Quarterly report pursuant to sections 13 or 15(d)

Operating Segments

v2.4.0.6
Operating Segments
 9 Months Ended
Sep. 30, 2012
Operating Segments [Abstract]  
Operating Segments
11.
Operating Segments

In accordance with 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 10 – 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.

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 advance 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; and
o
augmented 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, calibrates, and sources (i.e.rental) of health physics, IH and customized nuclear, environmental, and occupational safety and health ("NEOSH") instrumentation;
-
Nuclear services, which include:
o
technology-based services including engineering, decontamination and decommissioning, 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 decontamination and decommissioning; facility decontamination, dismantling, demolition, and planning; site restoration; site construction; logistics; transportation; and emergency response.
 
The table below presents certain financial information of our operating segments as of and for the three and nine months ended September 30, 2012 and 2011 (in thousands).

Segment Reporting for the Quarter Ended September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Treatment
 
 
Services
 
 
Segments Total
 
 
Corporate (2)
 
 
Consolidated Total
 
Revenue from external customers
 
$
11,405
 
 
$
17,723
 
 
$
29,128
 (3)
 
$
-
 
 
$
29,128
 
Intercompany revenues
 
 
265
 
 
 
50
 
 
 
315
 
 
 
-
 
 
 
-
 
Gross profit
 
 
3,097
 
 
 
1,337
 
 
 
4,434
 
 
 
-
 
 
 
4,434
 
Interest income
 
 
-
 
 
 
-
 
 
 
-
 
 
 
10
 
 
 
10
 
Interest expense
 
 
2
 
 
 
4
 
 
 
6
 
 
 
217
 
 
 
223
 
Interest expense-financing fees
 
 
-
 
 
 
-
 
 
 
-
 
 
 
23
 
 
 
23
 
Depreciation and amortization
 
 
1,104
 
 
 
(44
 )
 
 
1,060
 
 
 
19
 
 
 
1,079
 
Segment profit (loss)
 
 
1,351
 
 
 
83
 
 
 
1,434
 
 
 
(1,777
 )
 
 
(343
 )
Segment assets(1)
 
 
78,558
 
 
 
37,655
 
 
 
116,213
 
 
 
32,295
(4)
 
 
148,508
 
Expenditures for segment assets
 
 
24
 
 
 
1
 
 
 
25
 
 
 
-
 
 
 
25
 
Total long-term debt
 
 
97
 
 
 
7
 
 
 
104
 
 
 
16,335
 
 
 
16,439
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting for the Quarter Ended September 30, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment
 
 
Services
 
 
Segments Total
 
 
Corporate (2)
 
 
Consolidated Total
 
Revenue from external customers
 
$
20,150
 
 
$
12,637
 
 
$
32,787
 (3)
 
$
-
 
 
$
32,787
 
Intercompany revenues
 
 
629
 
 
 
43
 
 
 
672
 
 
 
-
 
 
 
-
 
Gross profit
 
 
8,979
 
 
 
2,322
 
 
 
11,301
 
 
 
-
 
 
 
11,301
 
Interest income
 
 
-
 
 
 
-
 
 
 
-
 
 
 
14
 
 
 
14
 
Interest expense
 
 
5
 
 
 
1
 
 
 
6
 
 
 
93
 
 
 
99
 
Interest expense-financing fees
 
 
-
 
 
 
-
 
 
 
-
 
 
 
22
 
 
 
22
 
Depreciation and amortization
 
 
1,127
 
 
 
9
 
 
 
1,136
 
 
 
35
 
 
 
1,171
 
Segment profit (loss)
 
 
5,270
 
 
 
1,204
 
 
 
6,474
 
 
 
(2,053
 )
 
 
4,421
 
Segment assets(1)
 
 
96,444
 
 
 
3,260
 
 
 
99,704
 
 
 
38,635
(4)
 
 
138,339
 
Expenditures for segment assets
 
 
325
 
 
 
-
 
 
 
325
 
 
 
22
 
 
 
347
 
Total long-term debt
 
 
171
 
 
 
13
 
 
 
184
 
 
 
5,378
(5)
 
 
5,562
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting for the Nine Months Ended September 30, 2012
 
 
 
 
 
 
 
 
 
 
Treatment
 
 
Services
 
 
Segments Total
 
 
Corporate (2)
 
 
Consolidated Total
 
Revenue from external customers
 
$
34,284
 
 
$
66,896
 
 
$
101,180
 (3)
 
$
-
 
 
$
101,180
 
Intercompany revenues
 
 
1,423
 
 
 
167
 
 
 
1,590
 
 
 
-
 
 
 
-
 
Gross profit
 
 
6,904
 
 
 
5,556
 
 
 
12,460
 
 
 
-
 
 
 
12,460
 
Interest income
 
 
-
 
 
 
-
 
 
 
-
 
 
 
31
 
 
 
31
 
Interest expense
 
 
7
 
 
 
9
 
 
 
16
 
 
 
626
 
 
 
642
 
Interest expense-financing fees
 
 
-
 
 
 
-
 
 
 
-
 
 
 
84
 
 
 
84
 
Depreciation and amortization
 
 
3,359
 
 
 
1,108
 
 
 
4,467
 
 
 
55
 
 
 
4,522
 
Segment profit (loss)
 
 
2,515
 
 
 
1,008
 
 
 
3,523
 
 
 
(5,852
 )
 
 
(2,329
 )
Segment assets(1)
 
 
78,558
 
 
 
37,655
 
 
 
116,213
 
 
 
32,295
(4)
 
 
148,508
 
Expenditures for segment assets
 
 
266
 
 
 
142
 
 
 
408
 
 
 
4
 
 
 
412
 
Total long-term debt
 
 
97
 
 
 
7
 
 
 
104
 
 
 
16,335
 
 
 
16,439
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting for the Nine Months Ended September 30, 2011
 
 
 
 
 
 
 
 
 
Treatment
 
 
Services
 
 
Segments Total
 
 
Corporate (2)
 
 
Consolidated Total
 
Revenue from external customers
 
$
50,116
 
 
$
35,199
 
 
$
85,315
 (3)
 
$
-
 
 
$
85,315
 
Intercompany revenues
 
 
1,423
 
 
 
199
 
 
 
1,622
 
 
 
-
 
 
 
-
 
Gross profit
 
 
15,911
 
 
 
6,469
 
 
 
22,380
 
 
 
-
 
 
 
22,380
 
Interest income
 
 
-
 
 
 
-
 
 
 
-
 
 
 
40
 
 
 
40
 
Interest expense
 
 
69
 
 
 
2
 
 
 
71
 
 
 
387
 
 
 
458
 
Interest expense-financing fees
 
 
-
 
 
 
-
 
 
 
-
 
 
 
178
 
 
 
178
 
Depreciation and amortization
 
 
3,406
 
 
 
28
 
 
 
3,434
 
 
 
69
 
 
 
3,503
 
Segment profit (loss)
 
 
8,649
 
 
 
3,509
 
 
 
12,158
 
 
 
(5,718
 )
 
 
6,440
 
Segment assets(1)
 
 
96,444
 
 
 
3,260
 
 
 
99,704
 
 
 
38,635
(4)
 
 
138,339
 
Expenditures for segment assets
 
 
1,984
 
 
 
1
 
 
 
1,985
 
 
 
10
 
 
 
1,995
 
Total long-term debt
 
 
171
 
 
 
13
 
 
 
184
 
 
 
5,378
(5)
 
 
5,562
 

(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 following customers accounted for 10% or more of the total revenues generated from continuing operations for the three and nine months ended September 30, 2012 and the corresponding period of 2011: (1) Revenues from CH Plateau Remediation Company ("CHPRC") totaled $6,036,000 or 20.1% and $18,669,000 or 18.3% for the three and nine months ended September 30, 2012, respectively, and $19,570,000 or 59.7% and $50,403,000 or 59.1% for the corresponding period of 2011, respectively; and (2) Revenues generated directly from the U.S. Department of Energy ("DOE") accounted for $4,604,000 or 15.8% and $24,012,000 or 23.7% for the three and nine months ended September 30, 2012, respectively, and $0 or 0% and $0 or 0% for the corresponding period of 2011, respectively. The increase in revenue generated directly from the DOE was attributable to the acquisition of SEC in October 31, 2011.

(4)
Amount includes assets from discontinued operations of $2,140,000 and $4,196,000 as of September 30, 2012 and 2011, respectively.

(5)
Net of debt discount of ($22,000) in connection with Warrants and 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 on May 8, 2009.  The promissory note and the Warrants were modified on April 18, 2011.  The promissory note was paid off and the debt discount became fully amortized in April 2012.