| Segment Reporting and Foreign Operations |
Note 15 - Segment Reporting and Foreign Operations
Effective January 1, 2017 the Company has changed the way it analyzes and assesses divisional performance of the Company. The Company has therefore re-aligned its operating segments along those division business lines and has created the following operating segments. The Company has retroactively applied these new segment categories to the prior periods presented below for comparative purposes.
| |
● |
Indoor Positioning Analytics: This segment includes Inpixon’s proprietary products and services delivered on premise or in the Cloud as well as our hosted Software-as-a-Service (SaaS) based solutions. Our Indoor Positioning Analytics product is based on a unique and patented sensor technology that detects and locates accessible cellular, Wi-Fi and Bluetooth devices and then uses a lightning fast data-analytics engine to deliver actionable insights and intelligent reports for security, marketing, asset management, etc. |
| |
|
|
| |
● |
Infrastructure: This segment includes third party hardware, software and related maintenance/warranty products and services that Inpixon resells to commercial and government customers. It includes but is not limited to products for enterprise computing; storage; virtualization; networking; etc. as well as services including custom application/software design; architecture and development; staff augmentation and project management. |
The following tables present key financial information of the Company’s reportable segments before unallocated corporate expenses (in thousands):
| |
|
Indoor Positioning
Analytics
|
|
|
Infrastructure |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
| For the Three Months Ended June 30, 2018: |
|
|
|
| |
|
|
|
| Net revenues |
|
$ |
1,274 |
|
|
$ |
554 |
|
|
$ |
1,828 |
|
| Cost of net revenues |
|
$ |
(369 |
) |
|
$ |
(448 |
) |
|
$ |
(817 |
) |
| Gross profit |
|
$ |
905 |
|
|
$ |
106 |
|
|
$ |
1,011 |
|
| Gross margin % |
|
|
71 |
% |
|
|
19 |
% |
|
|
55 |
% |
| Depreciation and amortization |
|
$ |
120 |
|
|
$ |
406 |
|
|
$ |
526 |
|
| Amortization of intangibles |
|
$ |
804 |
|
|
$ |
519 |
|
|
$ |
1,323 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| For the Three Months Ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
$ |
1,156 |
|
|
$ |
13,940 |
|
|
$ |
15,096 |
|
| Cost of net revenues |
|
$ |
(380 |
) |
|
$ |
(11,332 |
) |
|
$ |
(11,712 |
) |
| Gross profit |
|
$ |
776 |
|
|
$ |
2,608 |
|
|
$ |
3,384 |
|
| Gross margin % |
|
|
67 |
% |
|
|
19 |
% |
|
|
22 |
% |
| Depreciation and amortization |
|
$ |
93 |
|
|
$ |
340 |
|
|
$ |
433 |
|
| Amortization of intangibles |
|
$ |
863 |
|
|
$ |
519 |
|
|
$ |
1,382 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| For the Six Months Ended June 30, 2018: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
$ |
2,121 |
|
|
$ |
1,801 |
|
|
$ |
3,922 |
|
| Cost of net revenues |
|
$ |
(604 |
) |
|
$ |
(1,072 |
) |
|
$ |
(1,676 |
) |
| Gross profit |
|
$ |
1,517 |
|
|
$ |
729 |
|
|
$ |
2,246 |
|
| Gross margin % |
|
|
72 |
% |
|
|
40 |
% |
|
|
57 |
% |
| Depreciation and amortization |
|
$ |
279 |
|
|
$ |
761 |
|
|
$ |
1,040 |
|
| Amortization of intangibles |
|
$ |
1,607 |
|
|
$ |
1,038 |
|
|
$ |
2,645 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| For the Six Months Ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
$ |
2,137 |
|
|
$ |
26,441 |
|
|
$ |
28,578 |
|
| Cost of net revenues |
|
$ |
(723 |
) |
|
$ |
(21,182 |
) |
|
$ |
(21,905 |
) |
| Gross profit |
|
$ |
1,414 |
|
|
$ |
5,259 |
|
|
$ |
6,673 |
|
| Gross margin % |
|
|
66 |
% |
|
|
20 |
% |
|
|
23 |
% |
| Depreciation and amortization |
|
$ |
168 |
|
|
$ |
665 |
|
|
$ |
833 |
|
| Amortization of intangibles |
|
$ |
1,729 |
|
|
$ |
1,038 |
|
|
$ |
2,767 |
|
Reconciliation of reportable segments’ combined income from operations to the consolidated loss before income taxes is as follows (in thousands):
| |
|
For the Three Months Ended
June 30, |
|
|
For the Six Months Ended
June 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Income from operations of reportable segments |
|
$ |
1,011 |
|
|
$ |
3,384 |
|
|
$ |
2,246 |
|
|
$ |
6,673 |
|
| Unallocated operating expenses |
|
|
(7,460 |
) |
|
|
(8,614 |
) |
|
|
(14,303 |
) |
|
|
(17,260 |
) |
| Interest expense |
|
|
(356 |
) |
|
|
(1,344 |
) |
|
|
(1,638 |
) |
|
|
(2,027 |
) |
| Other income (expense) |
|
|
950 |
|
|
|
152 |
|
|
|
1,596 |
|
|
|
143 |
|
| Loss from discontinued operations |
|
|
-- |
|
|
|
(9 |
) |
|
|
-- |
|
|
|
(17 |
) |
| Consolidated loss before income taxes |
|
$ |
(5,855 |
) |
|
$ |
(6,431 |
) |
|
$ |
(12,099 |
) |
|
$ |
(12,488 |
) |
The Company’s operations are located primarily in the United States, Canada 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 (in thousands):
| |
|
United |
|
|
|
|
|
Saudi |
|
|
|
|
|
|
|
|
|
|
| |
|
States |
|
|
Canada |
|
|
Arabia |
|
|
India |
|
|
Eliminations |
|
|
Total |
|
| For the Three Months Ended June 30, 2018: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues by geographic area |
|
$ |
1,823 |
|
|
$ |
5 |
|
|
$ |
-- |
|
|
$ |
74 |
|
|
$ |
(74 |
) |
|
$ |
1,828 |
|
| Operating income (loss) by geographic area |
|
$ |
(6,078 |
) |
|
$ |
(387 |
) |
|
$ |
-- |
|
|
$ |
16 |
|
|
$ |
-- |
|
|
$ |
(6,449 |
) |
| Net income (loss) by geographic area |
|
$ |
(5,484 |
) |
|
$ |
(387 |
) |
|
$ |
-- |
|
|
$ |
16 |
|
|
$ |
-- |
|
|
$ |
(5,855 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Three Months Ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues by geographic area |
|
$ |
15,025 |
|
|
$ |
70 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
15,096 |
|
| Operating loss by geographic area |
|
$ |
(4,784 |
) |
|
$ |
(447 |
) |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
(5,230 |
) |
| Net loss by geographic area |
|
$ |
(5,975 |
) |
|
$ |
(447 |
) |
|
$ |
(9 |
) |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
(6,431 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Six Months Ended June 30, 2018: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues by geographic area |
|
$ |
3,911 |
|
|
$ |
11 |
|
|
$ |
-- |
|
|
$ |
126 |
|
|
$ |
(126 |
) |
|
$ |
3,922 |
|
| Operating income (loss) by geographic area |
|
$ |
(11,195 |
) |
|
$ |
(876 |
) |
|
$ |
-- |
|
|
$ |
14 |
|
|
$ |
-- |
|
|
$ |
(12,057 |
) |
| Net income (loss) by geographic area |
|
$ |
(11,233 |
) |
|
$ |
(880 |
) |
|
$ |
-- |
|
|
$ |
14 |
|
|
$ |
-- |
|
|
$ |
(12,099 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Six Months Ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues by geographic area |
|
$ |
28,452 |
|
|
$ |
126 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
28,578 |
|
| Operating loss by geographic area |
|
$ |
(9,739 |
) |
|
$ |
(848 |
) |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
(10,587 |
) |
| Net loss by geographic area |
|
$ |
(11,623 |
) |
|
$ |
(848 |
) |
|
$ |
(17 |
) |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
(12,488 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of June 30, 2018: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Identifiable assets by geographic area |
|
$ |
24,557 |
|
|
$ |
269 |
|
|
$ |
-- |
|
|
$ |
66 |
|
|
$ |
-- |
|
|
$ |
24,892 |
|
| Long lived assets by geographic area |
|
$ |
11,964 |
|
|
$ |
133 |
|
|
$ |
-- |
|
|
$ |
9 |
|
|
$ |
-- |
|
|
$ |
12,106 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2017: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Identifiable assets by geographic area |
|
$ |
27,189 |
|
|
$ |
432 |
|
|
$ |
23 |
|
|
$ |
47 |
|
|
$ |
-- |
|
|
$ |
27,691 |
|
| Long lived assets by geographic area |
|
$ |
14,883 |
|
|
$ |
318 |
|
|
$ |
-- |
|
|
$ |
14 |
|
|
$ |
-- |
|
|
$ |
15,215 |
|
|