Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting and Foreign Operations

v3.10.0.1
Segment Reporting and Foreign Operations
6 Months Ended
Jun. 30, 2018
Segment Reporting and Foreign Operations [Abstract]  
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