Thermon Group Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

Segment Information

3 Months Ended

Jun. 30, 2018

We operate in four reportable segments based on four geographic countries or regions in which we operate: the United States, Canada, Europe and Asia. Within our four reportable segments, our core products and services are focused on thermal solutions primarily related to the electrical heat tracing industry. Each of our reportable segments serves a similar class of customers, including engineering, procurement and construction companies, international and regional oil and gas companies, commercial sub-contractors, electrical component distributors and direct sales to existing plant or industrial applications. Profitability within our segments is measured by operating income. Profitability can vary in each of our reportable segments based on the competitive environment within the region, the level of corporate overhead, such as the salaries of our senior executives, and the level of research and development and marketing activities in the region, as well as the mix of products and services. Since March 2015, we acquired THS, Unitemp, IPI and Sumac. THS (formerly known as CCI) develops and produces advanced industrial heating and filtration solutions for industrial and hazardous area applications that closely align with Thermon's core business and serves similar end markets in North America. As such, we have elected to report THS's operations through our United States and Canada reportable segments. Both Unitemp and IPI offer thermal solutions and have been included in our Europe and United States reportable segments, respectively. Sumac provides temporary power products that differ from our core thermal solutions business. As we anticipate that our full year operating results from Sumac will comprise less than 10% of our total sales and operating income, Sumac has been aggregated in our Canada segment. For purposes of this note, revenue is attributed to individual countries or regions on the basis of the physical location and jurisdiction of organization of the subsidiary that invoices the material and services.

Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations, property, plant and equipment, net and total assets for each of our four reportable segments are as follows:



	Three Months Ended June 30, 2018			Three Months Ended June 30, 2017
Sales to External Customers:
United States	$	31,629		$	23,551
Canada	28,628			12,099
Europe	20,803			10,617
Asia	7,842			5,469
	$	88,902		$	51,736
Inter-Segment Sales:
United States	$	11,929		$	9,582
Canada	1,053			1,464
Europe	1,105			361
Asia	145			373
	$	14,232		$	11,780
Depreciation Expense:
United States	$	1,120		$	986
Canada	1,011			605
Europe	109			90
Asia	40			32
	$	2,280		$	1,713
Amortization Expense:
United States	$	1,505		$	1,504
Canada	3,649			840
Europe	357			329
Asia	266			266
	$	5,777		$	2,939
Income (loss) from operations:
United States	$	2,736		$	(1,047	)
Canada	3,285			3,448
Europe	2,648			(146		)
Asia	896			462
Unallocated:
Stock compensation	(1,004		)	(785		)
Public company costs	(321		)	(374		)
	$	8,240		$	1,558



	June 30, 2018		March 31, 2018
Property, plant and equipment, net:
United States	$	37,178	$	37,112
Canada	32,527		33,076
Europe	3,329		3,567
Asia	676		730
	$	73,710	$	74,485
Total Assets:
United States	$	211,707	$	213,099
Canada	304,491		317,635
Europe	88,433		89,379
Asia	40,794		42,364
	$	645,425	$	662,477