| Segment Reporting and Foreign Operations |
Note 17 – Segment Reporting and Foreign Operations
The Company operates in the following business segments:
· |
IT Commercial: These services include enterprise computing and storage, virtualization, business continuity, networking and information technology business consulting services to commercial organizations. |
· |
IT Government: Information technology and telecommunications solutions and services primarily to government agencies in the United States, (Domestic) and Saudi Arabia (Foreign). The operations include systems integration and consulting, including, but not limited to: custom application/software design, architecture and development, data center design and operations services, command control, computer communication, intelligence (C4I) system consulting, program management and security solutions and services. |
· |
eSolutions: Internet based hosting eServices to its customers located in Europe (Foreign), Canada (Foreign) and the United States (Domestic) by providing Cloud-based data analytics and enterprise solutions to the media, publishing, and entertainment industries. |
| |
|
IT Commercial |
|
|
IT Government: |
|
|
eSolutions |
|
|
Unallocated/
Corporate/Other
|
|
|
Total |
|
Three months ended March 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
|
$ |
13,965,000 |
|
|
$ |
1,382,000 |
|
|
$ |
973,000 |
|
|
$ |
-- |
|
|
$ |
16,320,000 |
|
Cost of revenues |
|
$ |
(10,951,000 |
) |
|
$ |
(816,000 |
) |
|
$ |
(202,000 |
) |
|
$ |
-- |
|
|
$ |
(11,969,000 |
) |
Gross margin |
|
$ |
3,013,000 |
|
|
$ |
566,000 |
|
|
$ |
771,000 |
|
|
$ |
-- |
|
|
$ |
4,350,000 |
|
Depreciation and amortization |
|
$ |
21,000 |
|
|
$ |
7,000 |
|
|
$ |
11,000 |
|
|
$ |
-- |
|
|
$ |
39,000 |
|
Amortization of Intangibles |
|
$ |
192,000 |
|
|
$ |
-- |
|
|
$ |
136,000 |
|
|
$ |
-- |
|
|
$ |
328,000 |
|
Segment profit (loss) |
|
$ |
(99,000 |
) |
|
$ |
84,000 |
|
|
$ |
223,000 |
|
|
$ |
(1,032,000 |
) |
|
$ |
(824,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
|
$ |
4,276,000 |
|
|
$ |
1,086,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
5,362,000 |
|
Cost of revenues |
|
$ |
(3,313,000 |
) |
|
$ |
(593,000 |
) |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
(3,906,000 |
) |
Gross margin |
|
$ |
963,000 |
|
|
$ |
493,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
1,456,000 |
|
Depreciation |
|
$ |
8,000 |
|
|
$ |
10,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
18,000 |
|
Amortization of Intangibles |
|
$ |
63,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
63,000 |
|
Segment profit (loss) |
|
$ |
(19,000 |
) |
|
$ |
128,000 |
|
|
$ |
-- |
|
|
$ |
(1,604,000 |
) |
|
$ |
(1,495,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property and equipment |
|
$ |
223,000 |
|
|
$ |
9,000 |
|
|
$ |
31,000 |
|
|
$ |
2,000 |
|
|
$ |
265,000 |
|
Property and equipment additions
|
|
$ |
9,000 |
|
|
$ |
1,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
10,000 |
|
Intangible assets and goodwill |
|
$ |
9,091,000 |
|
|
$ |
-- |
|
|
$ |
3,676,000 |
|
|
$ |
-- |
|
|
$ |
12,767,000 |
|
Intangible assets and goodwill additions |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
59,000 |
|
|
$ |
-- |
|
|
$ |
59,000 |
|
Total segment assets |
|
$ |
31,906,000 |
|
|
$ |
3,765,000 |
|
|
$ |
9,150,000 |
|
|
$ |
(3,141,000 |
) |
|
$ |
41,680,000 |
|
The Company’s operations are located primarily in the United States and Saudi Arabia. Revenues by
geographic area are attributed by country of domicile of our subsidiaries. The financial data by geographic area are as follows:
| |
|
United |
|
|
Saudi |
|
|
|
|
|
|
|
| |
|
States |
|
|
Arabia |
|
|
Eliminations |
|
|
Total |
|
Three Months Ended March 31, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by geographic area |
|
$ |
16,320,000 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
16,320,000 |
|
Operating loss by geographic area |
|
$ |
(609,000 |
) |
|
$ |
(86,000 |
) |
|
$ |
-- |
|
|
$ |
(695,000 |
) |
Net loss by geographic
area |
|
$ |
(738,000 |
) |
|
$ |
(86,000 |
) |
|
$ |
-- |
|
|
$ |
(824,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by geographic area |
|
$ |
5,317,000 |
|
|
$ |
45,000 |
|
|
$ |
-- |
|
|
$ |
5,362,000 |
|
Operating loss by geographic area |
|
$ |
(888,000 |
) |
|
$ |
(74,000 |
) |
|
$ |
-- |
|
|
$ |
(962,000 |
) |
Net loss by geographic area |
|
$ |
(1,421,000 |
) |
|
$ |
(74,000 |
) |
|
$ |
-- |
|
|
$ |
(1,495,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets by geographic area |
|
$ |
40,904,000 |
|
|
$ |
776,000 |
|
|
$ |
-- |
|
|
$ |
41,680,000 |
|
Long lived assets by geographic area |
|
$ |
13,152,000 |
|
|
$ |
4,000 |
|
|
$ |
-- |
|
|
$ |
13,156,000 |
|
|