Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SEGMENT INFORMATION

v2.4.1.9
NOTE 4: SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
NOTE 4:                      SEGMENT INFORMATION
 

a.           The Company and its subsidiaries operate primarily in two business segments and follow the requirements of FASB ASC 280-10. Additionally, the two segments are also treated by the Company as reporting units for goodwill impairment evaluation purposes under FASB ASC 350-20-35. The goodwill amounts associated with each of these reporting units was determined and valued when the specific businesses in the reportable segment were purchased.
 

The Company’s reportable operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The accounting policies of the operating segments are the same as those used by the Company in the preparation of its annual financial statements. The Company evaluates performance based upon two primary factors, one is the segment’s operating income and the other is the segment’s contribution to the Company’s future strategic growth.
 

b.           The following is information about reported segment revenues, income (losses), and total assets as of March 31, 2015 and 2014:

 
 
Training and
Simulation
Division
 
 
Power Systems
Division
 
 
Corporate
Expenses
 
 
Total
Company
 
Three months ended March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Revenues from outside customers
 
$
13,438,122
   
$
10,788,586
   
$
–
   
$
24,226,708
 
Depreciation, amortization and impairment expenses(1)
   
(207,176
)
 
 
(1,126,588
)
 
 
(6,469
)
 
 
(1,340,233
)
Direct expenses(2)
   
(11,731,646
)
 
 
(10,558,614
)
 
 
(511,903
)
 
 
(23,802,163
)
Segment net income (loss)
 
$
1,499,300
 
 
$
(896,616
)
 
$
(518,372
)
 
$
84,312
 
Financial income (expense)
   
(11,615
)
 
 
(24,631
)
 
 
(291,362
)
 
 
(327,608
)
Income tax expense
   
(27,257
)
 
 
–
 
 
 
(212,124
)
 
 
(239,381
)
Net income
 
$
1,460,428
 
 
$
(921,247
)
 
$
(1,021,858
)
 
$
(482,677
)
Segment assets(3)
 
$
58,629,419
   
$
62,437,020
   
$
520,771
   
$
121,587,210
 
Additions to long-lived assets
 
$
95,659
   
$
370,094
   
$
4,502
   
$
470,255
 
Three months ended March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues from outside customers
 
$
15,681,838
 
 
$
6,700,962
 
 
$
–
 
 
$
22,382,800
 
Depreciation, amortization and impairment expenses(1)
 
 
(179,242
)
 
 
(192,194
)
 
 
(6,437
)
 
 
(377,873
)
Direct expenses(2)
 
 
(12,683,837
)
 
 
(5,835,304
)
 
 
(2,154,257
)
 
 
(20,673,398
)
Segment net income (loss)
 
$
2,818,759
 
 
$
673,464
 
 
$
(2,160,694
)
 
$
1,331,529
 
Financial expense
 
 
(7,412
)
 
 
(61,720
)
 
 
(49,869
)
 
 
(119,001
)
Income tax expense
 
 
(35,011
)
 
 
(13,800
)
 
 
(149,625
)
 
 
(198,436
)
Net income
 
$
2,776,336
 
 
$
597,944
 
 
$
(2,360,188
)
 
$
1,014,092
 
Segment assets(3)
 
$
55,407,589
 
 
$
25,665,035
 
 
$
357,338
 
 
$
81,429,962
 
Additions to long-lived assets
 
$
295,101
 
 
$
66,000
 
 
$
1,607
 
 
$
362,708
 

  (1)
 Includes depreciation of property and equipment and amortization expenses of intangible assets.

  (2)
 Including, inter alia, sales and marketing, general and administrative.

  (3)
 Out of those amounts, goodwill in the Company’s Training and Simulation and Power Systems Divisions totaled $24,435,640 and $20,852,116, respectively, as of March 31, 2015 and $24,435,640 and $6,558,879, respectively, as of March 31, 2014.