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Segment Reporting and Geographic Information
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Segment Reporting and Geographic Information

NOTE 19—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

 

(a) General Information

 

As of December 31, 2015, 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 GridSense Inc. subsidiary ("GridSense") which develops, 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 2015, 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.

 

(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, 2015 and 2014:

 

    Energy & Security Sonar Solutions     GridSense     M2M     Other     Total  
Year ended December 31, 2015:                                        
Revenues from external customers   $ 12,093     $ 2,507     $ 2,513     $ 1,942     $ 19,055  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     3,834       20       1,472       861       6,187  
Impairment of goodwill and intangibles     —       1,562       —       —       1,562  
Restructuring and related charges     —       —       —       —       —  
Depreciation and amortization     185       158       70       42       455  
Segment income (loss) before income taxes     (195 )     (3,921 )     (1,437 )     104       (5,449 )
Segment assets     15,777       1,107       1,691       739       19,314  
Expenditures for segment assets     114       5       --       18       137  
                                         
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 loss before income taxes     (414 )     (4,831 )     (1,698 )     99       (6,844 )
Segment assets     13,367       3,680       1,663       865       19,575  
Expenditures for segment assets     278       6       —       44       328  

 

 

(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, 2014 and 2015:

 

    Year ended
December 31,		  
    2014     2015  
Total net loss before income taxes for reportable segments   $ (6,943 )   $ (5,553 )
Other operational segment net income (loss) before income taxes     99       104  
Segment loss before income taxes     (6,844 )     (5,449 )
Unallocated net income (cost) of DSIT headquarters     109       120  
Unallocated net cost of corporate headquarters*     (3,560 )     (4,029 )
 Consolidated net loss before taxes on income   $ (10,295 )   $ (9,358 )

 

* Includes $830 and $582 of stock compensation expense for the years ended December 31, 2014 and 2015, respectively. In the year ended December 31, 2015, includes $225 of interest expense associated with the LT Loan (see Note 3).

 

    As of December 31,  
    2014       2015  
Assets:                
Total assets for reportable segments   $ 18,710     $ 18,575  
Total assets of other operational segment     865       739  
Assets of discontinued operations     143       —  
Unallocated assets of DSIT headquarters     4,580       4,367  
Unallocated assets of OmniMetrix headquarters     507       397  
Assets of corporate headquarters *     4,738       252  
Total consolidated assets   $ 29,543     $ 24,330  

 

* Includes $4,672 and $84 of unrestricted cash at December 31, 2014 and 2015, respectively.

 

Other Significant Items   Segment Totals     Adjustments     Consolidated Totals  
Year ended December 31, 2015                        
Depreciation and amortization   $ 455       17       472  
Expenditures for assets     137       27       164  
Year ended December 31, 2014                        
Depreciation and amortization   $ 646     $ 2     $ 648  
Expenditures for assets     328       65       393  

 

Other adjustments 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,

  
    2014     2015  
Revenues based on location of customer:                
United States   $ 5,279     $ 4,900  
Israel     7,155       7,699  
Asia     4,406       5,587  
Oceania     1,725       548  
Other     995       321  
    $ 19,560     $ 19,055  

 

    December 31,  
    2014     2015  
Long-lived assets located in the following countries:                
United States   $ 442     $ 322  
Israel     638       655  
    $ 1,080     $ 977  

 

(d) Revenues, Accounts Receivable and Unbilled Revenue Balances from Major Customers

 

All significant revenue, accounts receivable and unbilled revenue balances are with respect to customers in the Energy & Security Sonar Solutions segment.

 

      Revenue     Accounts Receivable     Unbilled Revenue  
      2014     2015     2014     2015     2014     2015  
Customer     Balance     %     Balance     %     Balance     %     Balance     %     Balance     %     Balance     %  
A       *       *     $ 2,701       14 %     *       *       *       *       *       *       *       *  
B     $ 3,997       20 %   $ 2,735       14 %   $ 1,135       23 %   $ 1,844       28 %   $ 2,788       35 %   $ 1,507       39 %
C       *       *     $ 2,889       15 %     *       *     $ 1,049       16 %     *       *     $ 1,087       28 %
D     $ 1,940       10 %   $ 2,200       12 %     *       *     $ 834       12 %   $ 1,402       18 %     *       *  
E       *       *       *       *       *       *     $ 1,112       17 %   $ 979       12 %     *       *  
F       *       *       *       *       *       *       *       *       *       *     $ 408       11 %
G       *       *       *       *       *       *       *       *     $ 1,266       16 %     *       *  

 

* Balance is not significant