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Operating Segments
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Operating Segments

11. Operating Segments

 

In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity: (1) from which we may earn revenue and incur expenses; (2) whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and (3) for which discrete financial information is available.

 

Our reporting segments are defined as below:

 

TREATMENT SEGMENT, which includes:

 

  - nuclear, low-level radioactive, mixed waste (containing both hazardous and low-level radioactive constituents), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities; and
     
  - Research & Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.

 

 

SERVICES SEGMENT, which includes:

 

  - Technical services, which include:

 

  ○ professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering;
  ○ health physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support to government and private radioactive materials licensees;
  ○ integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance;
  ○ global technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project management, waste management, environmental, and decontamination and decommissioning field, technical, and management personnel and services to commercial and government customers; and
  ○ waste management services to commercial and governmental customers.

 

  - Nuclear services, which include:

 

  ○ decontamination and decommissioning (“D&D”) of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology applications, specialty services, logistics, transportation, processing and disposal;
  ○ license termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process: project management, planning, characterization, waste stream identification and delineation, remediation/demo, final status survey, compliance demonstration, reporting, transportation, disposal and emergency response.

 

  - A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.
  - A company owned gamma spectroscopy laboratory for the analysis of oil and gas industry solids and liquids.

 

MEDICAL SEGMENT, which is currently involved on a limited basis in the R&D of the Company’s medical isotope production technology, has not generated any revenue and has substantially reduced its R&D costs and activities due to the need for capital to fund these activities. The Company anticipates that the Medical Segment will not resume full R&D activities until the necessary capital is obtained through its own credit facility or additional equity raise, or obtains partners willing to provide funding for its R&D.

 

Our reporting segments exclude our corporate headquarters and our discontinued operations (see “Note 10 – Discontinued Operations”) which do not generate revenues.

 

 

The table below presents certain financial information of our operating segments for the three and six months ended June 30, 2021 and 2020 (in thousands):

 

Segment Reporting for the Quarter Ended June 30, 2021

 

     Treatment     Services   Medical   Segments Total   Corporate (1)   Consolidated Total 
Revenue from external customers  $7,706   $8,439    —   $16,145   $—   $16,145 
Intercompany revenues   319    32    —    351    —    — 
Gross profit (negative gross profit)   1,433    (467)   —    966    —    966 
Research and development   43    19    72    134    10    144 
Interest income   —    —    —    —    2    2 
Interest expense   (18)   —    —    (18)   (47)   (65)
Interest expense-financing fees   —    —    —    —    (9)   (9)
Depreciation and amortization   310    85    —    395    5    400 
Segment income (loss) before income taxes   471    (1,292)   (72)   (893)   4,027(2)   3,134 
Income tax expense   3    10    —    13    —    13 
Segment income (loss)   468    (1,302)   (72)   (906)   4,027    3,121 
Expenditures for segment assets   270    10    —    280    9    289(3)

 

Segment Reporting for the Quarter Ended June 30, 2020

 

     Treatment     Services   Medical   Segments Total   Corporate (1)   Consolidated Total 
Revenue from external customers  $7,840   $14,207    —   $22,047   $—   $22,047 
Intercompany revenues   446    5    —    451    —    — 
Gross profit   1,695    1,615    —    3,310    —    3,310 
Research and development   52    46    74    172    37    209 
Interest income   1    —    —    1    27    28 
Interest expense   (28)   (4)   —    (32)   (67)   (99)
Interest expense-financing fees   —    —    —    —    (60)   (60)
Depreciation and amortization   275    84    —    359    5    364 
Segment income (loss) before income taxes   750    1,031    (74)   1,707    (1,456)   251 
Income tax benefit   (9)   —    —    (9)   —    (9)
Segment income (loss)   759    1,031    (74)   1,716    (1,456)   260 
Expenditures for segment assets   320    146    —    466    2    468(4)

 

Segment Reporting for the Six Months Ended June 30, 2021

 

     Treatment     Services   Medical   Segments Total   Corporate (1)   Consolidated Total 
Revenue from external customers  $15,201   $24,077    —   $39,278   $—   $39,278 
Intercompany revenues   979    39    —    1,018    —    — 
Gross profit   2,358    964    —    3,322    —    3,322 
Research and development   90    32    149    271    24    295 
Interest income   —    —    —    —   21    21 
Interest expense   (37)   (8)   —    (45)   (87)   (132)
Interest expense-financing fees   —    —    —    —    (17)   (17)
Depreciation and amortization   620    170    —    790    9    799 
Segment income (loss) before income taxes   352    (737)   (149)   (534)   2,613(2)   2,079 
Income tax (benefit) expense   (14)   10    —    (4)   —    (4)
Segment income (loss)   366    (747)   (149)   (530)   2,613    2,083 
Expenditures for segment assets   627    14    —    641    9    650(3)

 

Segment Reporting for the Six Months Ended June 30, 2020

 

     Treatment     Services   Medical   Segments Total   Corporate (1)   Consolidated Total 
Revenue from external customers  $17,403   $29,504    —   $46,907   $—   $46,907 
Intercompany revenues   653    13    —    666    —    — 
Gross profit   4,440    3,510    —    7,950    —    7,950 
Research and development   145    112    140    397    44    441 
Interest income   1    —    —    1    83    84 
Interest expense   (46)   (10)   —    (56)   (163)   (219)
Interest expense-financing fees   —    —    —    —    (129)   (129)
Depreciation and amortization   539    162    —    701    10    711 
Segment income (loss) before income taxes   2,297    2,349    (140)   4,506    (2,933)   1,573 
Income tax expense   5    —    —    5    —    5 
Segment income (loss)   2,292    2,349    (140)   4,501    (2,933)   1,568 
Expenditures for segment assets   1,000    361    —    1,361    5    1,366(4)

 

(1) Amounts reflect the activity for corporate headquarters not included in the segment information.

 

(2) Amounts includes approximately $5,381,000 of “Gain on extinguishment of debt” recorded in connection with the Company’s PPP Loan which was forgiven by the SBA effective June 15, 2021 (see “Note 8 – Long Term Debt – PPP Loan” for information of this loan forgiveness).

 

(3) Net of financed amount of $0 and $29,000 for the three and six months ended June 30, 2021, respectively.

 

(4) Net of financed amount of $51,000 and $132,000 for the three and six months ended June 30, 2020, respectively.