Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.20.2
Operating Segments
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
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 four uniquely licensed and permitted treatment and storage facilities; and
     
  - Research and 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 and six months ended June 30, 2020 and 2019 (in thousands):

 

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 (3)

 

Segment Reporting for the Quarter Ended June 30, 2019

 

    Treatment     Services     Medical     Segments
Total		     Corporate (1)    

Consolidated

Total

  
Revenue from external customers   $ 10,094     $ 7,041       —     $ 17,135     $ —     $ 17,135  
Intercompany revenues     7       42       —       49       —       —  
Gross profit     2,627       644       —       3,271       —       3,271  
Research and development     136       —       80       216       7       223  
Interest income     —       —       —       —       107       107  
Interest expense     (30 )     (4 )     —       (34 )     (73 )     (107 )
Interest expense-financing fees     —       —       —       —       (60 )     (60 )
Depreciation and amortization     233       79       —       312       5       317  
Segment income (loss) before income taxes     1,611       137       (80 )     1,668       (1,289 )     379  
Income tax expense     6       —       —       6       —       6  
Segment income (loss)     1,605       137       (80 )     1,662       (1,289 )     373  
Expenditures for segment assets     73       15       —       88       —       88 (2)

 

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 (3)

 

Segment Reporting for the Six Months Ended June 30, 2019

 

    Treatment     Services     Medical     Segments
Total		     Corporate (1)     Consolidated
Total		  
Revenue from external customers   $ 19,999     $ 8,844       —     $ 28,843     $ —     $ 28,843  
Intercompany revenues     9       63       —       72       —       —  
Gross profit     5,584       188       —       5,772       —       5,772  
Research and development     283       —       154       437       13       450  
Interest income     —       —       —       —       188       188  
Interest expense     (47 )     (13 )     —       (60 )     (134 )     (194 )
Interest expense-financing fees     —       —       —       —       (70 )     (70 )
Depreciation and amortization     470       157       —       627       14       641  
Segment income (loss) before income taxes     3,487       (875 )     (154 )     2,458       (2,590 )     (132 )
Income tax expense     45       —       —       45       —       45  
Segment income (loss)     3,442       (875 )     (154 )     2,413       (2,590 )     (177 )
Expenditures for segment assets     294       18       —       312       —       312 (2)

 

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

 

(2) Net of financed amount of $18,000 and $22,000 for the three and six months ended June 30, 2019, respectively.

 

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