Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SEGMENT INFORMATION

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NOTE 4: SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2012
Segment Reporting Disclosure [Text Block]
NOTE 4:                      SEGMENT INFORMATION

a.           The Company and its subsidiaries operate primarily in two continuing 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 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 statement. 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 for the six and three months ended June 30, 2012 and 2011:

   
Training and
Simulation
Division
   
Battery and
Power Systems
Division
   
Corporate
Expenses
   
Discontinued
   
Total
Company
 
Six months ended June 30, 2012
                             
Revenues from outside customers
  $ 27,400,605     $ 9,080,233     $     $     $ 36,480,838  
Depreciation, amortization and impairment expenses(1)
    (566,370 )     (561,843 )     (26,496 )           (1,154,709 )
Direct expenses(2)
    (25,176,638 )     (8,874,885 )     (2,888,354 )           (36,939,877 )
Segment net income (loss)
  $ 1,657,597     $ (356,495 )   $ (2,914,850 )   $     $ (1,613,748 )
Financial income (expense)
    (20,580 )     (78,156 )     (280,264 )           (379,000 )
Income tax expense
    97,904             299,250             397,154  
Net income (loss) continuing operations
  $ 1,539,113     $ (434,651 )   $ (3,494,364 )   $     $ (2,389,902 )
Net income discontinued operations
                      (1,571,201 )     (1,571,201 )
Net income (loss)
  $ 1,593,113     $ (434,651 )   $ (3,494,364 )   $ (1,571,201 )   $ (3,961,103 )
Segment assets(3) 
  $ 52,396,629     $ 23,269,717     $ 208,262     $ 2,989,645     $ 78,864,253  
Additions to long-lived assets
  $ 312,503     $ 159,521     $     $     $ 472,024  
Six months ended June 30, 2011
                                       
Revenues from outside customers         
  $ 14,710,601     $ 8,321,586     $     $     $ 23,032,187  
Depreciation, amortization and impairment expenses(1)
    (929,685 )     (531,745 )     (29,561 )           (1,490,991 )
Direct expenses(2)
    (12,686,985 )     (8,566,513 )     (2,422,892 )           (23,676,390 )
Segment net income (loss)
  $ 1,093,931     $ (776,672 )   $ (2,452,453 )   $     $ (2,135,194 )
Financial income (expense)
    (473 )     155,062       (164,694 )           (10,105 )
Income tax expense
    56,244             225,002             281,246  
Net income (loss) continuing operations
  $ 1,037,214     $ (621,610 )   $ (2,842,149 )   $     $ (2,426,545 )
Net income (loss) discontinued operations
                      (2,288,039 )     (2,288,039 )
Net income (loss)
  $ 1,037,214     $ (621,610 )   $ (2,842,149 )   $ (2,288,039 )   $ (4,714,584 )
Segment assets(3)
  $ 43,859,729     $ 24,959,595     $ 327,820     $ 13,240,634     $ 82,387,778  
Additions to long-lived assets
  $ 192,761     $ 275,508     $ 3,345     $
98,682
    $
570,296
 
Three months ended June 30, 2012
                                       
Revenues from outside customers
  $ 16,467,067     $ 3,906,063     $     $     $ 20,373,130  
Depreciation, amortization and impairment expenses(1)
    (286,607 )     (282,592 )     (11,132 )           (580,331 )
Direct expenses(2)
    (15,104,097 )     (4,300,458 )     (1,112,802 )           (20,517,357 )
Segment net income (loss)
  $ 1,076,363     $ (676,987 )   $ (1,123,934 )   $     $ (724,558 )
Financial income (expense)
    (7,125 )     (135,826 )     (199,213 )           (342,164 )
Income tax expense
    49,952             149,625             199,577  
Net income (loss) continuing operations
  $ 1,019,286     $ (812,813 )   $ (1,472,772 )   $     $ (1,266,299 )
Net income discontinued operations
                      (1,635,361 )     (1,635,361 )
Net income (loss)
  $ 1,019,286     $ (812,813 )   $ (1,472,772 )   $ (1,635,361 )   $ (2,901,660 )
Three months ended June 30, 2011
                                       
Revenues from outside customers
  $ 6,460,199     $ 4,131,517     $     $     $ 10,591,716  
Depreciation, amortization and impairment expenses(1)
    (466,076 )     (267,868 )     (12,225 )           (746,169 )
Direct expenses(2)
    (5,586,999 )     (4,204,977 )     (1,261,252 )           (11,053,228 )
Segment net income (loss)
  $ 407,124     $ (341,328 )   $ (1,273,477 )   $     $ (1,207,681 )
Financial income (expense)
    (156 )     97,077       (216,192 )           (119,271 )
Income tax expense
    28,122             112,500             140,622  
Net income (loss) continuing operations
  $ 378,846     $ (244,251 )   $ (1,602,169 )   $     $ (1,467,574 )
Net income (loss) discontinued operations
                      (603,865 )     (603,865 )
Net income (loss)
  $ 378,846     $ (244,251 )   $ (1,602,169 )   $ (603,865 )   $ (2,071,439 )

(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 Battery and Power Systems Divisions totaled $24,435,641 and $5,829,929, respectively, as of June 30, 2012 and $24,435,641 and $6,697,163, respectively, as of June 30, 2011.