Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.21.2
Operating Segments
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Operating Segments

11. Operating Segments

 

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 nine months ended September 30, 2021 and 2020 (in thousands).

 

Segment Reporting for the Quarter Ended September 30, 2021

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 8,893     $ 6,904        —     $ 15,797     $  —     $ 15,797  
Intercompany revenues     220       5        —       225        —        —  
Gross profit (negative gross profit)     2,487       (263 )      —       2,224        —       2,224  
Research and development     52       18       162       232       11       243  
Interest income      —        —        —        —       2       2  
Interest expense     (51 )     (1 )      —       (52 )     (25 )     (77 )
Interest expense-financing fees      —        —        —        —       (11 )     (11 )
Depreciation and amortization     319       85        —       404       5       409  
Segment income (loss) before income taxes     1,317       (984 )     (162 )     171       (1,626 )     (1,455 )
Income tax expense (benefit)     1        —        —       1       (2,837 )     (2,836 )(5)
Segment income (loss)     1,316       (984 )     (162 )     170       1,211       1,381  
Expenditures for segment assets     482        —        —       482        —       482 (2)

 

Segment Reporting for the Quarter Ended September 30, 2020

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 7,066     $ 23,106        —     $ 30,172     $  —     $ 30,172  
Intercompany revenues     226       6        —       232        —        —  
Gross profit     1,094       3,656        —       4,750        —       4,750  
Research and development     49       7       81       137       20       157  
Interest income      —        —        —        —       28       28  
Interest expense     (34 )     (3 )      —       (37 )     (50 )     (87 )
Interest expense-financing fees      —        —        —        —       (58 )     (58 )
Depreciation and amortization     373       97        —       470       8       478  
Segment income (loss) before income taxes     280       2,813       (81 )     3,012       (1,664 )     1,348  
Income tax (benefit) expense     (170 )     2        —       (168 )     35       (133 )
Segment income (loss)     450       2,811       (81 )     3,180       (1,699 )     1,481  
Expenditures for segment assets     95       24        —       119       3       122 (3)

 

Segment Reporting for the Nine Months Ended September 30, 2021

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 24,094     $ 30,981        —     $ 55,075     $  —     $ 55,075  
Intercompany revenues     1,199       44        —       1,243        —        —  
Gross profit     4,845       701        —       5,546        —       5,546  
Research and development     142       50       311       503       35       538  
Interest income      —        —        —        —       23       23  
Interest expense     (88 )     (9 )      —       (97 )     (112 )     (209 )
Interest expense-financing fees      —        —        —        —       (28 )     (28 )
Depreciation and amortization     939       255        —       1,194       14       1,208  
Segment income (loss) before income taxes     1,669       (1,721 )     (311 )     (363 )     987 (4)     624  
Income tax (benefit) expense     (13 )     10        —       (3 )     (2,837 )     (2,840 )(5)
Segment income (loss)     1,682       (1,731 )     (311 )     (360 )     3,824       3,464  
Expenditures for segment assets     1,109       14        —       1,123       9       1,132 (2)

 

Segment Reporting for the Nine Months Ended September 30, 2020

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 24,469     $ 52,610        —     $ 77,079     $  —     $ 77,079  
Intercompany revenues     879       19        —       898        —        —  
Gross profit     5,533       7,167        —       12,700        —       12,700  
Research and development     194       119       221       534       64       598  
Interest income     1        —        —       1       111       112  
Interest expense     (80 )     (13 )      —       (93 )     (213 )     (306 )
Interest expense-financing fees      —        —        —        —       (187 )     (187 )
Depreciation and amortization     912       259        —       1,171       18       1,189  
Segment income (loss) before income taxes     2,577       5,162       (221 )     7,518       (4,597 )     2,921  
Income tax (benefit) expense     (165 )     2        —       (163 )     35       (128 )
Segment income (loss)     2,742       5,160       (221 )     7,681       (4,632 )     3,049  
Expenditures for segment assets     1,095       385        —       1,480       8       1,488 (3)

 

 

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

 

(2) Net of financed amount of $271,000 and $348,000 for the three and nine months ended September 30, 2021, respectively.

 

(3) Net of financed amount of $751,000 and $883,000 for the three and nine months ended September 30, 2020, respectively.

 

(4) 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).

 

(5) Includes tax benefit recorded in amount of approximately $2,351,000 resulting from release of valuation allowance on the Company’s deferred tax assets (see “Note 12 – Income Taxes” below a discussion of this tax benefit).