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Segment Reporting and Geographic Information
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Segment Reporting and Geographic Information

NOTE 20—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

 

(a) General Information

 

As of December 31, 2016, the Company 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 21, 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.

 

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.

 

(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, 2016 and 2015:

 

    PG     CP     Energy & Security Sonar Systems*     Other*     Total  
Year ended December 31, 2016:                                        
Revenues from external customers   $ 2,903     $ 682     $ 4,620     $ 454     $ 8,659  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     1,516       378       1,517       114       3,525  
Depreciation and amortization     65       15       53       10       143  
Segment income (loss) before income taxes     (848 )     (352 )     82       (10 )     (1,128 )
Segment assets     1,673       879       —       —       2,552  
Expenditures for segment assets     —       —       30       3       33  
                                         
Year ended December 31, 2015:                                        
Revenues from external customers   $ 2,513     $ 534     $ 12,093     $ 1,408     $ 16,548  
Intersegment revenues     —       —       —       —       —  
Segment gross profit     1,472       319       3,834       542       6,167  
Depreciation and amortization     70       15       185       27       297  
Segment income (loss) before income taxes     (1,437 )     (116 )     (195 )     220       (1,528 )
Segment assets     1,691       298       15,777       440       18,206  
Expenditures for segment assets     —       —       114       18       132  

 

(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, 2016 and 2015:

 

    Year ended
December 31,		  
    2016     2015  
Total net loss before income taxes for reportable segments   $ (1,118 )   $ (1,748 )
Other operational segment net income (loss) before income taxes     (10 )     220  
Segment loss before income taxes     (1,128 )     (1,528 )
Gain on sale of interest in DSIT, net of transaction costs     3,543       --  
Unallocated net income (cost) of DSIT headquarters*     (6 )     120  
Unallocated net cost of corporate headquarters**     (2,491 )     (4,089 )
Consolidated net loss before taxes on income   $ (82 )   $ (5,497 )

 

* Results for the year ended December 31, 2016, only include DSIT’s results for the period January 1, 2016 to April 21, 2016. See Note 3.

 

** Includes $89 and $582 of stock compensation expense for the years ended December 31, 2016 and 2015, respectively. Also includes $446 and $225 of interest expense associated with the LT Loan for the years ended December 31, 2016 and 2015, respectively (see Note 5).

 

    As of December 31,  
    2016      2015  
Assets:            
Total assets for reportable segments   $ 2,552     $ 17,765  
Total assets of other operational segment     —       441  
Assets of discontinued operations     119       1,108  
Unallocated assets of DSIT headquarters     —       4,367  
Unallocated assets of OmniMetrix headquarters     213       397  
Assets of corporate headquarters *     6,356       252  
Total consolidated assets   $ 9,240     $ 24,330  

 

* Includes the investment in DSIT of $5,658 and the escrow deposit of $579 from the DSIT Transaction at December 31, 2016.

 

Other Significant Items   Segment Totals     Adjustments     Consolidated Totals  
Year ended December 31, 2016                        
Depreciation and amortization   $ 143     $ 3     $ 146  
Expenditures for assets     33       —       33  
Year ended December 31, 2015                        
Depreciation and amortization   $ 297     $ 17     $ 314  
Expenditures for assets     132       27       159  

 

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,

  
    2016     2015  
Revenues based on location of customer:            
United States   $ 3,550     $ 3,019  
Israel     3,061       7,699  
Asia     2,013       5,587  
Other     35       243  
    $ 8,659     $ 16,548  

 

    December 31,  
    2016     2015  
Long-lived assets located in the following countries:                
United States   $ 214     $ 299  
Israel     —       655  
    $ 214     $ 954  

 

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

 

Customers A – G are all related to DSIT’s Energy & Security Sonar Solutions segment. Customer G is related to OmniMetrix’s CP segment.

 

    Revenue     Accounts Receivable**     Unbilled
Revenue**		  
    2016     2015     2016     2015     2015  
Customer   Balance     %     Balance     %     Balance     %     Balance     %     Balance     %  
A   $ 1,828       21 %   $ 2,701       14 %     *       *       *       *       *       *  
B   $ *       *     $ 2,735       14 %     *       *     $ 1,844       28 %   $ 1,507       39 %
C     *       *     $ 2,889       15 %     *       *     $ 1,049       16 %     1,087       28 %
D   $ 1,295       15 %   $ 2,200       12 %     *       *     $ 834       12 %   $ *       *  
E     *       *       *       *       *       *     $ 1,112       17 %   $ *       *  
F     *       *       *       *       *       *       *       *       408       11 %
G     *       *       *       *     $ 283       28 %     *       *     $ *       *  

 

* Balance is not significant

** Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Accounts Receivable or Unbilled Revenue balances.