Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.19.3
SEGMENT INFORMATION
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
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 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 of which is the segment’s operating income and the other of which is the segment’s contribution to the Company’s future strategic growth.
The following is information about reported segment revenues, income (losses) from operations, and total assets as of September 30, 2019 and 2018:
 
Training and
Simulation
Division
 
Power Systems
Division
 
Corporate
Expenses
 
Total
Company
Nine months ended September 30, 2019
 
 
 
 
 
 
 
Revenues from outside customers
$
44,252,601

 
$
23,366,333

 
$

 
$
67,618,934

Depreciation and amortization(1)
(581,466
)
 
(1,884,194
)
 

 
(2,465,660
)
Direct expenses(2)
(35,677,099
)
 
(25,234,110
)
 
(3,740,107
)
 
(64,651,316
)
Segment operating income (loss)
$
7,994,036

 
$
(3,751,971
)
 
$
(3,740,107
)
 
$
501,958

Total other expense
(178,868
)
 
(207,986
)
 
(689,117
)
 
(1,075,971
)
Income tax expense
(154,496
)
 
11,359

 
(360,910
)
 
(504,047
)
Net income (loss)
$
7,660,672

 
$
(3,948,598
)
 
$
(4,790,134
)
 
$
(1,078,060
)
Segment assets(3)(4)
$
63,077,725

 
$
63,687,157

 
$
4,129,028

 
$
130,893,910

Additions to long-lived assets
$
1,481,270

 
$
1,645,850

 
$
382,755

 
$
3,509,875

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)
(34,352,017
)
 
(30,103,527
)
 
(2,987,017
)
 
(67,442,561
)
Segment operating income (loss)
$
8,618,941

 
$
(2,871,178
)
 
$
(2,987,017
)
 
$
2,760,746

Total other expense
(178,011
)
 
11,513

 
(523,856
)
 
(690,354
)
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

Three months ended September 30, 2019
 
 
 
 
 
 
 
Revenues from outside customers
$
14,893,811

 
$
8,679,920

 
$

 
$
23,573,731

Depreciation and amortization(1)
(199,002
)
 
(603,889
)
 

 
(802,891
)
Direct expenses(2)
(11,779,536
)
 
(8,682,002
)
 
(1,788,817
)
 
(22,250,355
)
Segment operating income (loss)
2,915,273

 
(605,971
)
 
(1,788,817
)
 
520,485

Total other expense
(59,495
)
 
(76,749
)
 
(260,779
)
 
(397,023
)
Income tax expense
(59,896
)
 
11,359

 
(138,248
)
 
(186,785
)
Net income (loss)
$
2,795,882

 
$
(671,361
)
 
$
(2,187,844
)
 
$
(63,323
)
Three months ended September 30, 2018
 
 
 
 
 
 
 
Revenues from outside customers
$
14,665,902

 
$
9,178,575

 
$

 
$
23,844,477

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

 
(896,990
)
Direct expenses(2)
(11,507,506
)
 
(9,174,676
)
 
(1,122,503
)
 
(21,804,685
)
Segment operating income (loss)
$
2,950,341

 
$
(685,036
)
 
$
(1,122,503
)
 
$
1,142,802

Total other expense
(45,865
)
 
14,340

 
(143,341
)
 
(174,866
)
Income tax expense
(82,670
)
 

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

 
$
(670,696
)
 
$
(1,410,554
)
 
$
740,556

(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, 2019 and 2018.
(4)
Out of those amounts, right-of-use assets for the Company’s Training and Simulation Division and Power Systems Division totaled $558,501and $5,328,742, respectively, as of September 30, 2019.