12.Segment Information

Our operating and reporting 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 the Solar Energy operations became a material portion of our consolidated revenues and operations in 2015 and we expect that to continue 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 nine month periods ended September 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 reporting 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 reporting segments is shown in the following tables.


	Three Months Ended September 30, 2015
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	37,616	$	15,744	$	34,693	$	19,031	$	(102)	$	106,982
Cost of Sales (excluding depreciation
and amortization)		24,311		14,740		29,025		12,103		(102)		80,077
Gross Profit		13,305		1,004		5,668		6,928		-		26,905
Operating expenses:
General and administrative		5,083		919		3,374		3,093		5,526		17,995
Selling, marketing and service		1,015		132		461		597		310		2,515
Depreciation and amortization		1,092		45		849		388		333		2,707
Restructuring charges		-		-		-		-		-		-
Total operating expenses		7,190		1,096		4,684		4,078		6,169		23,217
Operating income (loss)		6,115		(92)		984		2,850		(6,169)		3,688
Other income and (expenses):
Interest income and other income		-		-		-		-		1		1
Interest expense		-		-		-		-		(312)		(312)
Income (loss) before income taxes	$	6,115	$	(92)	$	984	$	2,850	$	(6,480)	$	3,377

Total goodwill at September 30, 2015	$	11,403	$	4,914	$	2,325	$	21,568	$	-	$	40,210
Total assets at September 30, 2015	$	119,197	$	29,982	$	49,587	$	48,474	$	42,178	$	289,418


	Three Months Ended September 30, 2014
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	19,664	$	6,282	$	22,460	$	16,806	$	(168)	$	65,044
Cost of Sales (excluding depreciation
and amortization)		12,026		5,580		19,145		10,390		(168)		46,973
Gross Profit		7,638		702		3,315		6,416		-		18,071
Operating expenses:
General and administrative		3,085		530		2,738		2,744		5,183		14,280
Selling, marketing and service		1,062		111		536		616		(189)		2,136
Depreciation and amortization		786		25		886		319		165		2,181
Restructuring charges		-		-		-		-		-		-
Total operating expenses		4,933		666		4,160		3,679		5,159		18,597
Operating income (loss)		2,705		36		(845)		2,737		(5,159)		(526)
Other income and (expenses):
Interest income and other income		-		-		-		-		5		5
Interest expense		-		-		-		-		(329)		(329)
Income (loss) before income taxes	$	2,705	$	36	$	(845)	$	2,737	$	(5,483)	$	(850)


	Nine Months Ended September 30, 2015
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	102,612	$	47,076	$	96,840	$	47,452	$	(307)	$	293,673
Cost of Sales (excluding depreciation
and amortization)		65,723		43,168		82,287		30,497		(307)		221,368
Gross Profit		36,889		3,908		14,553		16,955		-		72,305
Operating expenses:
General and administrative		14,166		2,638		9,595		9,147		14,788		50,334
Selling, marketing and service		3,652		424		1,158		1,891		1,111		8,236
Depreciation and amortization		3,241		109		2,454		1,145		847		7,796
Restructuring charges		-		-		-		-		-		-
Total operating expenses		21,059		3,171		13,207		12,183		16,746		66,366
Operating income (loss)		15,830		737		1,346		4,772		(16,746)		5,939
Other income and (expenses):
Interest and other income		-		-		-		-		4		4
Interest expense		-		-		-		-		(868)		(868)
Income (loss) before income taxes	$	15,830	$	737	$	1,346	$	4,772	$	(17,610)	$	5,075

Total capital expenditures YTD 2015	$	4,964	$	383	$	2,313	$	457	$	896	$	9,013


	Nine Months Ended September 30, 2014
	Distributed		Solar		Utility		Energy		Eliminations
	Generation		Energy		Infrastructure		Efficiency		and Other		Total
Revenues	$	56,859	$	8,894	$	73,059	$	36,687	$	(589)	$	174,910
Cost of Sales (excluding depreciation
and amortization)		35,849		8,006		63,566		24,635		(589)		131,467
Gross Profit		21,010		888		9,493		12,052		-		43,443
Operating expenses:
General and administrative		9,000		1,507		8,287		7,455		14,745		40,994
Selling, marketing and service		3,099		335		1,159		1,787		231		6,611
Depreciation and amortization		2,345		72		2,612		985		482		6,496
Restructuring charges		-		-		-		427		-		427
Total operating expenses		14,444		1,914		12,058		10,654		15,458		54,528
Operating income (loss)		6,566		(1,026)		(2,565)		1,398		(15,458)		(11,085)
Other income and (expenses):
Interest and other income		-		-		-		-		14		14
Interest expense		-		-		-		-		(921)		(921)
Income (loss) before income taxes	$	6,566	$	(1,026)	$	(2,565)	$	1,398	$	(16,365)	$	(11,992)