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SEGMENT REPORTING | 12 Months Ended
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Dec. 31, 2023
Segment Reporting [Abstract] |
SEGMENT REPORTING | SEGMENT REPORTING As of December 31, 2023, the Company operates and reports its results in three reportable segments: Intellectual Property Operations, Industrial Operations and Energy Operations. The Company reports segment information based on the management approach and organizes its businesses based on products and services. The management approach designates the internal reporting used by the chief operating decision maker for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measure of the Company’s reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. Other than the Company's equity securities investments, specific asset information is not included in managements review at this time. The Company’s Intellectual Property Operations segment invests in IP and related absolute return assets, and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business we are a principal in the licensing and enforcement of patent portfolios, with our operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. While we, from time to time, partner with inventors and patent owners, from small entities to large corporations, we assume all responsibility for advancing operational expenses while pursuing a patent licensing and enforcement program. When applicable, we share net licensing revenue with our patent partners as that program matures, on a prearranged and negotiated basis. We may also provide upfront capital to patent owners as an advance against future licensing revenue. Currently, on a consolidated basis, our operating subsidiaries own or control the rights to multiple patent portfolios, which include U.S. patents and certain foreign counterparts, covering technologies used in a variety of industries. We generate revenues and related cash flows from the granting of IP rights for the use of patented technologies that our operating subsidiaries control or own. The Company’s Industrial Operations segment generates operating income by designing and manufacturing printers and consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements. Consumable products include inked ribbons which are used in Printronix’s printers. Printronix’s products are primarily sold through channel partners, such as dealers and distributors, to end-users. The Company's Energy Operations segment generates operating income from its wells and engages in the acquisition, exploration, development, and production of oil and natural gas resources located in Roberts and Hemphill Counties in Texas. Benchmark seeks to acquire predictable and shallow decline, cash flowing oil and gas properties whose value can be enhanced via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. The Energy Operations reporting segment did not exist prior to the acquisition of Benchmark in November 2023, accordingly, the periods presented below include Benchmark's operations from November 13, 2023 through December 31, 2023. As of and for the year ended December 31, 2022, the consolidated results represented the results of the Company's two reporting segments: Intellectual Property Operations and Industrial Operations. The Company's segment information, including Benchmark's operations from November 13, 2023 through December 31, 2023, is as follows:
| Year Ended December 31, 2023
| Intellectual Property Operations |  | Industrial Operations |  | Energy Operations |  | Total |  |  |  |  |  |
| (In thousands)
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |
License fees | $ | 89,156 |  |  | $ | — |  |  | $ | — |  |  | $ | 89,156 |  |  |  |  |  |  |
Printers and parts | — |  |  | 12,513 |  |  | — |  |  | 12,513 |  |  |  |  |  |  |
Consumable products | — |  |  | 19,091 |  |  | — |  |  | 19,091 |  |  |  |  |  |  |
Services | — |  |  | 3,494 |  |  | — |  |  | 3,494 |  |  |  |  |  |  |
Oil sales | — |  |  | — |  |  | 256 |  |  | 256 |  |  |  |  |  |  |
Natural gas sales | — |  |  | — |  |  | 372 |  |  | 372 |  |  |  |  |  |  |
Natural gas liquids sales | — |  |  | — |  |  | 220 |  |  | 220 |  |  |  |  |  |  |
Total revenues | 89,156 |  |  | 35,098 |  |  | 848 |  |  | 125,102 |  |  |  |  |  |  |
Cost of revenues: |  |  |  |  |  |  |  |  |  |  |  |  |
Inventor royalties | 1,025 |  |  | — |  |  | — |  |  | 1,025 |  |  |  |  |  |  |
Contingent legal fees | 10,998 |  |  | — |  |  | — |  |  | 10,998 |  |  |  |  |  |  |
Litigation and licensing expenses | 10,771 |  |  | — |  |  | — |  |  | 10,771 |  |  |  |  |  |  |
Amortization of patents | 11,370 |  |  | — |  |  | — |  |  | 11,370 |  |  |  |  |  |  |
Cost of sales | — |  |  | 18,009 |  |  | — |  |  | 18,009 |  |  |  |  |  |  |
Cost of production | — |  |  | — |  |  | 656 |  |  | 656 |  |  |  |  |  |  |
Total cost of revenues | 34,164 |  |  | 18,009 |  |  | 656 |  |  | 52,829 |  |  |  |  |  |  |
Segment gross profit | 54,992 |  |  | 17,089 |  |  | 192 |  |  | 72,273 |  |  |  |  |  |  |
Other operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |
Engineering and development expenses | — |  |  | 735 |  |  | — |  |  | 735 |  |  |  |  |  |  |
Sales and marketing expenses | — |  |  | 6,908 |  |  | — |  |  | 6,908 |  |  |  |  |  |  |
Amortization of intangible assets | — |  |  | 1,732 |  |  | — |  |  | 1,732 |  |  |  |  |  |  |
General and administrative expenses | 7,402 |  |  | 6,990 |  |  | 264 |  |  | 14,656 |  |  |  |  |  |  |
Total other operating expenses | 7,402 |  |  | 16,365 |  |  | 264 |  |  | 24,031 |  |  |  |  |  |  |
Segment operating income (loss) | $ | 47,590 |  |  | $ | 724 |  |  | $ | (72) |  |  | 48,242 |  |  |  |  |  |  |
Parent general and administrative expenses |  |  |  |  |  |  | 27,306 |  |  |  |  |  |  |
Operating income |  |  |  |  |  |  | 20,936 |  |  |  |  |  |  |
Total other income |  |  |  |  |  |  | 46,490 |  |  |  |  |  |  |
Income before income taxes |  |  |  |  |  |  | $ | 67,426 |  |  |  |  |  |  |
The Company's two reportable segment information for the year ended December 31, 2022 is as follows:
|  |  |  |  |  |  |  |  | Year Ended December 31, 2022
|  |  |  |  |  |  |  |  | Intellectual Property Operations |  | Industrial Operations |  | Total
|  |  |  |  |  |  |  |  | (In thousands)
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |
License fees |  |  |  |  |  |  |  |  | $ | 19,508 |  |  | $ | — |  |  | $ | 19,508 |
Printers and parts |  |  |  |  |  |  |  |  | — |  |  | 16,118 |  |  | 16,118 |
Consumable products |  |  |  |  |  |  |  |  | — |  |  | 19,314 |  |  | 19,314 |
Services |  |  |  |  |  |  |  |  | — |  |  | 4,283 |  |  | 4,283 |
Total revenues |  |  |  |  |  |  |  |  | 19,508 |  |  | 39,715 |  |  | 59,223 |
Cost of revenues: |  |  |  |  |  |  |  |  |  |  |  |  |
Inventor royalties |  |  |  |  |  |  |  |  | 1,212 |  |  | — |  |  | 1,212 |
Contingent legal fees |  |  |  |  |  |  |  |  | 2,444 |  |  | — |  |  | 2,444 |
Litigation and licensing expenses |  |  |  |  |  |  |  |  | 3,970 |  |  | — |  |  | 3,970 |
Amortization of patents |  |  |  |  |  |  |  |  | 10,403 |  |  | — |  |  | 10,403 |
Cost of sales |  |  |  |  |  |  |  |  | — |  |  | 19,359 |  |  | 19,359 |
Total cost of revenues |  |  |  |  |  |  |  |  | 18,029 |  |  | 19,359 |  |  | 37,388 |
Segment gross profit |  |  |  |  |  |  |  |  | 1,479 |  |  | 20,356 |  |  | 21,835 |
Other operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |
Engineering and development expenses |  |  |  |  |  |  |  |  | — |  |  | 626 |  |  | 626 |
Sales and marketing expenses |  |  |  |  |  |  |  |  | — |  |  | 8,621 |  |  | 8,621 |
Amortization of intangible assets |  |  |  |  |  |  |  |  | — |  |  | 1,732 |  |  | 1,732 |
General and administrative expenses |  |  |  |  |  |  |  |  | 5,428 |  |  | 8,254 |  |  | 13,682 |
Total other operating expenses |  |  |  |  |  |  |  |  | 5,428 |  |  | 19,233 |  |  | 24,661 |
Segment operating (loss) income |  |  |  |  |  |  |  |  | $ | (3,949) |  |  | $ | 1,123 |  |  | (2,826) |
Parent general and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  | 37,266 |
Operating income loss |  |  |  |  |  |  |  |  |  |  |  |  | (40,092) |
Total other expense |  |  |  |  |  |  |  |  |  |  |  |  | (87,058) |
Loss before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | $ | (127,150) |
The Company's reportable segment information as of December 31, 2023 and 2022 is as follows:
| December 31, 2023 |  | December 31, 2022
| (In thousands)
Equity securities investments: |  |  |
Equity securities | $ | 63,068 |  |  | $ | 61,608 |
Equity securities without readily determinable fair value | 5,816 |  |  | 5,816 |
Equity method investments | 30,934 |  |  | 30,934 |
Total parent equity securities investments | 99,818 |  |  | 98,358 |
Other parent assets | 218,909 |  |  | 156,394 |
Segment total assets: |  |  |
Intellectual property operations | 234,254 |  |  | 176,119 |
Industrial operations | 47,854 |  |  | 52,057 |
Energy operations | $ | 32,710 |  |  | $ | — |
Total assets | $ | 633,545 |  |  | $ | 482,928 |
The Company's revenues, including Benchmark's sales from November 13, 2023 through December 31, 2023, and long-lived tangible assets by geographic area are presented below. Intellectual Property Operations revenues are attributed to licensees domiciled in foreign jurisdictions. Printronix's net sales to external customers are attributed to geographic areas based upon the final destination of products shipped. The Company, primarily through its Printronix subsidiary, has identified three global regions for marketing its products and services: Americas, Europe, Middle East and Africa, and Asia-Pacific. Assets are summarized based on the location of held assets. Benchmark's sales are only attributed to the United States of America.
| Year Ended December 31, 2023
| Intellectual Property Operations |  | Industrial Operations |  | Energy Operations |  | Total |  |  |  |  |  |
| (In thousands)
Revenues by geographic area: |  |  |  |  |  |  |  |  |  |  |  |  |
United States | $ | 80,407 |  |  | $ | 14,128 |  |  | $ | 848 |  |  | $ | 95,383 |  |  |  |  |  |  |
Canada and Latin America | 514 |  |  | 1,100 |  |  | — |  |  | 1,614 |  |  |  |  |  |  |
Total Americas | 80,921 |  |  | 15,228 |  |  | 848 |  |  | 96,997 |  |  |  |  |  |  |
Europe, Middle East and Africa | — |  |  | 8,935 |  |  | — |  |  | 8,935 |  |  |  |  |  |  |
China | 8,200 |  |  | 3,512 |  |  | — |  |  | 11,712 |  |  |  |  |  |  |
India | — |  |  | 2,849 |  |  | — |  |  | 2,849 |  |  |  |  |  |  |
Asia-Pacific, excluding China and India | 35 |  |  | 4,574 |  |  | — |  |  | 4,609 |  |  |  |  |  |  |
Total Asia-Pacific | 8,235 |  |  | 10,935 |  |  | — |  |  | 19,170 |  |  |  |  |  |  |
Total revenues | $ | 89,156 |  |  | $ | 35,098 |  |  | $ | 848 |  |  | $ | 125,102 |  |  |  |  |  |  |
|  |  |  |  |  |  | Year Ended December 31, 2022
|  |  |  |  |  |  | Intellectual Property Operations |  | Industrial Operations |  | Total
|  |  |  |  |  |  | (In thousands)
Revenues by geographic area: |  |  |  |  |  |  |  |  |  |  |
United States |  |  |  |  |  |  | $ | 18,882 |  |  | $ | 15,541 |  |  | $ | 34,423 |
Canada and Latin America |  |  |  |  |  |  | 11 |  |  | 2,145 |  |  | 2,156 |
Total Americas |  |  |  |  |  |  | 18,893 |  |  | 17,686 |  |  | 36,579 |
Europe, Middle East and Africa |  |  |  |  |  |  | 589 |  |  | 9,298 |  |  | 9,887 |
China |  |  |  |  |  |  | — |  |  | 5,207 |  |  | 5,207 |
India |  |  |  |  |  |  | — |  |  | 2,957 |  |  | 2,957 |
Asia-Pacific, excluding China and India |  |  |  |  |  |  | 26 |  |  | 4,567 |  |  | 4,593 |
Total Asia-Pacific |  |  |  |  |  |  | 26 |  |  | 12,731 |  |  | 12,757 |
Total revenues |  |  |  |  |  |  | $ | 19,508 |  |  | $ | 39,715 |  |  | $ | 59,223 |
| December 31, 2023
| Intellectual Property Operations |  | Industrial Operations |  | Energy Operations |  | Total
| (In thousands)
Long-lived tangible assets by geographic area: |  |  |  |  |  |  |
United States | $ | 201 |  |  | $ | 92 |  |  | $ | 25,117 |  |  | $ | 25,410 |
Malaysia | — |  |  | 1,949 |  |  | — |  |  | 1,949 |
Other foreign countries | — |  |  | 114 |  |  | — |  |  | 114 |
Total | $ | 201 |  |  | $ | 2,155 |  |  | $ | 25,117 |  |  | $ | 27,473 |
| December 31, 2022
| Intellectual Property Operations |  | Industrial Operations |  | Total
| (In thousands)
Long-lived tangible assets by geographic area: |  |  |  |  |
United States | $ | 324 |  |  | $ | 302 |  |  | $ | 626 |
Malaysia | — |  |  | 2,703 |  |  | 2,703 |
Other foreign countries | — |  |  | 208 |  |  | 208 |
Total | $ | 324 |  |  | $ | 3,213 |  |  | $ | 3,537 |

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