Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SEGMENT INFORMATION

v3.5.0.2
NOTE 4: SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 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. The two segments are also treated by the Company as reporting units for goodwill impairment evaluation purposes. The goodwill amounts associated with the Training and Simulation Division and the Power Systems Division were determined and valued when the specific businesses 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 or loss 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) from continuing operations and total assets for the nine and three months ended September 30, 2016 and 2015:

 
  
Training and
Simulation
Division
    
Power Systems
Division
    
Corporate
Expenses
    
Total
Company
  
Nine Months ended September 30, 2016
                        
Revenues from outside customers
  
$
36,519,124
    
$
34,967,354
    
$
–
    
$
71,486,478
  
Depreciation, amortization and impairment expenses(1)
   
(825,178
)
    
(2,649,545
)
    
(12,809
)
    
(3,487,532
)
Direct expenses(2)
   
(29,218,054
)
    
(32,217,155
)
    
(4,556,134
)
    
(65,991,343
)
Segment operating income (loss)
  
$
6,475,892
    
$
100,654
    
$
(4,568,943
)
  
$
2,007,603
  
Financial expense
    
(29,593
)
    
(58,858
)
    
(680,877
)
    
(769,328
)
Income tax benefit (expense)
    
51,285
      
(127,632
)
    
(607,925
)
    
(684,272
)
Income (loss) from continuing operations
  
$
6,497,584
    
$
(85,836
)
  
$
(5,857,745
)
  
$
554,003
  
Segment assets(3)
 
$
46,650,797
    
$
61,131,101
    
$
8,681,031
    
$
116,462,929
  
Additions to long-lived assets
  
$
236,866
    
$
668,854
    
$
–
    
$
905,720
  
Nine Months ended September 30, 2015
                                
Revenues from outside customers
  
$
40,160,933
    
$
28,999,448
    
$
–
    
$
69,160,381
  
Depreciation, amortization and impairment expenses(1)
   
(640,842
)
    
(3,002,255
)
    
(19,323
)
    
(3,662,420
)
Direct expenses(2)
   
(32,671,082
)
    
(30,334,284
)
    
(3,457,931
)
    
(66,463,297
)
Segment operating income (loss)
  
$
6,849,009
    
$
(4,337,091
)
  
$
(3,477,254
)
  
$
(965,336
)
Financial income (expense)
    
(42,851
)
    
33,955
      
(878,875
)
    
(887,771
)
Income tax expense
    
(200,425
)
    
–
      
(699,204
)
    
(899,629
)
Income (loss) from continuing operations
  
$
6,605,733
    
$
(4,303,136
)
  
$
(5,055,333
)
  
$
(2,752,736
)
Segment assets(3)(4)
 
$
58,050,229
    
$
57,992,723
    
$
386,112
    
$
116,429,064
  
Additions to long-lived assets
  
$
891,849
    
$
785,321
    
$
4,502
    
$
1,681,672
  

Three months ended September 30, 2016
                        
Revenues from outside customers
  
$
11,871,987
    
$
12,428,133
    
$
–
    
$
24,300,120
  
Depreciation, amortization and impairment expenses(1)
   
(276,151
)
    
(874,163
)
    
(2,552
)
    
(1,152,866
)
Direct expenses(2)
   
(8,795,338
)
    
(11,451,439
)
    
(1,065,771
)
    
(21,312,548
)
Segment operating income (loss)
  
$
2,800,498
    
$
102,531
    
$
(1,068,323
)
  
$
1,834,706
  
Financial expense
    
(14,782
)
    
(23,830
)
    
(188,862
)
    
(227,474
)
Income tax benefit (expense)
    
144,915
      
(18,271
)
    
(228,636
)
    
(101,992
)
Income (loss) from continuing operations
  
$
2,930,631
    
$
60,430
    
$
(1,485,821
)
  
$
1,505,240
  
Three months ended September 30, 2015
                                
Revenues from outside customers
  
$
13,838,250
    
$
9,451,198
    
$
–
    
$
23,289,448
  
Depreciation, amortization and impairment expenses(1)
   
(225,820
)
    
(947,199
)
    
(6,917
)
    
(1,179,936
)
Direct expenses(2)
   
(10,642,181
)
    
(9,916,151
)
    
(1,299,705
)
    
(21,858,037
)
Segment operating income (loss)
  
$
2,970,249
    
$
(1,412,152
)
  
$
(1,306,622
)
  
$
251,475
  
Financial income (expense)
    
(18,010
)
    
19,761
      
(318,517
)
    
(316,766
)
Income tax expense
    
(21,949
)
    
–
      
(267,956
)
    
(289,905
)
Income (loss) from continuing operations
  
$
2,930,290
    
$
(1,392,391
)
  
$
(1,893,095
)
  
$
(355,196
)

(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 $24,435,641 and $21,191,580, respectively, as of September 30, 2016 and $24,435,641 and $20,935,609, respectively, as of September 30, 2015.
(4)
Includes segment assets from continuing operations.