SEGMENT REPORTING |
NOTE 17 SEGMENT REPORTING
In accordance to ASC 280, “Segment Reporting”, we define an operating segment as a business activity:
| · | from which we may earn revenue and incur expenses; |
| · | whose operating results are regularly reviewed by the Chief Operating Officer to make decisions about resources to be allocated to the segment and assess its performance; and |
| · | for which discrete financial information is available. |
We currently have two reporting segments, which are based on a service offering approach. This however, excludes corporate headquarters, which does not generate revenue, and our discontinued operations, which includes all facilities as discussed in “Note 9 – Discontinued Operations and Divestitures”.
Our reporting segments are defined as follows:
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 activities to identify, develop and implement innovative waste processing techniques for problematic waste streams. |
SERVICE SEGMENT which includes: | - | On-site waste management services to commercial and government customers; |
| - | Technical services which include: |
| o | health physic and radiological control technician services providing both field support as well as professional technical support to commercial and government customers; |
| o | safety and industrial hygiene services providing field support and professional technical support to commercial and government customers; |
| o | staff augmentation services providing consulting, engineering, project management, waste management, environmental, and decontamination and decommissioning field personnel, technical personnel, management and services to commercial and government customers; and |
| o | consulting engineering services (through our Schreiber, Yonley & Associates subsidiary – “SYA”) providing consulting environmental services to industrial and government customers: |
| § | including air, water, and hazardous waste permitting, air, soil and water sampling, compliance reporting, emission reduction strategies, compliance auditing, and various compliance and training activities; and |
| § | engineering and compliance support to other segments. |
| - | A company owned equipment calibration and maintenance laboratory that services, maintains and calibrates health physics and industrial hygiene instrumentation. |
The table below shows certain financial information of our reporting segments for 2011, 2010, and 2009 (in thousands).
Segment Reporting as of and for the year ended December 31, 2011
| | Treatment | | | Services | | | Segments Total | | | Corporate And Other (2) | | | Consolidated Total | | Revenue from external customers | | $ | 65,836 | (3) | | $ | 52,774 | | | $ | 118,610 | | | $ | - | | | $ | 118,610 | | Intercompany revenues | | | 1,928 | | | | 585 | | | | 2,513 | | | | ¾ | | | | ¾ | | Gross profit | | | 21,299 | | | | 7,489 | | | | 28,788 | | | | ¾ | | | | 28,788 | | Interest income | | | ¾ | | | | ¾ | | | | ¾ | | | | 58 | | | | 58 | | Interest expense | | | 72 | | | | 7 | | | | 79 | | | | 578 | | | | 657 | | Interest expense-financing fees | | | ¾ | | | | ¾ | | | | ¾ | | | | 207 | | | | 207 | | Depreciation and amortization | | | 4,535 | | | | 337 | | | | 4,872 | | | | 89 | | | | 4,961 | | Segment profit (loss) | | | 13,725 | | | | 5,885 | | | | 19,610 | | | | (7,810 | ) | | | 11,800 | | Segment assets(1) | | | 81,197 | | | | 41,819 | | | | 123,016 | | | | 41,087 | (4) | | | 164,103 | | Expenditures for segment assets | | | 2,278 | | | | 4 | | | | 2,282 | | | | 21 | | | | 2,303 | | Total debt | | | 142 | | | | 12 | | | | 154 | | | | 18,789 | (5) | | | 18,943 | |
Segment Reporting as of and for the year ended December 31, 2010
| | Treatment | | | Services | | | Segments Total | | | Corporate And Other (2) | | | Consolidated Total | | Revenue from external customers | | $ | 53,363 | (3) | | $ | 44,427 | | | $ | 97,790 | | | $ | - | | | $ | 97,790 | | Intercompany revenues | | | 2,962 | | | | 502 | | | | 3,464 | | | | ¾ | | | | ¾ | | Gross profit | | | 12,733 | | | | 7,882 | | | | 20,615 | | | | ¾ | | | | 20,615 | | Interest income | | | ¾ | | | | ¾ | | | | ¾ | | | | 65 | | | | 65 | | Interest expense | | | 138 | | | | 3 | | | | 141 | | | | 614 | | | | 755 | | Interest expense-financing fees | | | 3 | | | | ¾ | | | | 3 | | | | 409 | | | | 412 | | Depreciation and amortization | | | 4,469 | | | | 39 | | | | 4,508 | | | | 22 | | | | 4,530 | | Segment profit (loss) | | | 4,481 | | | | 6,131 | | | | 10,612 | | | | (7,341 | ) | | | 3,271 | | Segment assets(1) | | | 91,881 | | | | 2,570 | | | | 94,451 | | | | 30,864 | (4) | | | 125,315 | | Expenditures for segment assets | | | 1,601 | | | | 19 | | | | 1,620 | | | | 22 | | | | 1,642 | | Total debt | | | 1,105 | | | | 18 | | | | 1,123 | | | | 9,126 | (5) | | | 10,249 | |
Segment Reporting as of and for the year ended December 31, 2009
| | Treatment | | | Services | | | Segments Total | | | Corporate And Other (2) | | | Consolidated Total | | Revenue from external customers | | $ | 54,785 | (3) | | $ | 37,608 | | | $ | 92,393 | | | $ | - | | | $ | 92,393 | | Intercompany revenues | | | 2,349 | | | | 446 | | | | 2,795 | | | | ¾ | | | | ¾ | | Gross profit | | | 16,670 | | | | 7,811 | | | | 24,481 | | | | ¾ | | | | 24,481 | | Interest income | | | 1 | | | | ¾ | | | | 1 | | | | 144 | | | | 145 | | Interest expense | | | 640 | | | | 4 | | | | 644 | | | | 995 | | | | 1,639 | | Interest expense-financing fees | | | ¾ | | | | ¾ | | | | ¾ | | | | 283 | | | | 283 | | Depreciation and amortization | | | 4,241 | | | | 40 | | | | 4,281 | | | | 40 | | | | 4,321 | | Segment profit (loss) | | | 7,640 | | | | 6,911 | | | | 14,551 | | | | (4,864 | ) | | | 9,687 | | Segment assets(1) | | | 93,831 | | | | 3,612 | | | | 97,443 | | | | 28,557 | (4) | | | 126,000 | | Expenditures for segment assets | | | 1,421 | | | | 4 | | | | 1,425 | | | | 8 | | | | 1,433 | | Total debt | | | 1,993 | | | | 23 | | | | 2,016 | | | | 10,264 | (5) | | | 12,280 | |
(1) | Segment assets have been adjusted for intercompany accounts to reflect actual assets for each segment. |
(2) | Amounts reflect the activity for corporate headquarters, not included in the segment information. |
(3) | The consolidated revenues within our Nuclear Treatment and Services Segments include the CH Plateau Remediation Company (“CHPRC”) revenue of $51,136,000 or 49.9%, $51,929,000 or 53.1%, and $45,169,000 or 48.8%, for 2011, 2010, and 2009, respectively, of our total consolidated revenue from continuing operations. Our M&EC facility was awarded a subcontract by CHPRC, a general contractor to the DOE in the second quarter of 2008. Operations of this subcontract officially commenced at the DOE Hanford Site on October 1, 2008. We also have three waste processing contracts with CHPRC. |
(4) | Amount includes assets from our discontinued operations of $2,343,000, $7,433,000, and $6,352,000, as of December 31, 2011, 2010, and 2009, respectively. |
(5) | Net of debt discount of ($12,000), ($117,000), and (450,000) for 2011 2010, and 2009, respectively, based on the estimated fair value at issuance of two Warrants and 200,000 shares of the Company's Common Stock issued on May 8, 2009 in connection with a $3,000,000 promissory note entered into by the Company and Mr. William Lampson and Mr. Diehl Rettig. The promissory note and the Warrants were modified on April 18, 2011. See “Note 10 – Long-Term Debt – Promissory Note and Installment Agreement” for additional information. |
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