Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.19.1
Operating Segments
3 Months Ended
Mar. 31, 2019
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 three 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:

 

  - 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: Research and Development (“R&D”) of the Company’s medical isotope production technology by our majority-owned Polish subsidiary, Perma-Fix Medical S.A. and its wholly-owned subsidiary Perma-Fix Medical Corporation (“PFM Corporation”) (together known as “PF Medical” or the Medical Segment). The Company’s Medical Segment has not generated any revenue as it remains in the R&D stage. The Medical Segment has substantially reduced its R&D 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. All costs incurred by the Medical Segment are reflected within R&D in the accompanying consolidated financial statements.

 

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, 2019 and 2018 (in thousands):

 

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              
(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  

 

Segment Reporting for the Quarter Ended March 31, 2018

 

    Treatment     Services     Medical     Segments Total     Corporate(1)     Consolidated Total  
Revenue from external customers   $ 8,959     $ 3,699           $ 12,658     $     $ 12,658  
Intercompany revenues     213       14             227              
Gross profit     2,780       541             3,321             3,321  
Research and development     114             100       214       18       232  
Interest income                             49       49  
Interest expense           (1 )           (1 )     (52 )     (53 )
Interest expense-financing fees                             (9 )     (9 )
Depreciation and amortization     240       123             363       9       372  
Segment income (loss) before income taxes     1,744       (86 )     (100 )     1,558       (1,254 )     304  
Income tax expense     (51 )                 (51 )           (51 )
Segment income (loss)     1,693       (86 )     (100 )     1,507       (1,254 )     253  
Expenditures for segment assets     220       25             245       3       248  

 

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