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Segment Reporting
 6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting

NOTE 12—SEGMENT REPORTING

 

The Company currently operates in two reportable operating segments, both of which are performed though the Company’s OmniMetrix subsidiary:

 

  ● Power Generation (“PG”) monitoring (formerly known as Machine-to-Machine Critical Asset Monitoring & Control). The PG segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications.
     
  ● Corrosion Protection (“CP”) monitoring. The CP segment provides for remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

 

In addition, up to the closing of the DSIT Transaction (see Note 3), the Company reported its activities in the Energy & Security Sonar Solutions segment. This segment, whose activities were performed by DSIT, provides 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. “Other” operations include certain IT activities (protocol management software for cancer patients and billing software) and outsourced consulting activities performed by the Company’s DSIT subsidiary that did not meet the quantitative thresholds under applicable accounting principles.

 

Following the closing of the DSIT Transaction, the Company is no longer consolidating the results of DSIT, but rather is reporting on its investment in DSIT on the equity method. Accordingly, effective April 22, 2016, the Company no longer consolidates the results of DSIT’s Energy & Security Sonar Solutions segment or the activities of its “Other” segment.

 

Previously, the Company reported GridSense’s activities in its Smart Grid Distribution Automation segment which developed and produced fiber optic sensing systems for the energy and security markets. With the suspension of operations at GridSense (see Note 4(a)), its activities are reflected as discontinued operations.

 

    PG     CP    

Energy &

Security

Sonar

Solutions*

     Other*     Total  
Six months ended June 30, 2016                                        
Revenues from external customers   $ 1,263     $ 339     $ 4,620     $ 454     $ 6,676  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     585       197       1,517       114       2,413  
Depreciation and amortization     32       8       53       10       103  
Segment net income (loss) before income taxes     (712 )     (61 )     82       (10 )     (701 )
                                         
Six months ended June 30, 2015                                        
Revenues from external customers   $ 1,113     $ 250     $ 5,748     $ 704     $ 7,815  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     634       182       1,790       305       2,911  
Depreciation and amortization     35       8       90       14       147  
Segment net loss before income taxes     (700 )     (124 )     (204 )     137       (891 )
                                         
Three months ended June 30, 2016                                        
Revenues from external customers   $ 596     $ 165     $ 1,038     $ 116     $ 1,915  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     252       105       384       41       782  
Depreciation and amortization     16       4       10       2       32  
Segment net income (loss) before income taxes     (473 )     (48 )     15       3       (503 )
                                         
Three months ended June 30, 2015                                        
Revenues from external customers   $ 560     $ 130     $ 3,088     $ 327     $ 4,105  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     294       84       1,185       106       1,669  
Depreciation and amortization     17       4       45       7       73  
Segment net loss before income taxes     (422 )     (119 )     90       27       (424 )

 

* Results for the six months ended June 30, 2016, only includes results for the period January 1, 2016 to April 21, 2016. Results for the three months ended June 30, 2016, only includes results for the period April 1, 2016 to April 21, 2016. See Note 3.

 

Reconciliation of Segment Income (Loss) to Consolidated Net Loss Before Income Taxes

 

    Six months ended
June 30,		     Three months ended
June 30,		  
    2015     2016     2015     2016  
Total net loss before income taxes for reportable segments   $ (1,028 )   $ (691 )   $ (451 )   $ (506 )
Other operational segment net income (loss) before income taxes     137       (10 )     27       3  
Total segment net loss before income taxes     (891 )     (701 )     (424 )     (503 )
Unallocated cost of corporate headquarters*     (1,890 )     (1,983 )     (856 )     (564 )
Unallocated benefit (cost) of DSIT headquarters**     (67 )     61       (78 )     76  
Consolidated loss before income taxes   $ (2,848 )   $ (2,623 )   $ (1,358 )   $ (991 )

 

* Includes stock compensation expense of $376 and $234 for the six month periods ended June 30, 2015 and 2016 and $168 and $14 for the three month periods ended June 30, 2015 and 2016, respectively. The six month period ended June 30, 2016 also includes $460 of salary and associated costs and medical insurance associated with the resignation of Mr. Moore and $502 of interest expense to Leap Tide and directors. The three month period ended June 30, 2016 includes $252 of interest expense to Leap Tide.

 

** Results for the six months ended June 30, 2016, only includes results for the period January 1, 2016 to April 21, 2016. Results for the three months ended June 30, 2016, only includes results for the period April 1, 2016 to April 21, 2016. See Note 3.