Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting and Foreign Operations

v3.8.0.1
Segment Reporting and Foreign Operations
9 Months Ended
Sep. 30, 2017
Segment Reporting and Foreign Operations [Abstract]  
Segment Reporting and Foreign Operations

Note 17 - 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 September 30, 2017:        
         
Net revenues   $ 871     $ 11,053     $ 11,924  
Cost of net revenues   $ (266 )   $ (9,407 )   $ (9,673 )
Gross profit   $ 605     $ 1,646     $ 2,251  
Gross margin %     69 %     15 %     19 %
Depreciation and amortization   $ 122     $ 369     $ 491  
Amortization of intangibles   $ 808     $ 519     $ 1,327  
                         
For the Three Months Ended September 30, 2016:                        
                         
Net revenues   $ 1,368     $ 9,872     $ 11,240  
Cost of net revenues   $ (488 )   $ (7,654 )   $ (8,142 )
Gross profit   $ 880     $ 2,218     $ 3,098  
Gross margin %     64 %     22 %     28 %
Depreciation and amortization   $ 128     $ 206     $ 334  
Amortization of intangibles   $ 864     $ 192     $ 1,056  
                         
For the Nine Months Ended September 30, 2017:                        
                         
Net revenues   $ 3,006     $ 37,496     $ 40,502  
Cost of net revenues   $ (990 )   $ (30,588 )   $ (31,578 )
Gross profit   $ 2,016     $ 6,908     $ 8,924  
Gross margin %     67 %     18 %     22 %
Depreciation and amortization   $ 290     $ 1,034     $ 1,324  
Amortization of intangibles   $ 2,537     $ 1,557     $ 4,094  
                         
For the Nine Months Ended September 30, 2016:                        
                         
Net revenues   $ 3,674     $ 34,985     $ 38,659  
Cost of net revenues   $ (1,065 )   $ (27,105 )   $ (28,170 )
Gross profit   $ 2,609     $ 7,880     $ 10,489  
Gross margin %     71 %     23 %     27 %
Depreciation and amortization   $ 309     $ 575     $ 884  
Amortization of intangibles   $ 2,593     $ 576     $ 3,169  

 

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
September 30,
    For the Nine Months Ended 
September 30,
 
    2017     2016     2017     2016  
Income from operations of reportable segments   $ 2,251     $ 3,098     $ 8,924     $ 10,489  
Unallocated operating expenses     (16,845 )     (7,240 )     (34,105 )     (22,761 )
Interest expense     (694 )     (639 )     (2,721 )     (1,037 )
Other income (expense)     656       61       799       108  
Loss from discontinued operations     (9 )     --       (26 )     --  
Consolidated loss before income taxes   $ (14,641 )   $ (4,720 )   $ (27,129 )   $ (13,201 )

 

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     Eliminations     Total  
For the Three Months Ended September 30, 2017:                              
Revenues by geographic area   $ 11,917     $ 7     $ --     $ --     $ 11,924  
Operating loss by geographic area   $ (14,097 )   $ (497 )   $ --     $ --     $ (14,594 )
Net income (loss) by geographic area   $ (14,135 )   $ (497 )   $ (9 )   $ --     $ (14,641 )
                                         
For the Three Months Ended September 30, 2016:                                        
Revenues by geographic area   $ 11,231     $ 9     $ --     $ --     $ 11,240  
Operating loss by geographic area   $ (3,622 )   $ (511 )   $ (9 )   $ --     $ (4,142 )
Net loss by geographic area   $ (4,200 )   $ (511 )   $ (9 )   $ --     $ (4,720 )
                                         
For the Nine Months Ended September 30, 2017:                                        
Revenues by geographic area   $ 40,368     $ 134     $ --     $ --     $ 40,502  
Operating loss by geographic area   $ (23,834 )   $ (1,347 )   $ --     $ --     $ (25,181 )
Net loss by geographic area   $ (25,756 )   $ (1,347 )   $ (26 )   $ --     $ (27,129 )
                                         
For the Nine Months Ended September 30, 2016:                                        
Revenues by geographic area   $ 38,605     $ 54     $ --     $ --     $ 38,659  
Operating loss by geographic area   $ (10,903 )   $ (1,344 )   $ (25 )   $ --     $ (12,272 )
Net loss by geographic area   $ (11,832 )   $ (1,344 )   $ (25 )   $ --     $ (13,201 )
                                         
As of September 30, 2017:                                        
Identifiable assets by geographic area   $ 34,591     $ 591     $ 23     $ --     $ 35,205  
Long lived assets by geographic area   $ 16,981     $ 397     $ --     $ --     $ 17,378  
                                         
As of December 31, 2016:                                        
Identifiable assets by geographic area   $ 66,050     $ 400     $ 23     $ --     $ 66,473  
Long lived assets by geographic area   $ 29,843     $ 319     $ --     $ --     $ 30,162