Quarterly report pursuant to Section 13 or 15(d)

Note 10 - Operating Segments

v3.7.0.1
Note 10 - Operating Segments
 6 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10
.
Operating Segments
 
In accordance with ASC
280,
“Segment Reporting”, the Company defines an operating segment as a business activity: (a) 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 reporting includes:
 
-
nuclear, low-level radioactive, mixed, hazardous and non-hazardous waste treatment, processing and disposal services primarily through
four
uniquely licensed and permitted treatment and storage facilities; and
 
-
R&D activities to identify, develop and implement innovative waste processing techniques for problematic waste streams.
 
SERVICES SEGMENT, which includes:
 
-
On-site waste management services to commercial and government customers;
 
-
Technical services, which include:
 
o
professional radiological measurement and site survey of large government and commercial installations using advanced methods, technology and engineering;
 
o
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;
 
o
global technical services providing consulting, engineering, project management, waste management, environmental, and decontamination and decommissioning field, technical, and management personnel and services to commercial and government customers;
 
-
Nuclear services, which include:
 
o
technology-based services including engineering, decontamination and decommissioning (“D&D”), specialty services and construction, logistics, transportation, processing and disposal;
 
o
remediation of nuclear licensed and federal facilities and the remediation cleanup of nuclear legacy sites. Such services capability includes: project investigation; radiological engineering; partial and total plant D&D; facility decontamination, dismantling, demolition, and planning; site restoration; site construction; logistics; transportation; and emergency response; and
 
-
A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) of health physics, IH and customized nuclear, environmental, and occupational safety and health (“NEOSH”) instrumentation.
 
MEDICAL SEGMENT reporting includes: R&D costs for the new medical isotope production technology from our majority-owned Polish subsidiary, PF Medical. The Medical Segment has
not
generated any revenue as it continues to be primarily in the R&D stage.
All costs incurred for the Medical Segment are reflected within R&D in the accompanying Consolidated Statements of Operations and consist primarily of employee salaries and benefits, laboratory costs,
third
party fees, and other related costs associated with the development of this new technology.
 
 
Our reporting segments exclude our corporate headquarters and our discontinued operations (see Note
9
– “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, 2017
and
2016
(in thousands).
 
Segment Reporting for the Quarter Ended
June 30, 2017
 
   
Treatment
    
Services
    
Medical
    
Segments
Total
    
Corporate
(1)
    
Consolidated
Total
  
Revenue from external customers
   $
9,630
    $
3,085
     
—
    $
12,715
    $
—
    $
12,715
 
Intercompany revenues
    
97
     
7
     
—
     
104
     
—
     
—
 
Gross profit
   
2,174
     
180
     
—
     
2,354
     
—
     
2,354
 
Research and development
    
62
     
—
     
550
     
612
     
7
     
619
 
Interest income
    
—
     
—
     
—
     
—
     
36
     
36
 
Interest expense
    
(18
 )    
—
     
—
     
(18
 )    
(72
 )    
(90
 )
Interest expense-financing fees
    
—
     
—
     
—
     
—
     
(9
 )    
(9
 )
Depreciation and amortization
    
988
     
135
     
—
     
1,123
     
10
     
1,133
 
Segment income (loss) before income taxes
    
1,238
     
(553
 )    
(550
 )    
135
     
(1,295
 )    
(1,160
 )
Income tax expense
   
65
     
—
     
—
     
65
     
1
     
66
 
Segment income (loss)
   
1,173
     
(553
 )    
(550
 )    
70
     
(1,296
 )    
(1,226
 )
Expenditures for segment assets
    
91
     
3
     
—
     
94
     
—
     
94
 
 
Segment Reporting for the Quarter Ended
June 30, 2016
 
   
Treatment
    
Services
    
Medical
    
Segments
Total
    
Corporate
(1)
    
Consolidated
Total
  
Revenue from external customers
   $
7,985
 
 
 $
6,824
     
—
    $
14,809
    $
—
    $
14,809
 
Intercompany revenues
    
6
 
 
  
10
     
—
     
16
     
—
     
—
 
Gross profit
   
582
 
 
  
1,234
     
—
     
1,816
     
—
     
1,816
 
Research and development
    
120
 
 
  
7
     
416
     
543
     
11
     
554
 
Interest income
    
2
 
 
  
—
     
—
     
2
     
29
     
31
 
Interest expense
    
(14
 )
 
  
—
     
—
     
(14
 )    
(94
 )    
(108
 )
Interest expense-financing fees
    
—
 
 
  
—
     
—
     
—
     
(29
 )    
(29
 )
Depreciation and amortization
    
705
 
 
  
160
     
—
     
865
     
47
     
912
 
Segment (loss) income before income taxes
    
(10,557
 )
(2)
  
1,046
     
(416
 )    
(9,927
 )    
(1,374
 )    
(11,301
 )
Income tax benefit
    
(3,167
 )
(2)
  
—
     
—
     
(3,167
 )    
—
     
(3,167
 )
Segment (loss) income
   
(7,390
 )
 
  
1,046
     
(416
 )    
(6,760
 )    
(1,374
 )    
(8,134
 )
Expenditures for segment assets
    
16
 
 
  
4
     
—
     
20
     
—
     
20
 
 
Segment Reporting for the Six Months Ended
June 30, 2017
 
   
Treatment
    
Services
    
Medical
    
Segments
Total
    
Corporate
(1)
    
Consolidated
Total
  
Revenue from external customers
   $
19,665
    $
5,757
     
—
    $
25,422
    $
—
    $
25,422
 
Intercompany revenues
    
113
     
10
     
—
     
123
     
—
     
—
 
Gross profit
    
4,861
     
212
     
—
     
5,073
     
—
     
5,073
 
Research and development
    
243
     
—
     
750
     
993
     
15
     
1,008
 
Interest income
    
—
     
—
     
—
     
—
     
71
     
71
 
Interest expense
    
(26
 )    
(1
 )    
—
     
(27
 )    
(162
 )    
(189
 )
Interest expense-financing fees
    
—
     
—
     
—
     
—
     
(18
 )    
(18
 )
Depreciation and amortization
    
1,997
     
271
     
—
     
2,268
     
20
     
2,288
 
Segment income (loss) before income taxes
    
2,840
     
(1,260
 )    
(750
 )    
830
     
(2,584
 )    
(1,754
 )
Income tax expense
   
145
     
—
     
—
     
145
     
2
     
147
 
Segment income (loss)
   
2,695
     
(1,260
 )    
(750
 )    
685
     
(2,586
 )    
(1,901
 )
Expenditures for segment assets
    
106
     
10
     
—
     
116
     
—
     
116
 
 
Segment Reporting for the Six Months Ended
June 30, 2016
 
   
Treatment
    
Services
    
Medical
    
Segments
Total
    
Corporate
(1)
    
Consolidated
Total
  
Revenue from external customers
   $
15,189
 
 
 $
9,658
     
—
    $
24,847
    $
—
    $
24,847
 
Intercompany revenues
    
10
 
 
  
15
     
—
     
25
     
—
     
—
 
Gross profit
    
444
 
 
  
1,406
     
—
     
1,850
     
—
     
1,850
 
Research and development
    
226
 
 
  
33
     
854
     
1,113
     
15
     
1,128
 
Interest income
    
2
 
 
  
—
     
—
     
2
     
45
     
47
 
Interest expense
    
(16
 )
 
  
—
     
—
     
(16
 )    
(260
 )    
(276
 )
Interest expense-financing fees
    
—
 
 
  
—
     
—
     
—
     
(85
 )    
(85
 )
Depreciation and amortization
    
1,418
 
 
  
321
     
—
     
1,739
     
57
     
1,796
 
Segment (loss) income before income taxes
    
(11,805
 )
(2)
  
322
     
(854
 )    
(12,337
 )    
(2,773
 )    
(15,110
 )
Income tax benefit
    
(3,130
 )
(2)
  
—
     
—
     
(3,130
 )    
—
     
(3,130
 )
Segment (loss) income
   
(8,675
 )
 
  
322
     
(854
 )    
(9,207
 )    
(2,773
 )    
(11,980
 )
Expenditures for segment assets
    
23
 
 
  
4
     
1
     
28
     
—
     
28
 
 
(
1
)
Amounts reflect the activity for corporate headquarters
not
included in the segment information.
 
(
2
)
Amounts include tangible and intangible asset impairment losses of
$1,816,000
and
$8,288,000,
respectively for the Company’s M&EC subsidiary. Also includes a tax benefit of approximately
$3,203,000
recorded resulting from the intangible impairment loss recorded for our M&EC subsidiary.