| Operating Segments |
12. 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 three 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; |
| |
○ |
integrated Occupational Safety and Health services including 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 OSHA citation assistance; |
| |
○ |
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; and |
| |
○ |
on-site waste management services to commercial and governmental customers. |
| |
- |
Nuclear services, which include: |
| |
○ |
technology-based services including engineering, decontamination and decommissioning (“D&D”), specialty services and construction, logistics, transportation, processing and disposal; |
| |
○ |
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; logistics; transportation; and emergency response; and |
| |
- |
A company owned equipment calibration and maintenance laboratory that services, maintains, calibrates, and sources (i.e., rental) health physics, IH and customized NIOSH instrumentation. |
| |
- |
A company owned gamma spectroscopy laboratory for the analysis of oil and gas industry solids and liquids. |
MEDICAL SEGMENT, which includes: R&D of
the Company’s medical isotope production technology by our majority-owned Polish subsidiary, Perma-Fix of Medical or the
Medical Segment. The Medical Segment has not generated any revenues and all costs incurred are reflected within R&D in the
accompanying consolidated financial statements. As previously disclosed, the Medical Segment 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 11 – Discontinued Operations”) which do not generate
revenues.
The table below presents certain financial
information of our operating segments for the three months ended March 31, 2020 and 2019 (in thousands):
Segment Reporting for the Quarter Ended March 31, 2020
| |
|
Treatment |
|
|
Services |
|
|
Medical |
|
|
Segments Total |
|
|
Corporate(1) |
|
|
Consolidated Total |
|
| Revenue from external customers |
|
$ |
9,563 |
|
|
$ |
15,297 |
|
|
|
— |
|
|
$ |
24,860 |
|
|
$ |
— |
|
|
$ |
24,860 |
|
| Intercompany revenues |
|
|
207 |
|
|
|
8 |
|
|
|
— |
|
|
|
215 |
|
|
|
— |
|
|
|
— |
|
| Gross profit |
|
|
2,745 |
|
|
|
1,895 |
|
|
|
— |
|
|
|
4,640 |
|
|
|
— |
|
|
|
4,640 |
|
| Research and development |
|
|
94 |
|
|
|
66 |
|
|
|
66 |
|
|
|
226 |
|
|
|
6 |
|
|
|
232 |
|
| Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
56 |
|
|
|
56 |
|
| Interest expense |
|
|
(18 |
) |
|
|
(6 |
) |
|
|
— |
|
|
|
(24 |
) |
|
|
(96 |
) |
|
|
(120 |
) |
| Interest expense-financing fees |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(68 |
) |
|
|
(68 |
) |
| Depreciation and amortization |
|
|
264 |
|
|
|
77 |
|
|
|
— |
|
|
|
341 |
|
|
|
5 |
|
|
|
346 |
|
| Segment income (loss) before income taxes |
|
|
1,547 |
|
|
|
1,318 |
|
|
|
(66 |
) |
|
|
2,799 |
|
|
|
(1,477 |
) |
|
|
1,322 |
|
| Income tax expense |
|
|
(14 |
) |
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
|
|
(14 |
) |
| Segment income (loss) |
|
|
1,533 |
|
|
|
1,318 |
|
|
|
(66 |
) |
|
|
2,785 |
|
|
|
(1,477 |
) |
|
|
1,308 |
|
| Expenditures for segment assets |
|
|
679 |
|
|
|
214 |
|
|
|
— |
|
|
|
893 |
|
|
|
3 |
|
|
|
896 |
(2) |
Segment Reporting for the Quarter Ended March 31, 2019
| |
|
Treatment |
|
|
Services |
|
|
Medical |
|
|
Segments Total |
|
|
Corporate(1) |
|
|
Consolidated Total |
|
| Revenue from external customers |
|
$ |
9,905 |
|
|
$ |
1,803 |
|
|
|
— |
|
|
$ |
11,708 |
|
|
$ |
— |
|
|
$ |
11,708 |
|
| Intercompany revenues |
|
|
2 |
|
|
|
21 |
|
|
|
— |
|
|
|
23 |
|
|
|
— |
|
|
|
— |
|
| Gross profit/(negative) gross profit |
|
|
2,957 |
|
|
|
(456 |
) |
|
|
— |
|
|
|
2,501 |
|
|
|
— |
|
|
|
2,501 |
|
| Research and development |
|
|
147 |
|
|
|
— |
|
|
|
74 |
|
|
|
221 |
|
|
|
6 |
|
|
|
227 |
|
| Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
81 |
|
|
|
81 |
|
| Interest expense |
|
|
(17 |
) |
|
|
(9 |
) |
|
|
— |
|
|
|
(26 |
) |
|
|
(61 |
) |
|
|
(87 |
) |
| Interest expense-financing fees |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10 |
) |
|
|
(10 |
) |
| Depreciation and amortization |
|
|
237 |
|
|
|
78 |
|
|
|
— |
|
|
|
315 |
|
|
|
8 |
|
|
|
323 |
|
| Segment income (loss) before income taxes |
|
|
1,875 |
|
|
|
(1,012 |
) |
|
|
(74 |
) |
|
|
789 |
|
|
|
(1,300 |
) |
|
|
(511 |
) |
| Income tax expense |
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
(39 |
) |
|
|
— |
|
|
|
(39 |
) |
| Segment income (loss) |
|
|
1,836 |
|
|
|
(1,012 |
) |
|
|
(74 |
) |
|
|
750 |
|
|
|
(1,300 |
) |
|
|
(550 |
) |
| Expenditures for segment assets |
|
|
222 |
|
|
|
2 |
|
|
|
— |
|
|
|
224 |
|
|
|
— |
|
|
|
224 |
(2) |
(1) Amounts reflect the activity
for corporate headquarters not included in the segment information.
(2) Net of financed amount of $82,000
and $4,000 for the three month ended March 31, 2020 and 2019, respectively.
|