NOTE 6: SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 6:                      SEGMENT INFORMATION

a.           The Company and its subsidiaries operate primarily in two continuing business segments and follow the requirements of FASB ASC 280-10. Additionally, the two segments are also treated by the Company as reporting units for goodwill impairment testing purposes under FASB ASC 350-20-35. The goodwill amounts associated with each of these reporting units was determined and valued when the specific businesses in the reportable segment were purchased.

The Company’s reportable operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The accounting policies of the operating segments are the same as those used by the Company in the preparation of its annual financial statements. The Company evaluates performance based upon two primary factors, one is the segment’s operating income and the other is the segment’s contribution to the Company’s future strategic growth.

b.           The following is information about reported segment revenues, income (losses) and total assets for the six and three months ended June 30, 2014 and 2013:

	Training and Simulation Division			Battery and Power Systems Division			Corporate Expenses			Discontinued			Total Company
Six months ended June 30, 2014
Revenues from outside customers	$	28,877,453		$	21,334,533		$	–		$	–		$	50,211,986
Depreciation and amortization expense(1)		(367,015	)		(1,278,072	)		(10,438	)		–			(1,655,525	)
Direct expenses(2)		(22,739,239	)		(17,736,091	)		(4,223,145	)		–			(44,698,475	)
Segment net income (loss)	$	5,771,199		$	2,320,370		$	(4,233,583	)	$	–		$	3,857,986
Financial income (expense)		(17,445	)		(12,932	)		(652,271	)		–			(682,648	)
Income tax expense		(65,511	)		(13,800	)		(299,250	)		–			(378,561	)
Net income (loss)	$	5,688,243		$	2,293,638		$	(5,185,104	)	$	–		$	2,796,777
Segment assets(3)	$	48,016,363		$	69,050,430		$	419,530		$	–		$	117,486,323
Additions to long-lived assets	$	518,571		$	29,664,064		$	2,956		$	–		$	30,185,591
Six months ended June 30, 2013
Revenues from outside customers	$	30,474,108		$	13,975,865		$	–		$	–		$	44,449,973
Depreciation and amortization expense(1)		(485,079	)		(633,918	)		(14,020	)		–			(1,133,017	)
Direct expenses(2)		(25,574,613	)		(12,698,023	)		(2,343,425	)		–			(40,616,061	)
Segment net income (loss)	$	4,414,416		$	643,924		$	(2,357,445	)	$	–		$	2,700,895
Financial expense		(17,585	)		(34,978	)		(250,316	)		–			(302,879	)
Income tax expense		(55,652	)		(74,000	)		(299,250	)		–			(428,902	)
Net income (loss) continuing operations	$	4,341,179		$	534,946		$	(2,907,011	)	$	–		$	1,969,114
Net loss discontinued operations		–			–			–			(87,930	)		(87,930	)
Net income (loss)	$	4,341,179		$	534,946		$	(2,907,011	)	$	(87,930	)	$	1,881,184
Segment assets(3)	$	54,349,090		$	28,270,758		$	130,158		$	77,761		$	82,827,767
Additions to long-lived assets	$	114,661		$	1,160,728		$	–		$	–		$	1,275,389

	Training and Simulation Division			Battery and Power Systems Division				Corporate Expenses		Discontinued			Total Company
Three months ended June 30, 2014
Revenues from outside customers	$	13,195,615		$	14,633,571		$	–		$	–		$	27,829,186
Depreciation and amortization expense(1)		(187,773	)		(1,085,878	)		(4,001	)		–			(1,277,652	)
Direct expenses(2)		(10,055,402	)		(11,900,786	)		(2,068,889	)		–			(24,025,077	)
Segment net income (loss)	$	2,952,440		$	1,646,907		$	(2,072,890	)	$	–		$	2,526,457
Financial income (expense)		(10,033	)		48,787			(602,401	)		–			(563,647	)
Income tax expense		(30,500	)		–			(149,625	)		–			(180,125	)
Net income (loss)	$	2,911,907		$	1,695,694		$	(2,824,916	)	$	–		$	1,782,685
Three months ended June 30, 2013
Revenues from outside customers	$	14,794,917		$	7,601,925		$	–		$	–		$	22,396,842
Depreciation and amortization expense(1)		(241,084	)		(314,176	)		(6,501	)		–			(561,761	)
Direct expenses(2)		(12,148,150	)		(6,600,975	)		(1,227,762	)		–			(19,976,887	)
Segment net income (loss)	$	2,405,683		$	686,774		$	(1,234,263	)	$	–		$	1,858,194
Financial income (expense)		(10,646	)		26,463			(129,559	)		–			(113,742	)
Income tax expense		(30,500	)		(74,000	)		(149,625	)		–			(254,125	)
Net income (loss) continuing operations	$	2,364,537		$	639,237		$	(1,513,447	)	$	–		$	1,490,327
Net loss discontinued operations		–			–			–			(13,187	)		(13,187	)
Net income (loss)	$	2,364,537		$	639,237		$	(1,513,447	)	$	(13,187	)	$	1,477,140

(1) Includes depreciation of property and equipment and amortization expenses of intangible assets.

(2) Including, inter alia, sales and marketing, general and administrative.

(3) Out of those amounts, goodwill in the Company’s Training and Simulation and Battery and Power Systems Divisions totaled $24,435,641 and $21,758,040, respectively, as of June 30, 2014 and $24,435,641 and $6,321,396, respectively, as of June 30, 2013.