Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.10.0.1
SEGMENT INFORMATION
9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
a.    The Company and its subsidiaries operate 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 and its subsidiaries operate in two continuing business segments and follow the requirements of FASB ASC 280-10.
The Company’s reportable 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 reportable segments are the same as those used by the Company in the preparation of its annual financial statements. The Company evaluates performance based on 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) from operations, and total assets as of September 30, 2018 and 2017:
 
Training and
Simulation
Division
 
Power Systems
Division
 
Corporate
Expenses
 
Total
Company
Nine months ended September 30, 2018
 
 
 
 
 
 
 
Revenues from outside customers
$
43,576,153

 
$
29,391,443

 
$

 
$
72,967,596

Depreciation and amortization(1)
(605,195
)
 
(2,159,094
)
 

 
(2,764,289
)
Direct expenses(2)
(34,347,504
)
 
(30,102,162
)
 
(2,987,017
)
 
(67,436,683
)
Segment operating income (loss)
$
8,623,454

 
$
(2,869,813
)
 
$
(2,987,017
)
 
$
2,766,624

Financial expense
(182,524
)
 
10,148

 
(523,856
)
 
(696,232
)
Income tax expense
(144,221
)
 

 
(506,544
)
 
(650,765
)
Net income (loss)
$
8,296,709

 
$
(2,859,665
)
 
$
(4,017,417
)
 
$
1,419,627

Segment assets(3)
$
54,996,173

 
$
57,639,253

 
$
3,116,700

 
$
115,752,126

Additions to long-lived assets
$
965,651

 
$
782,556

 
$

 
$
1,748,207

Nine months ended September 30, 2017
 
 
 
 
 
 
 
Revenues from outside customers
$
35,139,969

 
$
34,586,610

 
$

 
$
69,726,579

Depreciation and amortization(1)
(772,736
)
 
(2,230,750
)
 
(3,455
)
 
(3,006,941
)
Direct expenses(2)
(29,723,546
)
 
(33,425,392
)
 
(2,649,455
)
 
(65,798,393
)
Segment operating income (loss)
$
4,643,687

 
$
(1,069,532
)
 
$
(2,652,910
)
 
$
921,245

Financial expense
(77,975
)
 
(170,381
)
 
(501,611
)
 
(749,967
)
Income tax benefit (expense)
(105,000
)
 
44,913

 
(685,908
)
 
(745,995
)
Net income (loss)
$
4,460,712

 
$
(1,195,000
)
 
$
(3,840,429
)
 
$
(574,717
)
Segment assets(3)
$
48,550,296

 
$
57,675,628

 
$
3,314,767

 
$
109,540,691

Additions to long-lived assets
$
2,454,099

 
$
1,410,393

 
$

 
$
3,864,492

Three months ended September 30, 2018
 
 
 
 
 
 
 
Revenues from outside customers
$
14,665,902

 
$
9,178,575

 
$

 
$
23,844,477

Depreciation and amortization(1)
(208,055
)
 
(688,935
)
 

 
(896,990
)
Direct expenses(2)
(11,509,826
)
 
(9,173,877
)
 
(1,122,503
)
 
(21,806,206
)
Segment operating income (loss)
$
2,948,021

 
$
(684,237
)
 
$
(1,122,503
)
 
$
1,141,281

Financial expense
(43,545
)
 
13,540

 
(143,340
)
 
(173,345
)
Income tax expense
(82,670
)
 

 
(144,710
)
 
(227,380
)
Net income (loss)
$
2,821,806

 
$
(670,697
)
 
$
(1,410,553
)
 
$
740,556

Three months ended September 30, 2017
 
 
 
 
 
 
 
Revenues from outside customers
$
14,596,967

 
$
11,333,474

 
$

 
$
25,930,441

Depreciation, amortization and impairment expenses(1)
(224,611
)
 
(698,939
)
 
(1,183
)
 
(924,733
)
Direct expenses(2)
(11,672,943
)
 
(11,269,961
)
 
(810,428
)
 
(23,753,332
)
Segment operating income (loss)
$
2,699,413

 
$
(635,429
)
 
$
(811,611
)
 
$
1,252,376

Financial expense
(40,706
)
 
7,367

 
(167,584
)
 
(200,923
)
Income tax expense
(35,000
)
 
401

 
(228,636
)
 
(263,235
)
Net income (loss)
$
2,623,707

 
$
(627,658
)
 
$
(1,207,831
)
 
$
788,218

(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 Division and Power Systems Division totaled $24,435,641 and $21,702,395, respectively, as of September 30, 2018 and $24,435,641 and $21,586,500, respectively, as of September 30, 2017.