Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.21.2
Operating Segments
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Operating Segments

11. Operating Segments

 

In accordance with ASC 280, “Segment Reporting”, the Company defines an operating segment as a business activity: (1) from which we may earn revenue and incur expenses; (2) whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and (3) for which discrete financial information is available.

 

Our reporting segments are defined as below:

 

TREATMENT SEGMENT, which includes:

 

  - nuclear, low-level radioactive, mixed waste (containing both hazardous and low-level radioactive constituents), hazardous and non-hazardous waste treatment, processing and disposal services primarily through four uniquely licensed and permitted treatment and storage facilities; and
     
  - Research & Development (“R&D”) activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.

 

 

SERVICES SEGMENT, which includes:

 

  - Technical services, which include:

 

  ○ professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering;
  ○ health physics services including health physicists, radiological engineers, nuclear engineers and health physics technicians support to government and private radioactive materials licensees;
  ○ integrated Occupational Safety and Health services including industrial hygiene (“IH”) assessments; hazardous materials surveys, e.g., exposure monitoring; lead and asbestos management/abatement oversight; indoor air quality evaluations; health risk and exposure assessments; health & safety plan/program development, compliance auditing and training services; and Occupational Safety and Health Administration (“OSHA”) citation assistance;
  ○ global technical services providing consulting, engineering (civil, nuclear, mechanical, chemical, radiological and environmental), project management, waste management, environmental, and decontamination and decommissioning field, technical, and management personnel and services to commercial and government customers; and
  ○ waste management services to commercial and governmental customers.

 

  - Nuclear services, which include:

 

  ○ decontamination and decommissioning (“D&D”) of government and commercial facilities impacted with radioactive material and hazardous constituents including engineering, technology applications, specialty services, logistics, transportation, processing and disposal;
  ○ license termination support of radioactive material licensed and federal facilities over the entire cycle of the termination process: project management, planning, characterization, waste stream identification and delineation, remediation/demo, final status survey, compliance demonstration, reporting, transportation, disposal and emergency response.

 

  - A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.
  - A company owned gamma spectroscopy laboratory for the analysis of oil and gas industry solids and liquids.

 

MEDICAL SEGMENT, which is currently involved on a limited basis in the R&D of the Company’s medical isotope production technology, has not generated any revenue and has substantially reduced its R&D costs and activities due to the need for capital to fund these activities. The Company anticipates that the Medical Segment will not resume full R&D activities until the necessary capital is obtained through its own credit facility or additional equity raise, or obtains partners willing to provide funding for its R&D.

 

Our reporting segments exclude our corporate headquarters and our discontinued operations (see “Note 10 – Discontinued Operations”) which do not generate revenues.

 

 

The table below presents certain financial information of our operating segments for the three and six months ended June 30, 2021 and 2020 (in thousands):

 

Segment Reporting for the Quarter Ended June 30, 2021

 

      Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 7,706     $ 8,439       —     $ 16,145     $ —     $ 16,145  
Intercompany revenues     319       32       —       351       —       —  
Gross profit (negative gross profit)     1,433       (467 )     —       966       —       966  
Research and development     43       19       72       134       10       144  
Interest income     —       —       —       —       2       2  
Interest expense     (18 )     —       —       (18 )     (47 )     (65 )
Interest expense-financing fees     —       —       —       —       (9 )     (9 )
Depreciation and amortization     310       85       —       395       5       400  
Segment income (loss) before income taxes     471       (1,292 )     (72 )     (893 )     4,027 (2)     3,134  
Income tax expense     3       10       —       13       —       13  
Segment income (loss)     468       (1,302 )     (72 )     (906 )     4,027       3,121  
Expenditures for segment assets     270       10       —       280       9       289 (3)

 

Segment Reporting for the Quarter Ended June 30, 2020

 

      Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 7,840     $ 14,207       —     $ 22,047     $ —     $ 22,047  
Intercompany revenues     446       5       —       451       —       —  
Gross profit     1,695       1,615       —       3,310       —       3,310  
Research and development     52       46       74       172       37       209  
Interest income     1       —       —       1       27       28  
Interest expense     (28 )     (4 )     —       (32 )     (67 )     (99 )
Interest expense-financing fees     —       —       —       —       (60 )     (60 )
Depreciation and amortization     275       84       —       359       5       364  
Segment income (loss) before income taxes     750       1,031       (74 )     1,707       (1,456 )     251  
Income tax benefit     (9 )     —       —       (9 )     —       (9 )
Segment income (loss)     759       1,031       (74 )     1,716       (1,456 )     260  
Expenditures for segment assets     320       146       —       466       2       468 (4)

 

Segment Reporting for the Six Months Ended June 30, 2021

 

      Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 15,201     $ 24,077       —     $ 39,278     $ —     $ 39,278  
Intercompany revenues     979       39       —       1,018       —       —  
Gross profit     2,358       964       —       3,322       —       3,322  
Research and development     90       32       149       271       24       295  
Interest income     —       —       —       —     21       21  
Interest expense     (37 )     (8 )     —       (45 )     (87 )     (132 )
Interest expense-financing fees     —       —       —       —       (17 )     (17 )
Depreciation and amortization     620       170       —       790       9       799  
Segment income (loss) before income taxes     352       (737 )     (149 )     (534 )     2,613 (2)     2,079  
Income tax (benefit) expense     (14 )     10       —       (4 )     —       (4 )
Segment income (loss)     366       (747 )     (149 )     (530 )     2,613       2,083  
Expenditures for segment assets     627       14       —       641       9       650 (3)

 

Segment Reporting for the Six Months Ended June 30, 2020

 

      Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 17,403     $ 29,504       —     $ 46,907     $ —     $ 46,907  
Intercompany revenues     653       13       —       666       —       —  
Gross profit     4,440       3,510       —       7,950       —       7,950  
Research and development     145       112       140       397       44       441  
Interest income     1       —       —       1       83       84  
Interest expense     (46 )     (10 )     —       (56 )     (163 )     (219 )
Interest expense-financing fees     —       —       —       —       (129 )     (129 )
Depreciation and amortization     539       162       —       701       10       711  
Segment income (loss) before income taxes     2,297       2,349       (140 )     4,506       (2,933 )     1,573  
Income tax expense     5       —       —       5       —       5  
Segment income (loss)     2,292       2,349       (140 )     4,501       (2,933 )     1,568  
Expenditures for segment assets     1,000       361       —       1,361       5       1,366 (4)

 

(1) Amounts reflect the activity for corporate headquarters not included in the segment information.

 

(2) Amounts includes approximately $5,381,000 of “Gain on extinguishment of debt” recorded in connection with the Company’s PPP Loan which was forgiven by the SBA effective June 15, 2021 (see “Note 8 – Long Term Debt – PPP Loan” for information of this loan forgiveness).

 

(3) Net of financed amount of $0 and $29,000 for the three and six months ended June 30, 2021, respectively.

 

(4) Net of financed amount of $51,000 and $132,000 for the three and six months ended June 30, 2020, respectively.