SEGMENT REPORTING

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

As of March 31, 2024, the Company operates and reports its results in three reportable segments: Intellectual Property Operations, Industrial Operations and Energy Operations.

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 Company's Energy Operations segment generates operating income from its wells and engages in the acquisition, exploration, development, and production of oil and natural gas resources located in Roberts and Hemphill Counties in Texas. Benchmark seeks to acquire predictable and shallow decline, cash flowing oil and gas properties whose value can be enhanced via a disciplined, field optimization strategy, with risk managed through robust commodity hedges and low leverage. The Energy Operations reporting segment did not exist prior to the acquisition of Benchmark in November 2023. As of and for the three months ended March 31, 2023, the consolidated results represented the results of the Company's two reporting segments: Intellectual Property Operations and Industrial Operations.

The Company's segment information is as follows:

	Three Months Ended March 31, 2024
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Revenues:
License fees	$	13,623	$	—	$	—	$	13,623
Printers and parts	—		3,065		—		3,065
Consumable products	—		5,013		—		5,013
Services	—		763		—		763
Oil sales	—		—		661		661
Natural gas sales	—		—		730		730
Natural gas liquids sales	—		—		465		465
Total revenues	13,623		8,841		1,856		24,320
Cost of revenues:
Inventor royalties	606		—		—		606
Contingent legal fees	1,824		—		—		1,824
Litigation and licensing expenses	1,138		—		—		1,138
Amortization of patents	3,433		—		—		3,433
Cost of sales	—		4,049		—		4,049
Cost of production	—		—		1,315		1,315
Total cost of revenues	7,001		4,049		1,315		12,365
Segment gross profit	6,622		4,792		541		11,955
Other operating expenses:
Engineering and development expenses	—		134		—		134
Sales and marketing expenses	—		1,555		—		1,555
Amortization of intangible assets	—		433		—		433
General and administrative expenses	3,340		1,458		385		5,183
Total other operating expenses	3,340		3,580		385		7,305
Segment operating income	$	3,282	$	1,212	$	156	4,650
Parent general and administrative expenses							6,737
Operating loss							(2,087)
Total other income							789
Loss before income taxes							$	(1,298)

	Three Months Ended March 31, 2023
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues:
License fees	$	4,176	$	—	$	4,176
Printers and parts	—		4,464		4,464
Consumable products	—		5,170		5,170
Services	—		993		993
Total revenues	4,176		10,627		14,803
Cost of revenues:
Inventor royalties	221		—		221
Contingent legal fees	532		—		532
Litigation and licensing expenses	1,384		—		1,384
Amortization of patents	2,601		—		2,601
Cost of sales	—		5,220		5,220
Total cost of revenues	4,738		5,220		9,958
Segment gross profit	(562)		5,407		4,845
Other operating expenses:
Engineering and development expenses	—		216		216
Sales and marketing expenses	—		1,913		1,913
Amortization of intangible assets	—		433		433
General and administrative expenses	1,897		2,285		4,182
Total other operating expenses	1,897		4,847		6,744
Segment operating (loss) income	$	(2,459)	$	560	(1,899)
Parent general and administrative expenses					7,425
Operating income loss					(9,324)
Total other income					21,254
Income before income taxes					$	11,930

	March 31, 2024		December 31, 2023
	(In thousands)
Equity securities investments:
Equity securities	$	22,918	$	63,068
Equity securities without readily determinable fair value	5,816		5,816
Equity method investments	30,934		30,934
Total parent equity securities investments	59,668		99,818
Other parent assets	261,185		218,909
Segment total assets:
Intellectual property operations	227,050		234,254
Industrial operations	48,863		47,854
Energy operations	34,959		32,710
Total assets	$	631,725	$	633,545

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. Benchmark's sales are only attributed to the United States of America.

	Three Months Ended March 31, 2024
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Revenues by geographic area:
United States	$	2,064	$	3,159	$	1,856	$	7,079
Canada and Latin America	1		266		—		267
Total Americas	2,065		3,425		1,856		7,346
Europe, Middle East and Africa	—		2,478		—		2,478
China	4,650		518		—		5,168
India	—		918		—		918
Asia-Pacific, excluding China and India	6,908		1,502		—		8,410
Total Asia-Pacific	11,558		2,938		—		14,496
Total revenues	$	13,623	$	8,841	$	1,856	$	24,320

	Three Months Ended March 31, 2023
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues by geographic area:
United States	$	673	$	4,234	$	4,907
Canada and Latin America	501		219		720
Total Americas	1,174		4,453		5,627
Europe, Middle East and Africa	—		2,965		2,965
China	3,000		843		3,843
India	—		828		828
Asia-Pacific, excluding China and India	2		1,538		1,540
Total Asia-Pacific	3,002		3,209		6,211
Total revenues	$	4,176	$	10,627	$	14,803

	March 31, 2024
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Long-lived tangible assets by geographic area:
United States	$	191	$	50	$	24,952	$	25,193
Malaysia	—		1,760		—		1,760
Other foreign countries	—		89		—		89
Total	$	191	$	1,899	$	24,952	$	27,042

	December 31, 2023
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Long-lived tangible assets by geographic area:
United States	$	201	$	92	$	25,117	$	25,410
Malaysia	—		1,949		—		1,949
Other foreign countries	—		114		—		114
Total	$	201	$	2,155	$	25,117	$	27,473