XML 38 R25.htm IDEA: XBRL DOCUMENT

Segment Reporting and Geographic Information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

NOTE 19—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

(a) General Information

As of December 31, 2017, the Company operates in two reportable operating segments, both of which are performed though the Company’s OmniMetrix subsidiary:

	●	The PG segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications.

	●	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 2016 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 2016 DSIT Transaction, the Company no longer consolidates the results of DSIT, but rather reports 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.

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, 2017 and 2016:

		PG				CP				Energy & Security Sonar Systems*				Other*				Total
Year ended December 31, 2017:
Revenues from external customers		$	3,355			$	995			$	—			$	—			$	4,350
Intersegment revenues			—				—				—				—				—
Segment gross profit			2,017				430				—				—				2,447
Depreciation and amortization			58				17				—				—				75
Segment loss before income taxes			(531	)			(340	)			—				—				(871	)
Segment assets			1,398				1,446				—				—				2,844
Expenditures for segment assets			—				—				—				—				—

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

(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, 2017 and 2016:

		Year ended December 31,
		2017				2016
Total net loss before income taxes for reportable segments		$	(871	)		$	(1,118	)
Other operational segment net loss before income taxes			—				(10	)
Segment loss before income taxes			(871	)			(1,128	)
Gain on sale of interest in DSIT, net of transaction costs			—				3,543
Unallocated net income (cost) of DSIT headquarters*			—				6
Unallocated net cost of corporate headquarters**			(1,271	)			(2,491	)
Consolidated net loss before taxes on income		$	(2,142	)		$	(82	)

* 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 $22 and $89 of stock compensation expense for the years ended December 31, 2017 and 2016, respectively. Also includes $446 of interest expense associated with the LT Loan for the year ended December 31, 2016 (see Note 5) $107 and $56 of interest expense with respect to director loans for the years ended December 31, 2017 and 2016, respectively (See Note 18).

		As of December 31,
		2017				2016
Assets:
Total assets for reportable segments		$	2,844			$	2,552
Assets of discontinued operations			—				119
Unallocated assets of OmniMetrix headquarters			87				213
Assets of corporate headquarters *			6,291				6,356
Total consolidated assets		$	9,222			$	9,240

* Includes the investment in DSIT of $5,800 at December 31, 2017. Includes the investment in DSIT of $5,658 and the escrow deposit of $579 from the 2016 DSIT Transaction at December 31, 2016.

Other Significant Items		Segment Totals				Adjustments				Consolidated Totals
Year ended December 31, 2017
Depreciation and amortization		$	75			$	—			$	75
Year ended December 31, 2016
Depreciation and amortization		$	143			$	3			$	146
Expenditures for assets			33				—				33

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,
		2017				2016
Revenues based on location of customer:
United States		$	4,327			$	3,550
Israel			—				3,061
Asia			—				2,013
Other			23				35
		$	4,350			$	8,659

All of the Company’s long-lived assets are located in the United States.

(d) Revenues and Accounts Receivable Balances from Major Customers

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

		Revenue																Accounts Receivable**
		2017								2016								2017								2016
Customer		Balance				%				Balance				%				Balance				%				Balance								%
A		$	—				—	%		$	1,828				21	%			*				*								*				*
B		$	—				—	%		$	1,295				15	%			*				*				$				*				*	%
C			*				*				*				*			$	297				27	%							283				28

* Balance is not significant

** Following the closing of the 2016 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.