Segments and Geographic Information

6 Months Ended

Jun. 30, 2011

Segments and Geographic Information [Abstract]

SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 9. SEGMENTS AND GEOGRAPHIC INFORMATION

The Company has two reportable segments: product-based sales featuring pool lighting and general commercial lighting, each of which markets and sells lighting systems, and solutions-based sales providing turnkey, high-quality, energy-efficient lighting application alternatives. The Company’s products are sold through a combination of direct sales employees, independent sales representatives, and various distributors in different geographic markets throughout the world. The Company’s solutions-based sales are designed to enhance total value by positively impacting customers’ profitability, the environment, and the communities it serves. These solutions are sold through our direct sales employees as well as our SRC subsidiary, and include not only the Company’s proprietary energy-efficient lighting solutions, but also sourced lighting systems, energy audits, and service agreements.

The following summarizes the Company’s reportable segment data for periods indicated (in thousands):

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Solutions:
Net sales	$	3,344		$	4,935		$	5,946		$	10,215
Cost of goods sold		2,947			4,051			5,000			8,338
Gross profit		397			884			946			1,877
Operating expenses:
Sales and marketing		372			354			721			623
General and administrative		238			345			475			683
Total operating expenses		610			699			1,196			1,306
Segment (loss) income	$	(213	)	$	185		$	(250	)	$	571
Products:
Net sales	$	4,849		$	4,023		$	7,707		$	7,100
Cost of goods sold		3,698			3,339			5,946			6,014
Gross profit		1,151			684			1,761			1,086
Operating expenses:
Research and development		(131	)		(134	)		134			(79	)
Sales and marketing		1,213			1,115			2,732			2,410
General and administrative		66			35			172			104
Restructuring expense		—			—			—			26
Total operating expenses		1,148			1,016			3,038			2,461
Segment income (loss)	$	3		$	(332	)	$	(1,277	)	$	(1,375	)
Reconciliation of segment income (loss) to net loss:
Segment income (loss):
Solutions	$	(213	)	$	185		$	(250	)	$	571
Products		3			(332	)		(1,277	)		(1,375	)
Total segment loss		(210	)		(147	)		(1,527	)		(804	)
Operating expenses:
Sales and marketing		51			49			118			104
General and administrative		740			1,136			1,975			2,408
Revaluation of equity instruments		—			329			56			1,750
Total operating expenses		791			1,514			2,149			4,262
Other (expense) income		(168	)		(149	)		(301	)		(313	)
Loss before income taxes		(1,169	)		(1,810	)		(3,977	)		(5,379	)
Provision for income taxes		(4	)		(2	)		(9	)		(3	)
Net loss	$	(1,173	)	$	(1,812	)	$	(3,986	)	$	(5,382	)

The following table provides additional business unit gross profitability detail for the Company’s products-based business segment for the periods indicated (in thousands):

	Three months ended					Six months ended
	June 30,					June 30,
	2011		2010			2011		2010
Products segment net sales:
Pool and commercial products	$	3,674	$	3,228		$	6,022	$	5,734
Government products/R&D services		1,175		795			1,685		1,366
Total products segment net sales		4,849		4,023			7,707		7,100
Products segment cost of sales:
Pool and commercial products		2,564		2,161			4,364		3,698
Government products/R&D services		1,134		790			1,582		1,361
Unallocated manufacturing overhead		—		388			—		955
Total products segment cost of sales		3,698		3,339			5,946		6,014
Products segment gross profit:
Pool and commercial products		1,110		1,067			1,658		2,036
Government products/R&D services		41		5			103		5
Unallocated manufacturing overhead		—		(388	)		—		(955	)
Total products segment gross profit	$	1,151	$	684		$	1,761	$	1,086

Unallocated manufacturing overhead is defined as follows:

1)	costs associated with the operation and shut down of the Solon manufacturing facility which has been relocated to the Mexico facility and
2)	specific expenses which are not attributable to a specific business unit but rather are calculated on the total products business segment. Expenses include Solon manufacturing facility rent, Solon manufacturing depreciation, inventory reserves and accruals and Solon manufacturing support payroll and severance.

A geographic summary of net sales is as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
United States	$	6,960	$	8,263	$	11,513	$	15,547
International		1,233		695		2,140		1,768
Net sales	$	8,193	$	8,958	$	13,653	$	17,315

A geographic summary of long-lived assets, which consists of fixed assets, goodwill, and intangible assets, is as follows (in thousands):

	June 30,		December 31,
	2011		2010
United States	$	4,254	$	4,676
International		88		119
Long-lived assets, net	$	4,342	$	4,795