SEGMENT REPORTING

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 14. SEGMENT REPORTING

We report our segment results based on our geographic areas of operations, North America and International. These segments have similarities from a product perspective, but management believes that due to operational differences, such as sales models and regulatory environments, information about the segment would be useful to readers of the financial statements.

● North America includes our PDC drill bit and specialty tool sales and contract services business in the United States, Canada and Mexico, which have been aggregated

● International includes our specialty tool rental business in the Middle East

Revenues and certain operating expenses are directly attributable to our segments.

Unallocated corporate costs primarily include corporate shared costs, such as payroll and compensation, professional fees, and rent, as well as costs associated with certain shared research and development activities.

Our operating segments are not evaluated using asset information. Prior periods have been restated to conform with the current year presentation. This change was made due to international revenue becoming more significant in the current year.

SUPERIOR DRILLING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information about our segments:

	Year Ended December 31,
	2023			2022
Revenues:
North America	$	17,908,909		$	16,917,259
International		3,064,642			2,180,428
Total revenue	$	20,973,551		$	19,097,687
Operating income:
North America	$	11,727,062		$	9,672,853
International		(308,655	)		(3,551	)
Corporate costs, unallocated		(9,641,442	)		(7,732,852	)
Total operating income	$	1,776,965		$	1,936,450
Depreciation expense:
North America	$	487,021		$	634,388
International		800,973			702,921
Total depreciation expense	$	1,287,994		$	1,337,309

North America revenue includes revenue from operations in Mexico totaling approximately $69,000 and $145,000 for the years ended December 31, 2023 and 2022, respectively. The remainder of the North America revenue was derived from operations in the United States of America.

Information about products and services

See Note 2 – Revenue.

Information about geographic areas

The following table summarizes net property, plant and equipment by geographic location:

	December 31,
	2023		2022
Property, plant and equipment, net:
United States	$	6,158,853	$	6,560,435
Other countries		5,083,398		2,016,416
Total property, plant and equipment, net	$	11,242,251	$	8,576,851

SUPERIOR DRILLING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS