Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SEGMENT INFORMATION

v2.4.0.6
NOTE 4: SEGMENT INFORMATION
9 Months Ended
Sep. 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 three and nine months ended September 30, 2012 and 2011:

   
Training and
Simulation
Division
   
Battery and
Power Systems
Division
   
Corporate
Expenses
   
Discontinued
   
Total
Company
 
Three months ended September 30, 2012
                             
Revenues from outside customers
  $ 16,442,769     $ 4,992,294     $     $     $ 21,435,063  
Depreciation, amortization and impairment expenses(1)
    (278,206 )     (282,069 )     (11,590 )           (571,865 )
Direct expenses(2) 
    (14,415,654 )     (4,675,749 )     (1,025,316 )           (20,116,719 )
Segment net income (loss)
  $ 1,748,909     $ 34,476     $ (1,036,906 )   $     $ 746,479  
Financial expense
    (8,045 )     (84,012 )     (94,244 )           (186,301 )
Income tax income (expense)
    60,032             (186,969 )           (126,937 )
Net income (loss) continuing operations
  $ 1,800,896     $ (49,536 )   $ (1,318,119 )   $     $ 433,241  
Net income discontinued operations
                      64,848       64,848  
Net income (loss)
  $ 1,800,896     $ (49,536 )   $ (1,318,119 )   $ 64,848     $ 498,089  
Three months ended September 30, 2011
                                       
Revenues from outside customers
  $ 16,682,517     $ 4,455,415     $     $     $ 21,137,932  
Depreciation, amortization and impairment expenses(1)
    (464,374 )     (280,638 )     (14,142 )           (759,154 )
Direct expenses(2) 
    (15,459,953 )     (4,258,413 )     (1,484,375 )           (21,202,741 )
Segment net income (loss)
  $ 758,190     $ (83,636 )   $ (1,498,517 )   $     $ (823,963 )
Financial income (expense)
    (27,504 )     (324,830 )     199,566             (152,768 )
Income tax income (expense)
    137,409             (137,498 )           (89 )
Net income (loss) continuing operations
  $ 868,095     $ (408,466 )   $ (1,436,449 )   $     $ (976,820 )
Net loss discontinued operations
                      (549,022 )     (549,022 )
Net income (loss)
  $ 868,095     $ (408,466 )   $ (1,436,449 )   $ (549,026 )   $ (1,525,842 )
Nine months ended September 30, 2012
                                       
Revenues from outside customers
  $ 43,843,374     $ 14,072,527     $     $     $ 57,915,901  
Depreciation, amortization and impairment expenses(1)
    (844,575 )     (843,912 )     (38,087 )           (1,726,574 )
Direct expenses(2) 
    (39,592,292 )     (13,550,634 )     (3,913,670 )           (57,056,596 )
Segment net income (loss)
  $ 3,406,507     $ (322,019 )   $ (3,951,757 )   $     $ (867,269 )
Financial expense
    (28,626 )     (162,168 )     (374,507 )           (565,301 )
Income tax expense
    (37,872 )           (486,219 )           (524,091 )
Net income (loss) continuing operations
  $ 3,340,009     $ (484,187 )   $ (4,812,483 )   $     $ (1,956,661 )
Net loss discontinued operations
                      (1,506,353 )     (1,506,353 )
Net income (loss)
  $ 3,340,009     $ (484,187 )   $ (4,812,483 )   $ (1,506,353 )   $ (3,463,014 )
Segment assets(3) 
  $ 52,685,833     $ 24,597,352     $ 191,718     $ 1,216,646     $ 78,691,549  
Additions to long-lived assets
  $ 356,681     $ 313,904     $     $     $ 670,585  
Nine months ended September 30, 2011
                                       
Revenues from outside customers
  $ 31,393,117     $ 12,777,002     $     $     $ 44,170,119  
Depreciation, amortization and impairment expenses(1)
    (1,394,059 )     (812,383 )     (43,704 )           (2,250,146 )
Direct expenses(2) 
    (28,146,936 )     (12,824,928 )     (3,907,266 )           (44,879,130 )
Segment net income (loss)
  $ 1,852,122     $ (860,309 )   $ (3,950,970 )   $     $ (2,959,157 )
Financial income (expense)
    (27,976 )     (169,769 )     34,872             (162,873 )
Income tax income (expense)
    81,165             (362,500 )           (281,335 )
Net income (loss) continuing operations
  $ 1,905,311     $ (1,030,078 )   $ (4,278,598 )   $     $ (3,403,365 )
Net loss discontinued operations
                      (2,837,061 )     (2,837,061 )
Net income (loss)
  $ 1,905,311     $ (1,030,078 )   $ (4,278,598 )   $ (2,837,061 )   $ (6,240,426 )
Segment assets(3) 
  $ 46,133,387     $ 24,505,138     $ (881,726 )   $ 12,266,353     $ 82,023,152  
Additions to long-lived assets
  $ 1,786,535     $ 691,243     $ 3,345     $ 121,069     $ 2,602,192  

(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 $5,846,322, respectively, as of September 30, 2012 and $24,435,641 and $6,161,318, respectively, as of September 30, 2011.