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Segments and Geographic Information
9 Months Ended
Sep. 30, 2011
Segments and Geographic Information [Abstract] 
SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 9. SEGMENTS AND GEOGRAPHIC INFORMATION

The Company has two reportable segments: product-based sales featuring pool lighting and general commercial lighting, each of which markets and sells lighting systems, and solutions-based sales providing turnkey, high-quality, energy-efficient lighting application alternatives. The Company’s products are sold through a combination of direct sales employees, independent sales representatives, and various distributors in different geographic markets throughout the world. The Company’s solutions-based sales are designed to enhance total value by positively impacting customers’ profitability, the environment, and the communities it serves. These solutions are sold through our direct sales employees as well as our SRC subsidiary, and include not only the Company’s proprietary energy-efficient lighting solutions, but also sourced lighting systems, energy audits, and service agreements.

The following summarizes the Company’s reportable segment data for periods indicated (in thousands):

 

                                 
    Three months ended
September 30,		     Nine months ended
September 30,		  
    2011     2010     2011     2010  

Solutions:

                                

Net sales

   $  2,014     $  4,416     $  7,960     $  14,631  

Cost of sales

     1,686       3,657       6,686       11,995  
   

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     328       759       1,274       2,636  

Operating expenses (income):

                                

Sales and marketing

     311       425       1,032       1,048  

General and administrative

     231       397       706       1,080  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

     542       822       1,738       2,128  
   

 

 

    

 

 

    

 

 

    

 

 

  

Segment (loss) income

   $ (214 )    $ (63 )    $ (464 )    $ 508  
   

 

 

    

 

 

    

 

 

    

 

 

  

Products:

                                

Net sales

   $ 4,032     $ 4,633     $  11,739     $ 11,733  

Cost of sales

     3,145       3,530       9,091       9,544  
   

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

     887       1,103       2,648       2,189  

Operating expenses (income):

                                

Research and development

     (278 )      (22 )      (144 )      (101 ) 

Sales and marketing

     1,140       1,252       3,872       3,662  

General and administrative

     85       75       257       179  

Restructuring expense

     —         —         —         26  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

     947       1,305       3,985       3,766  
   

 

 

    

 

 

    

 

 

    

 

 

  

Segment loss

   $ (60 )    $ (202 )    $ (1,337 )    $ (1,577 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation of segment income (loss) to net loss:

                                

Segment income (loss):

                                

Solutions

   $ (214 )    $ (63 )    $ (464 )    $ 508  

Products

     (60 )      (202 )      (1,337 )      (1,577 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Total segment loss

     (274 )      (265 )      (1,801 )      (1,069 ) 

Operating expenses (income):

                                

Sales and marketing

     73       44       191       148  

General and administrative

     896       1,056       2,871       3,464  

Valuation of equity instruments

     —         53       56       1,803  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

     969       1,153       3,118       5,415  

Other expense

     (212 )      (144 )      (513 )      (457 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income taxes

     (1,455 )      (1,562 )      (5,432 )      (6,941 ) 

Provision for income taxes

     (4 )      (1 )      (13 )      (4 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net loss

   $ (1,459 )    $ (1,563 )    $ (5,445 )    $ (6,945 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

The following table provides additional business unit gross profitability detail for the Company’s products-based business segment for the periods indicated (in thousands):

 

                                 
   

Three months ended

September 30,

    

Nine months ended

September 30,

  
    2011     2010     2011     2010  

Products segment net sales:

                                

Pool and commercial products

   $ 3,127     $ 3,694     $ 9,149     $ 9,428  

Government products/R&D services

     905       939       2,590       2,305  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total products segment net sales

     4,032       4,633       11,739       11,733  
   

 

 

    

 

 

    

 

 

    

 

 

  

Products segment cost of sales:

                                

Pool and commercial products

     2,229       2,328       6,593       6,025  

Government products/R&D services

     916       925       2,498       2,286  

Unallocated manufacturing overhead

     —         277       —         1,233  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total products segment cost of sales

     3,145       3,530       9,091       9,544  
   

 

 

    

 

 

    

 

 

    

 

 

  

Products segment gross profit:

                                

Pool and commercial products

     898       1,366       2,556       3,403  

Government products/R&D services

     (11 )      14       92       19  

Unallocated manufacturing overhead

     —         (277 )      —         (1,233 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Total products segment gross profit

   $ 887     $ 1,103     $ 2,648     $ 2,189  
   

 

 

    

 

 

    

 

 

    

 

 

  

Unallocated manufacturing overhead is defined as follows:

 

  1) costs associated with the operation and shut down of the Solon manufacturing facility which has been relocated to the Mexico facility and

 

  2) specific expenses which are not attributable to a specific business unit but rather are calculated on the total products business segment. Expenses include Solon manufacturing facility rent, Solon manufacturing depreciation, inventory reserves and accruals and Solon manufacturing support payroll and severance.

A geographic summary of net sales is as follows (in thousands):

 

                                 
   

Three months ended

September 30,

    

Nine months ended

September 30,

  
    2011     2010     2011     2010  

United States

   $ 4,966     $ 8,048     $ 16,479     $ 23,595  

International

     1,080       1,001       3,220       2,769  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net sales

   $ 6,046     $ 9,049     $ 19,699     $ 26,364  
   

 

 

    

 

 

    

 

 

    

 

 

  

A geographic summary of long-lived assets, which consists of fixed assets, goodwill, and intangible assets, is as follows (in thousands):

 

                 
    September 30,
2011		     December 31,
2010		  

United States

   $ 3,999     $ 4,676  

International

     69       119  
   

 

 

    

 

 

  

Long-lived assets, net

   $ 4,068     $ 4,795