on the Company’s reportable segments, if any. Because this process was not complete as of March 31, 2020, the Company has reported the results of operations of Milacron from the acquisition date through March 31, 2020 as a separate reportable segment.
The Company records the direct costs of business operations to the reportable business segments, including stock-based compensation, asset impairments, restructuring activities, and business acquisition costs. Corporate provides management and administrative services to each reportable segment. These services include treasury management, human resources, legal, business development, and other public company support functions such as internal audit, investor relations, financial reporting, and tax compliance. With limited exception for certain professional services and back-office and technology costs, the Company does not allocate these types of corporate expenses to the reportable segments.
The following tables present financial information for the Company’s reportable segments and significant geographical locations:
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Three Months Ended March 31, |
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Six Months Ended March 31, |
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2020 |
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2019 |
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2020 |
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2019 |
Net revenue |
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Process Equipment Group |
$ |
311.1 |
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$ |
326.7 |
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$ |
617.7 |
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$ |
608.9 |
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Milacron |
199.0 |
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— |
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|
332.3 |
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— |
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Batesville |
138.8 |
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|
137.9 |
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|
265.8 |
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|
266.0 |
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Total |
$ |
648.9 |
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$ |
464.6 |
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$ |
1,215.8 |
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$ |
874.9 |
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Adjusted EBITDA (1)
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Process Equipment Group |
$ |
57.5 |
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$ |
55.5 |
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$ |
109.0 |
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$ |
101.7 |
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Milacron |
31.9 |
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— |
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58.2 |
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— |
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Batesville |
32.0 |
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31.6 |
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55.0 |
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58.3 |
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Corporate |
(10.8 |
) |
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(12.2 |
) |
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(19.7 |
) |
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(21.0 |
) |
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Net revenue (2)
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United States |
$ |
288.0 |
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$ |
232.4 |
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$ |
560.9 |
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$ |
447.2 |
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Germany |
188.6 |
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141.6 |
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344.0 |
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252.9 |
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All other foreign business units |
172.3 |
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90.6 |
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310.9 |
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|
174.8 |
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Total |
$ |
648.9 |
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$ |
464.6 |
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$ |
1,215.8 |
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$ |
874.9 |
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(1) |
Adjusted EBITDA is a non-GAAP measure used by management to measure segment performance and make operating decisions. See the Operating Performance Measures section of Management’s Discussion and Analysis for further information on adjusted EBITDA, which is reconciled to consolidated net (loss) income below. |
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(2) |
The Company attributes net revenue to a geography based upon the location of the business that consummates the external sale. |
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March 31,
2020 |
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September 30,
2019 |
Total assets assigned |
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Process Equipment Group |
$ |
1,736.7 |
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$ |
1,729.1 |
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Milacron |
2,001.3 |
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— |
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Batesville |
233.7 |
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186.1 |
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Corporate |
219.0 |
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313.4 |
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Total |
$ |
4,190.7 |
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$ |
2,228.6 |
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Tangible long-lived assets, net(1)
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United States |
$ |
218.1 |
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$ |
75.8 |
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Germany |
105.6 |
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40.2 |
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China |
51.4 |
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4.4 |
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All other foreign business units |
138.6 |
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19.9 |
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Total |
$ |
513.7 |
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$ |
140.3 |
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(1) |
Tangible long-lived assets, net includes operating lease right-of-use assets as of March 31, 2020 due to the adoption of ASU 2016-02 in the current year.
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The following schedule reconciles reportable segment adjusted EBITDA to consolidated net (loss) income:
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Three Months Ended
March 31, |
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Six Months Ended
March 31, |
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2020 |
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2019 |
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2020 |
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2019 |
Adjusted EBITDA: |
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Process Equipment Group |
$ |
57.5 |
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$ |
55.5 |
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$ |
109.0 |
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$ |
101.7 |
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Milacron |
31.9 |
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— |
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58.2 |
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— |
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Batesville |
32.0 |
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31.6 |
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55.0 |
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58.3 |
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Corporate |
(10.8 |
) |
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(12.2 |
) |
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(19.7 |
) |
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(21.0 |
) |
Less: |
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Interest income |
(0.6 |
) |
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(0.2 |
) |
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(1.9 |
) |
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(0.4 |
) |
Interest expense |
20.9 |
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5.4 |
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35.6 |
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10.9 |
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Income tax expense (benefit) |
1.8 |
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13.8 |
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(10.6 |
) |
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28.3 |
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Depreciation and amortization |
38.6 |
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15.1 |
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64.5 |
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29.2 |
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Impairment charges |
82.5 |
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— |
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82.5 |
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— |
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Business acquisition, disposition, and integration costs |
8.0 |
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0.5 |
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61.8 |
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1.1 |
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Restructuring and restructuring-related charges |
0.7 |
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0.7 |
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3.1 |
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1.2 |
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Inventory step-up |
27.5 |
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0.1 |
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37.1 |
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0.2 |
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Net loss on divestiture |
3.0 |
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— |
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3.0 |
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— |
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Other |
0.4 |
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— |
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0.4 |
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— |
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Consolidated net (loss) income |
$ |
(72.2 |
) |
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$ |
39.5 |
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$ |
(73.0 |
) |
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$ |
68.5 |
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