XML 40 R24.htm IDEA: XBRL DOCUMENT v3.22.4
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
As of December 31, 2022, the Company operates and reports its results in two reportable segments: Intellectual Property Operations and Industrial Operations. Historically, the Company has managed and reported under a single reporting segment. In October 2021, the Company acquired Printronix, which comprises all of the operations of the Company’s Industrial Operations reportable segment and led to the identification of the additional reporting segment.
The Company reports segment information based on the management approach and organizes its businesses based on products and services. The management approach designates the internal reporting used by the chief operating decision maker for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measure of the Company’s reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. Other than the Company's equity securities investments, specific asset information is not included in managements review at this time.
The Company’s Intellectual Property Operations segment invests in IP and related absolute return assets, and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business we are a principal in the licensing and enforcement of patent portfolios, with our operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. While we, from time to time, partner with inventors and patent owners, from small entities to large corporations, we assume all responsibility for advancing operational expenses while pursuing a patent licensing and enforcement program. When applicable, we share net licensing revenue with our patent partners as that program matures, on a prearranged and negotiated basis. We may also provide upfront capital to patent owners as an advance against future licensing revenue. Currently, on a consolidated basis, our operating subsidiaries own or control the rights to multiple patent portfolios, which include U.S. patents and certain foreign counterparts, covering technologies used in a variety of industries. We generate revenues and related cash flows from the granting of IP rights for the use of patented technologies that our operating subsidiaries control or own.
The Company’s Industrial Operations segment generates operating income by designing and manufacturing printers and consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements. Consumable products include inked ribbons which are used in Printronix’s printers. Printronix’s products are primarily sold through channel partners, such as dealers and distributors, to end-users. The Industrial Operations reporting segment did not exist prior to the acquisition of Printronix in October 2021, accordingly, the periods presented below include Printronix's operations for the full year ended December 31, 2022 compared to an approximate three month period ended December 31, 2021.
The Company's segment information is as follows:
Years Ended December 31,
20222021
Intellectual Property OperationsIndustrial OperationsTotalIntellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Revenues:
License fees$19,508 $— $19,508 $76,043 $— $76,043 
Printers and parts— 16,118 16,118 — 4,961 4,961 
Consumable products— 19,314 19,314 — 5,973 5,973 
Services— 4,283 4,283 — 1,070 1,070 
Total revenues19,508 39,715 59,223 76,043 12,004 88,047 
Cost of revenues:
Inventor royalties1,212 — 1,212 1,142 — 1,142 
Contingent legal fees2,444 — 2,444 12,074 — 12,074 
Litigation and licensing expenses3,970 — 3,970 5,462 — 5,462 
Amortization of patents10,403 — 10,403 9,851 — 9,851 
Other patent portfolio expense— — — 162 — 162 
Cost of sales— 19,359 19,359 — 7,407 7,407 
Total cost of revenues18,029 19,359 37,388 28,691 7,407 36,098 
Segment gross profit1,479 20,356 21,835 47,352 4,597 51,949 
Other operating expenses:
Engineering and development expenses— 626 626 — 200 200 
Sales and marketing expenses— 8,621 8,621 — 1,538 1,538 
Amortization of intangible assets— 1,732 1,732 — 399 399 
General and administrative expenses5,428 8,254 13,682 6,177 2,398 8,575 
Total other operating expenses5,428 19,233 24,661 6,177 4,535 10,712 
Segment operating (loss) income$(3,949)$1,123 (2,826)$41,175 $62 41,237 
Parent general and administrative expenses37,266 26,692 
Operating (loss) income(40,092)14,545 
Total other (expense) income(87,058)160,107 
(Loss) income before income taxes$(127,150)$174,652 
December 31,
20222021
(In thousands)
Equity securities investments:
Equity securities$61,608 $361,778 
Equity securities without readily determinable fair value5,816 5,816 
Equity method investments30,934 30,934 
Total parent equity securities investments98,358 398,528 
Other parent assets156,394 172,726 
Segment total assets:
Intellectual property operations176,119 175,286 
Industrial operations52,057 52,316 
Total assets$482,928 $798,856 
The Company's revenues and long-lived tangible assets by geographic area are presented below. Intellectual Property Operations revenues are attributed to licensees domiciled in foreign jurisdictions. Printronix's net sales to external customers are attributed to geographic areas based upon the final destination of products shipped. The Company, primarily through its Printronix subsidiary, has identified three global regions for marketing its products and services: Americas, Europe, Middle East and Africa, and Asia-Pacific. Assets are summarized based on the location of held assets.
Years Ended December 31,
20222021
Intellectual Property OperationsIndustrial OperationsTotalIntellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Revenues by geographic area:
United States$18,882 $15,541 $34,423 $23,256 $4,937 $28,193 
Canada and Latin America11 2,145 2,156 402 251 653 
Total Americas18,893 17,686 36,579 23,658 5,188 28,846 
Europe, Middle East and Africa589 9,298 9,887 1,841 2,589 4,430 
China— 5,207 5,207 — 1,910 1,910 
India— 2,957 2,957 — 1,076 1,076 
Asia-Pacific, excluding China and India26 4,567 4,593 50,544 1,241 51,785 
Total Asia-Pacific26 12,731 12,757 50,544 4,227 54,771 
Total revenues$19,508 $39,715 $59,223 $76,043 $12,004 $88,047 
December 31, 2022
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Long-lived tangible assets by geographic area:
United States$324 $302 $626 
Malaysia— 2,703 2,703 
Other foreign countries— 208 208 
Total$324 $3,213 $3,537 
December 31, 2021
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Long-lived tangible assets by geographic area:
United States$204 $473 $677 
Malaysia— 3,203 3,203 
Other foreign countries— 303 303 
Total$204 $3,979 $4,183