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SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 10— SEGMENT REPORTING

 

As of September 30, 2025, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:

 

  ● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment. This includes OmniMetrix’s TrueGuard power generator monitors and AIRGuard product, which remotely monitors and controls industrial air compressors, and its Smart Annunciator product, which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touchscreen display that indicates the current state of that generator.
     
  ● Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RADTM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.

 

 

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.

 

The CODM is the Company’s Chief Executive Officer (CEO).

 

The accounting policies of all the segments are those described in Note 2, Accounting Policies. The Company evaluates performance by segment based on revenue (driven by the number of connections), gross profit and 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. Further, the CODM does not review the assets by segment.

 

Segment expenses that are routinely provided to the CODM are COGS and R&D expense. R&D expense may be allocated to each segment based on the percentage of segment revenue to total revenue or based on estimated time on dedicated projects within the segment. SG&A expense and interest income is allocated to each segment based on the percentage of segment revenue to total revenue instead of being specifically identified to each segment since the Company’s resources have a high level of shared utilization between the segments.

 

The following tables represent segmented data for the nine- and three-month periods ended September 30, 2025 and 2024 (in thousands):

 

   PG   CP   Total 
Nine months ended September 30, 2025:               
Revenues from external customers  $8,507   $594   $9,101 
COGS   1,976    215    2,191 
Segment gross profit   6,531    379    6,910 
R&D expense   767    56    823 
SG&A expense   3,024    221    3,245 
Segment operating income   2,740    102    2,842 
Interest income, net   76    6    82 
Segment income before income taxes  $2,816   $108   $2,924 
                
Nine months ended September 30, 2024:               
Revenues from external customers  $6,681   $776   $7,457 
COGS   1,693    321    2,014 
Segment gross profit   4,988    455    5,443 
R&D expense   565    133    698 
SG&A expense   2,567    314    2,881 
Segment operating income   1,856    8    1,864 
Interest income, net   46    5    51 
Segment income before income taxes  $1,902   $13   $1,915 

 

   PG   CP   Total 
Three months ended September 30, 2025:               
Revenues from external customers  $2,260   $218   $2,478 
COGS   451    82    533 
Segment gross profit   1,809    136    1,945 
R&D expense   243    24    267 
SG&A expense   999    73    1,072 
Segment operating income   567    39    606 
Interest income, net   30    3    33 
Segment income before income taxes  $597   $42   $639 
                
Three months ended September 30, 2024:               
Revenues from external customers  $2,826   $224   $3,050 
COGS   772    91    863 
Segment gross profit   2,054    133    2,187 
R&D expense   217    17    234 
SG&A expense   888    71    959 
Segment operating income   949    45    994 
Interest income, net   17    1    18 
Segment income before income taxes  $966   $46   $1,012 

 

 

Reconciliation of Segment Income to Consolidated Net Income Before Income Taxes

 

   2025   2024   2025   2024 
  

Nine months ended

September 30,

  

Three months ended

September 30,

 
   2025   2024   2025   2024 
   (in thousands) 
Total net income before income taxes for reportable segments  $2,924   $1,915   $639   $1,012 
Unallocated cost of corporate headquarters   (1,129)   (770)   (446)   (236)
Consolidated net income before income taxes  $1,795   $1,145   $193   $776