SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2011

SEGMENT INFORMATION

NOTE 14. - SEGMENT INFORMATION

The Company's businesses are organized, managed and internally reported as four operating segments.   In the second quarter of 2011, the Company acquired ExtraDev for its Digital division and the Company launched a new corporate identity and logo, along with a new website that grouped the Company under four distinct divisions. In conjunction with this, the Company determined that an expansion of its segment reporting to align with the new internal structure was appropriate. Prior year amounts have been restated to conform to current presentation. A summary of the four reportable segments follows:

DSS Printing	Licenses security printing technologies and manufactures and sells secure documents such as vital records, transcripts, safety paper, secure coupons, voter ballots, event tickets, among others.   In addition, sells general commercial printing services utilizing digital and offset printing capabilities.
DSS Plastics	Manufactures and sells secure and non-secure plastic printed products such as ID cards, event badges and passes, and loyalty and gift cards, among others.    Plastic cards include RFID chips, magnetic strips with variable data, high quality graphics with overt and covert security features.
DSS Packaging	Manufactures and sells secure and non-secure custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty foods and direct marketing industries, among others.
DSS Digital	Develops, installs, hosts and services IT services including remote server and application hosting, cloud computing, secure document systems, back-up and disaster recovery services and customer program development services.

Approximate information concerning the Company’s operations by reportable segment for years ended December 31, 2011 and 2010 is as follows.  The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein:

Year ended December 31, 2011	DSS Printing			DSS Plastics			DSS Packaging		DSS Digital			Corporate			Total
Revenues from external customers	$	4,009,000			2,769,000			5,940,000		666,000			-		$	13,384,000
Interest Expense		8,000			17,000			116,000		13,000			105,000			259,000
Stock based compensation		-			-			-		-			399,000			399,000
Change in fair value of derivative liability		-			-			-		-			361,000			361,000
Depreciation and amortization		141,000			226,000			360,000		23,000			17,000			767,000
Net (loss) profit		(1,636,000	)		(126,000	)		92,000		(34,000	)		(1,518,000	)		(3,222,000	)
Capital Expenditures		15,000			307,000			1,552,000		-			72,000			1,946,000
Identifiable assets		1,459,000			2,106,000			7,381,000		872,000			1,004,000			12,822,000
Revenues from transactions with other operating segments of the Company		769,000			-			-		-			-			769,000
Income tax (benefit)		-			-			-		-			(150,000	)		(150,000	)

Year ended December 31, 2010	DSS Printing			DSS Plastics			DSS Packaging		DSS Digital		Corporate			Total
Revenues from external customers	$	5,338,000			2,291,000		$	5,753,000	$	-	$	-		$	13,382,000
Interest Expense and amortization of note discount		34,000			-			78,000		-		598,000			710,000
Stock based compensation		-			-			-		-		115,000			115,000
Impairment of patent acquisition costs and other intangible assets		377,000			-			-		-		-			377,000
Depreciation and amortization		656,000			299,000			299,000		-		7,000			1,261,000
Net (loss) profit		(2,150,000	)		(483,000	)		54,000		-		(884,000	)		(3,463,000	)
Capital Expenditures		53,000			6,000			1,629,000		-		270,000			1,958,000
Identifiable assets		2,401,000			1,956,000			6,465,000		-		4,126,000			14,948,000
Revenues from transactions with other operating segments of the Company		326,000			-			110,000		-		-			436,000
Other income, net		-			-			-		-		143,000			143,000
Loss on equity investment		-			-			-		-		(121,000	)		(121,000	)
Income tax (benefit)		-			-			-		-		(1,122,000	)		(1,122,000	)
Stock based compensation		224,000			-			18,000		-		181,000			423,000

International revenue, which consists of sales to customers with operations in Canada, Western Europe, Latin America, Africa, Middle East and Asia comprised 3% of total revenue for 2011, (2%- 2010). Revenue is allocated to individual countries by customer based on where the product is shipped to, location of services performed or the location of equipment that is under an annual maintenance agreement. The Company had no long-lived assets in any country other than the United States for any period presented.

Major Customers – During 2011 one customer accounted for 19% of the Company’s consolidated revenue. As of December 31, 2011, this customer accounted for 18% of the Company’s trade accounts receivable balance. During 2010 two customers accounted for 25% and 10% of the Company’s total revenue from continuing operations, respectively. As of December 31, 2010, these customers accounted for 37% and 7% of the Company’s trade accounts receivable balance, respectively. The risk with respect to trade receivables is mitigated by credit evaluations we perform on our customers, the short duration of our payment terms for the significant majority of our customer contracts and by the diversification of our customer base.

.