12.Segment Information

Our operating and reportable segments are currently organized around the following products and services that we offer as part of our core business strategy:

Distributed Generation solutions;

Solar Energy solutions;

Utility Infrastructure solutions; and

Energy Efficiency solutions.

The Distributed Generation and Solar Energy reporting segments, described in greater detail below, had previously been reported on a combined basis under our Distributed Generation segment as they both utilized distributed generation technology solutions in their products and services, and they shared overhead costs. As a result of the utility-scale solar projects awarded to us in July 2014, we expect the Solar Energy operations will be a material portion of our consolidated revenues and operations in 2015 and for the foreseeable future, and it is now being supported by separate overhead costs. In addition, the cost and margin structure of the Solar Energy segment differs from our traditional Distributed Generation segment. For these reasons, we determined it was appropriate to report our Distributed Generation and Solar Energy operations as separate reporting segments commencing in 2015. Our segment information for the three and six month periods ended June 30, 2014 have been reclassified to conform to our current presentation.

Our Chief Operating Decision Maker (“CODM”) reviews revenues including intersegment revenues, gross profit and operating income (loss) before income taxes when evaluating segment performance and allocating resources to each segment. Accordingly, intersegment revenue is included in the segment revenues presented in the tables below and is eliminated from revenues and cost of sales in the “Eliminations and Other” column. The “Eliminations and Other” column also includes various expense items that we do not allocate to our operating segments. These expenses include corporate overhead and corporate-wide items such as legal and professional fees as well as expense items for which we have not identified a reasonable basis for allocation. The accounting policies of the reportable segments are the same as those described in Note 2 of the notes to condensed consolidated financial statements.

Distributed Generation

Our Distributed Generation segment manufactures, installs and operates electric generation equipment “on site” at facilities where the power is used, including commercial, institutional and industrial operations. Our Distributed Generation systems typically utilize our proprietary PowerBlock units or, alternatively, generators sourced from major global generator manufacturers as the power plants for our systems. Our Distributed Generation systems provide a highly dependable backup power supply during power outages, and provide a more efficient and environmentally friendly source of power during high cost periods of peak power demand. These two sources of value benefit both utilities and their large customers.

Solar Energy

Our Solar Energy segment engineers, procures, constructs and maintains solar power generation equipment for utilities, independent power producers, developers who sell power to utilities and industrial, commercial and institutional customers for “on site” power requirements. Our Solar Energy systems use photovoltaic solar panels (which we do not manufacture) to provide utilities and their customers with environmentally friendly power to augment their core power requirements.

Utility Infrastructure

Our Utility Infrastructure segment is focused on helping electric utilities design, build, upgrade and maintain infrastructure that enhances the efficiency of their grid systems.

Our largest source of revenue within our Utility Infrastructure area is our UtilityServices products and services. We have significantly expanded our UtilityServices’ scope of utility relationships, customers and geography over the last few years. Our UtilityServices team provides utilities with transmission and distribution system construction and maintenance, including substation construction and maintenance, advanced metering and lighting installations, and storm restoration. In addition to providing these services directly to utilities, we also perform this work on behalf of utilities for their large industrial and institutional customers, and directly to large oil and gas companies.

Through our Encari, UtilityEngineering and PowerServices teams, we serve the engineering and consulting needs of our utility clients, broadening our offerings to our utility partners. The scope of services that we offer through UtilityEngineering includes technical engineering services for our utility partners and their customers, including design and engineering relating to virtually every element of their transmission and distribution systems, substations and renewable energy facilities. Through PowerServices, we provide management consulting services to utilities and commercial and industrial customers, including planning and quality improvement, technical studies involving reliability analysis and rate analysis, acquisition studies, accident investigations and power supply contracts and negotiations. Our Encari business, which we acquired in October 2013, provides cybersecurity consulting and regulatory compliance services to the utility industry.

Energy Efficiency

We deliver Energy Efficiency products and services to assist our customers in the achievement of their energy efficiency goals. We have two primary product and service offerings in our Energy Efficiency segment: LED lighting fixtures and lamps, and energy efficiency upgrades for our Energy Efficiency Services customers. Our LED lighting products are primarily focused on the utility, commercial and industrial, and retail markets, while our Energy Efficiency Services solutions are focused on serving large energy services companies, referred to as ESCOs. In the future, we plan to bring our LED lighting products to our Energy Efficiency Services customer base. In both of our Energy Efficiency segment product and service lines we deliver highly engineered product solutions and upgrades with strong value propositions that are designed to reduce energy costs, improve operations and benefit the environment.

Summarized financial information concerning our reportable segments is shown in the following tables.


	Three Months Ended June 30, 2015
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	34,263	$	24,985	$	33,264	$	14,860	$	(190)	$	107,182
Cost of Sales (excluding depreciation
and amortization)		22,530		22,695		28,229		9,847		(190)		83,111
Gross Profit		11,733		2,290		5,035		5,013		-		24,071
Operating expenses:
General and administrative		4,723		940		3,347		2,799		4,896		16,705
Selling, marketing and service		1,423		196		361		703		290		2,973
Depreciation and amortization		1,079		32		830		365		306		2,612
Restructuring charges		-		-		-		-		-		-
Total operating expenses		7,225		1,168		4,538		3,867		5,492		22,290
Operating income (loss)		4,508		1,122		497		1,146		(5,492)		1,781
Other income and (expenses):
Interest income and other income		-		-		-		-		2		2
Interest expense		-		-		-		-		(287)		(287)
Income (loss) before income taxes	$	4,508	$	1,122	$	497	$	1,146	$	(5,777)	$	1,496

Total goodwill at June 30, 2015	$	11,403	$	4,914	$	2,325	$	21,568	$	-	$	40,210
Total assets at June 30, 2015	$	115,325	$	16,408	$	54,979	$	45,744	$	37,224	$	269,680


	Three Months Ended June 30, 2014
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	20,205	$	2,108	$	23,770	$	11,407	$	(421)	$	57,069
Cost of Sales (excluding depreciation
and amortization)		13,195		1,885		20,257		7,822		(421)		42,738
Gross Profit		7,010		223		3,513		3,585		-		14,331
Operating expenses:
General and administrative		2,886		470		2,626		2,640		5,048		13,670
Selling, marketing and service		985		112		318		700		351		2,466
Depreciation and amortization		781		24		867		305		160		2,137
Restructuring charges		-		-		-		-		-		-
Total operating expenses		4,652		606		3,811		3,645		5,559		18,273
Operating income (loss)		2,358		(383)		(298)		(60)		(5,559)		(3,942)
Other income and (expenses):
Interest income and other income		-		-		-		-		5		5
Interest expense		-		-		-		-		(292)		(292)
Income (loss) before income taxes	$	2,358	$	(383)	$	(298)	$	(60)	$	(5,846)	$	(4,229)


	Six Months Ended June 30, 2015
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	64,994	$	31,333	$	62,147	$	28,422	$	(205)	$	186,691
Cost of Sales (excluding depreciation
and amortization)		41,411		28,428		53,262		18,395		(205)		141,291
Gross Profit		23,583		2,905		8,885		10,027		-		45,400
Operating expenses:
General and administrative		9,083		1,719		6,220		6,054		9,263		32,339
Selling, marketing and service		2,637		293		697		1,294		800		5,721
Depreciation and amortization		2,149		64		1,606		757		513		5,089
Restructuring charges		-		-		-		-		-		-
Total operating expenses		13,869		2,076		8,523		8,105		10,576		43,149
Operating income (loss)		9,714		829		362		1,922		(10,576)		2,251
Other income and (expenses):
Interest and other income		-		-		-		-		3		3
Interest expense		-		-		-		-		(556)		(556)
Income (loss) before income taxes	$	9,714	$	829	$	362	$	1,922	$	(11,129)	$	1,698

Total capital expenditures YTD 2015	$	3,223	$	268	$	1,918	$	380	$	780	$	6,569


	Six Months Ended June 30, 2014
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	37,195	$	2,613	$	50,598	$	19,881	$	(421)	$	109,866
Cost of Sales (excluding depreciation
and amortization)		23,822		2,424		44,424		14,245		(421)		84,494
Gross Profit		13,373		189		6,174		5,636		-		25,372
Operating expenses:
General and administrative		5,916		977		5,549		4,711		9,561		26,714
Selling, marketing and service		2,036		225		622		1,171		421		4,475
Depreciation and amortization		1,559		48		1,726		665		317		4,315
Restructuring charges		-		-		-		427		-		427
Total operating expenses		9,511		1,250		7,897		6,974		10,299		35,931
Operating income (loss)		3,862		(1,061)		(1,723)		(1,338)		(10,299)		(10,559)
Other income and (expenses):
Interest and other income		-		-		-		-		9		9
Interest expense		-		-		-		-		(592)		(592)
Income (loss) before income taxes	$	3,862	$	(1,061)	$	(1,723)	$	(1,338)	$	(10,882)	$	(11,142)