Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.20.2
Operating Segments
 9 Months Ended
Sep. 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 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: 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 nine months ended September 30, 2020 and 2019 (in thousands).

 

Segment Reporting for the Quarter Ended September 30, 2020

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 7,066     $ 23,106       —     $ 30,172     $ —     $ 30,172  
Intercompany revenues     226       6       —       232       —       —  
Gross profit     1,094       3,656       —       4,750       —       4,750  
Research and development     49       7       81       137       20       157  
Interest income     —       —       —       —       28       28  
Interest expense     (34 )     (3 )     —       (37 )     (50 )     (87 )
Interest expense-financing fees     —       —       —       —       (58 )     (58 )
Depreciation and amortization     373       97       —       470       8       478  
Segment income (loss) before income taxes     280       2,813       (81 )     3,012       (1,664 )     1,348  
Income tax (benefit) expense     (170 )     2       —       (168 )     35       (133 )
Segment income (loss)     450       2,811       (81 )     3,180       (1,699 )     1,481  
Expenditures for segment assets     95       24       —       119       3       122 (2)

 

Segment Reporting for the Quarter Ended September 30, 2019

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 10,081     $ 12,454        —     $ 22,535     $ —     $ 22,535  
Intercompany revenues     75       38        —       113       —        —  
Gross profit     3,338       1,819        —       5,157       —       5,157  
Research and development     85        —       74       159       6       165  
Interest income      —        —        —        —       77       77  
Interest expense     (19 )     (5 )      —       (24 )     (75 )     (99 )
Interest expense-financing fees      —        —        —        —       (69 )     (69 )
Depreciation and amortization     243       79        —       322       6       328  
Segment income (loss) before income taxes     2,244       1,193       (74 )     3,363       (1,413 )     1,950  
Income tax expense     55        —        —       55        —       55  
Segment income (loss)     2,189       1,193       (74 )     3,308       (1,413 )     1,895  
Expenditures for segment assets     470       31        —       501        —       501 (3)

 

Segment Reporting for the Nine Months Ended September 30, 2020

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 24,469     $ 52,610        —     $ 77,079     $ —     $ 77,079  
Intercompany revenues     879       19        —       898        —        —  
Gross profit     5,533       7,167        —       12,700        —       12,700  
Research and development     194       119       221       534       64       598  
Interest income     1        —        —       1       111       112  
Interest expense     (80 )     (13 )      —       (93 )     (213 )     (306 )
Interest expense-financing fees      —        —        —        —       (187 )     (187 )
Depreciation and amortization     912       259        —       1,171       18       1,189  
Segment income (loss) before income taxes     2,577       5,162       (221 )     7,518       (4,597 )     2,921  
Income tax (benefit) expense     (165 )     2        —       (163 )     35       (128 )
Segment income (loss)     2,742       5,160       (221 )     7,681       (4,632 )     3,049  
Expenditures for segment assets     1,095       385        —       1,480       8       1,488 (2)

 

Segment Reporting for the Nine Months Ended September 30, 2019

 

    Treatment     Services     Medical     Segments Total     Corporate (1)     Consolidated Total  
Revenue from external customers   $ 30,079     $ 21,299        —     $ 51,378     $  —     $ 51,378  
Intercompany revenues     83       101        —       184        —        —  
Gross profit     8,921       2,008        —       10,929        —       10,929  
Research and development     367        —       228       595       20       615  
Interest income      —        —        —        —       265       265  
Interest expense     (66 )     (18 )      —       (84 )     (209 )     (293 )
Interest expense-financing fees      —        —        —        —       (139 )     (139 )
Depreciation and amortization     713       236        —       949       19       968  
Segment income (loss) before income taxes     5,731       318       (228 )     5,821       (4,003 )     1,818  
Income tax expense     99        —        —       99        —       99  
Segment income (loss)     5,632       318       (228 )     5,722       (4,003 )     1,719  
Expenditures for segment assets     764       49        —       813        —       813 (3)

 

(1) Amounts reflect the activity for corporate headquarters not included in the segment information.
   
(2) Net of financed amount of $751,000 and $883,000 for the three and nine months ended September 30, 2020, respectively.
   
(3) Net of financed amount of $6,000 and $29,000 for the three and nine months ended September 30, 2019, respectively.