NOTE 4: SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 4:                      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, 2015 and 2014:

	Training and Simulation Division			Power Systems Division			Corporate			Total Company
Six months ended June 30, 2015
Revenues from outside customers	$	26,322,683			19,548,250			–			45,870,933
Depreciation and amortization expense(1)		(415,021	)		(2,055,058	)		(12,406	)		(2,482,485	)
Direct expenses(2)		(22,028,902	)		(20,746,239	)		(2,158,225	)		(44,933,366	)
Segment net income (loss)	$	3,878,760			(3,253,047	)		(2,170,631	)		(1,544,918	)
Financial income (expense)		(24,841	)		14,194			(560,358	)		(571,005	)
Income tax expense		(178,476	)		–			(431,248	)		(609,724	)
Net income (loss)	$	3,675,443			(3,238,853	)		(3,162,237	)		(2,725,647	)
Segment assets(3)	$	58,443,856			60,477,131			518,594			119,439,581
Additions to long-lived assets	$	398,114			701,728			4,502			1,104,344
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 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
Three months ended June 30, 2015
Revenues from outside customers	$	12,884,562			8,759,665			–			21,644,227
Depreciation and amortization expense(1)		(207,845	)		(928,470	)		(5,937	)		(1,142,252	)
Direct expenses(2)		(10,297,258	)		(10,187,624	)		(1,646,321	)		(22,131,202	)
Segment net income (loss)	$	2,379,459			(2,356,429	)		(1,652,258	)		(1,629,229	)
Financial income (expense)		(13,226	)		38,824			(268,995	)		(243,397	)
Income tax expense		(151,220	)		–			(219,124	)		(370,344	)
Net income (loss)	$	2,215,013			(2,317,606	)		(2,140,377	)		(2,242,970	)
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

(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 Power Systems Divisions totaled $24,435,641 and $21,173,818, respectively, as of June 30, 2015 and $24,435,641 and $21,758,040, respectively, as of June 30, 2014.