Note 8 - Segments and Geographic Information

9 Months Ended

Sep. 30, 2012

Segment Reporting Disclosure [Text Block]

NOTE 8.  SEGMENTS AND GEOGRAPHIC INFORMATION

The Company has two reportable segments: product-based sales, featuring military, general commercial and industrial lighting, and pool 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 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 the Company’s direct sales employees as well as our SRC subsidiary, and include not only its 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 September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Solutions:
Net sales	$	2,066		$	2,014		$	5,811		$	7,960
Cost of sales		1,672			1,686			4,912			6,686
Gross profit		394			328			899			1,274
Operating expenses:
Sales and marketing		320			311			1,004			1,032
General and administrative		244			231			558			706
Total operating expenses		564			542			1,562			1,738
Segment loss	$	(170	)	$	(214	)	$	(663	)	$	(464	)
Products:
Net sales	$	5,838		$	4,032		$	15,067		$	11,739
Cost of sales		4,273			3,145			11,518			9,091
Gross profit		1,565			887			3,549			2,648
Operating expenses (income):
Research and development		102			(278	)		87			(144	)
Sales and marketing		957			1,140			2,708			3,872
General and administrative		119			85			261			257
Total operating expenses		1,178			947			3,056			3,985
Segment income (loss)	$	387		$	(60	)	$	493		$	(1,337	)
Reconciliation of segment income (loss) to net loss:
Segment income (loss):
Solutions	$	(170	)	$	(214	)	$	(663	)	$	(464	)
Products		387			(60	)		493			(1,337	)
Total segment income (loss)		217			(274	)		(170	)		(1,801	)
Operating expenses:
Sales and marketing		146			73			372			191
General and administrative		848			896			2,660			2,871
Valuation of equity instruments		-			-			-			56
Total operating expenses		994			969			3,032			3,118
Other expense		(149	)		(212	)		(485	)		(513	)
Loss before income taxes		(926	)		(1,455	)		(3,687	)		(5,432	)
Provision for income taxes		(2	)		(4	)		(8	)		(13	)
Net loss	$	(928	)	$	(1,459	)	$	(3,695	)	$	(5,445	)

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

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Products segment net sales:
Pool and commercial products	$	4,159	$	3,127		$	11,354	$	9,149
Government products/R&D services		1,679		905			3,713		2,590
Total products segment net sales		5,838		4,032			15,067		11,739
Products segment cost of sales:
Pool and commercial products		2,892		2,229			8,077		6,593
Government products/R&D services		1,381		916			3,441		2,498
Total products segment cost of sales		4,273		3,145			11,518		9,091
Products segment gross profit (loss):
Pool and commercial products		1,267		898			3,277		2,556
Government products/R&D services		298		(11	)		272		92
Total products segment gross profit	$	1,565	$	887		$	3,549	$	2,648

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

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
United States	$	6,976	$	4,966	$	18,700	$	16,479
International		928		1,080		2,178		3,220
Net sales	$	7,904	$	6,046	$	20,878	$	19,699

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

	September 30, 2012		December 31, 2011
United States	$	3,123	$	3,747
International		49		57
Long-lived assets, net	$	3,172	$	3,804