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Segment Reporting and Geographic Information
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segment Reporting and Geographic Information

NOTE 18—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

 

(a) General Information

 

As of December 31, 2014, the Company’s operations are based upon three operating segments:

 

  ● Energy & Security Sonar Solutions. We provide sonar and acoustic related solutions for energy, defense and commercial markets with a focus on underwater site security for strategic energy installations and other advanced acoustic systems and real-time embedded hardware and software development and production through our DSIT Solutions Ltd. (“DSIT”) subsidiary.
     
  ● Smart Grid Distribution Automation. These products and services are provided by our GridSenseTM subsidiaries (GridSense Inc. in the United States and GridSense Pty Ltd. and CHK GridSense Pty Ltd. in Australia - collectively “GridSense”) which develop, market and sell remote monitoring and control systems to electric utilities and industrial facilities worldwide.
     
  ● Machine-to-Machine Critical Asset Monitoring & Control (“M2M”) (formerly Power Generation Monitoring). The M2M segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications. These activities are performed through the Company’s OmniMetrix subsidiary.

  

During 2014, each of the abovementioned activities represented a reportable segment. In addition, our “Other” segment represents certain IT activities (protocol management software for cancer patients and billing software) and outsourced consulting activities performed by our DSIT subsidiary as well as PM activities (for remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies) in our OmniMetrix subsidiary, that do not meet the quantitative thresholds and which may be combined for reporting under applicable accounting principles.

 

The Company’s reportable segments are strategic business units, offering different products and services and are managed separately as each business requires different technology and marketing strategies. Similar operating segments are aggregated into one reportable segment.

 

Previously, the Company reported USSI’s activities in its Oil and Gas Sensor Systems segment which developed and produced fiber optic sensing systems for the energy and security markets. With the suspension of operations at USSI (see Notes 3 and 21), its activities are reflected as discontinued operations.

    

(b) Information about Profit or Loss and Assets

 

The accounting policies of all the segments are those described in the summary of significant accounting policies. The Company evaluates performance based on net income or loss before taxes.

 

The Company does not systematically allocate assets to the divisions of the subsidiaries constituting its consolidated group, unless the division constitutes a significant operation. Accordingly, where a division of a subsidiary constitutes a segment that does not meet the quantitative thresholds of applicable accounting principles, depreciation expense is recorded against the operations of such segment, without allocating the related depreciable assets to that segment. However, where a division of a subsidiary constitutes a segment that does meet the quantitative thresholds, related depreciable assets, along with other identifiable assets, are allocated to such division. 

 

The following tables represent segmented data for the years ended December 31, 2014 and 2013:

 

    Energy & Security Sonar Solutions     GridSense     M2M     Other     Total  
Year ended December 31, 2014:                                        
Revenues from external customers   $ 11,200     $ 4,493     $ 2,174     $ 1,693     $ 19,560  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     3,272       1,297       1,182       888       6,638  
Impairment of goodwill and intangibles     —       1,773       —       —       1,773  
Restructuring and related charges     —       198       76       20       294  
Depreciation and amortization     287       242       69       48       646  
Segment income (loss) before income taxes     (414 )     (4,831 )     (1,698 )     99       (6,844 )
Segment assets     12,118       3,680       1,663       797       18,258  
Expenditures for segment assets     278       6       —       44       328  
                                         
Year ended December 31, 2013:                                        
Revenues from external customers     11,815       5,026       1,671       1,776       20,288  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     3,817       1,828       867       991       7,503  
Impairment of goodwill and intangibles     —       —       5,341       1,390       6,731  
Restructuring and related charges     —       594       —       —       594  
Depreciation and amortization     247       342       336       128       1,053  
Segment loss before income taxes     (243 )     (4,336 )     (9,492 )     (2,046 )     (16,117 )
Segment assets     11,219       6,400       2,300       870       20,789  
Expenditures for segment assets     333       14       750       295       1,392  

  

(c) The following tables represent a reconciliation of the segment data to consolidated statement of operations and balance sheet data for the years ended and as of December 31, 2013 and 2014:

 

    Year ended
December 31,		  
    2013     2014  
Total net loss before income taxes for reportable segments   $ (14,071 )   $ (6,943 )
Other operational segment net income (loss) before income taxes     (2,046 )     99  
Segment loss before income taxes     (16,117 )     (6,844 )
Unallocated net income (cost) of DSIT headquarters     (53 )     109  
Unallocated net cost of corporate headquarters*     (5,016 )     (3,560 )
Consolidated net loss before taxes on income   $ (21,186 )   $ (10,295 )

  

* Includes $926 and $830 of stock compensation expense for the years ending December 31, 2013 and 2014, respectively.

 

    As of December 31,  
    2013     2014  
Assets:                  
Total assets for reportable segments     $ 20,789     $ 18,258  
Assets of discontinued operations       8,081       143  
Unallocated assets of DSIT headquarters       5,519       5,897  
Unallocated assets of OmniMetrix headquarters       640       507  
Assets of corporate headquarters *       15,927       4,738  
Total consolidated assets     $ 50,956     $ 29,543  

 

* Includes $15,829 and $4,672 of unrestricted cash at December 31, 2013 and 2014, respectively.

 

 

     Segment
Totals  		     Adjustments     Consolidated Totals  
Other Significant Items                  
Year ended December 31, 2014                        
Depreciation and amortization   $ 646     $ 2     $ 648  
Expenditures for assets     328       65       393  
Year ended December 31, 2013                        
Depreciation and amortization   $ 1,053     $ 19     $ 1,072  
Expenditures for assets*     1,392       76       1,468  

 

Other reconciling items are primarily unallocated DSIT and corporate headquarters data which are not included in the segment information. None of the other adjustments are significant.

 

    Year ended  December 31,  
    2013     2014  
 Revenues based on location of customer:                  
 United States     $ 4,460     $ 5,279  
 Israel       8,164       7,155  
 Asia       5,908       4,406  
 Oceania       1,589       1,725  
 Other       167       995  
    $ 20,288     $ 19,560  

       

    December 31,  
    2013     2014  
Long-lived assets located in the following countries:                
United States   $ 564     $ 442  
Israel     582       638  
    $ 1,146     $ 1,080  

 

(d) Revenues from Major Customers

 

        Consolidated Revenues  
        2013     2014  
Customer   Segment   Revenues     % of Total Revenues      Revenues     % of Total Revenues    
A   Energy & Security Sonar Solutions   $ 2,336       12 %   $ 284       1 %
B   Energy & Security Sonar Solutions   $ 2,948       15 %   $ 1,940       10 %
C   Energy & Security Sonar Solutions   $ 1,077       5 %   $ 3,997       20 %
D   Energy & Security Sonar Solutions   $ 992       5 %   $ 1,848       9 %