Note 12 - Segments and Geographic Information

12 Months Ended

Dec. 31, 2012

Segment Reporting Disclosure [Text Block]

12.    Segments and Geographic Information

The Company has two reportable segments: products segment featuring pool lighting, general commercial lighting alternatives, government products, and research and development services, each of which markets and sells lighting systems; and solutions segment 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 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):

	Years ended December 31,
	2012			2011			2010
Solutions:
Net sales	$	10,569		$	9,563		$	19,763
Cost of sales		9,150			8,041			16,332
Gross profit		1,419			1,522			3,431
Operating expenses:
Sales and marketing		1,312			1,332			1,407
General and administrative		769			939			1,377
Loss on impairment		672			-			-
Total operating expenses		2,753			2,271			2,784
Segment (loss) income	$	(1,334	)	$	(749	)	$	647
Products:
Net sales	$	19,268		$	16,189		$	15,366
Cost of sales		14,450			12,540			12,394
Gross profit		4,818			3,649			2,972
Operating expenses (income):
Research and development		368			(515	)		(202	)
Sales and marketing		3,641			4,629			4,796
General and administrative		261			318			293
Loss on impairment		-			-			156
Restructuring		-			-			26
Total operating expenses		4,270			4,432			5,069
Segment income (loss)	$	548		$	(783	)	$	(2,097	)
Reconciliation of segment (loss) income to net loss:
Segment (loss) income:
Solutions	$	(1,334	)	$	(749	)	$	647
Products		548			(783	)		(2,097	)
Total segment loss		(786	)		(1,532	)		(1,450	)
Operating expenses:
Sales and marketing		743			239			212
General and administrative		3,616			3,805			4,445
Valuation of equity instruments		-			56			1,812
Change in estimate of contingent liabilities		(102	)		(411	)		-
Total operating expenses		4,257			3,689			6,469
Other expense		(666	)		(836	)		(592	)
Loss before income taxes		(5,709	)		(6,057	)		(8,511	)
Benefit from (Provision for) income taxes		-			2			(6	)
Net loss	$	(5,709	)	$	(6,055	)	$	(8,517	)

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

	Years ended December 31,
	2012		2011		2010
Products segment net sales:
Pool and commercial products	$	14,948	$	11,911	$	12,265
Government products/R&D services		4,320		4,278		3,101
Total products segment net sales		19,268		16,189		15,366
Products segment cost of sales:
Pool and commercial products		10,367		8,560		7,988
Government products/R&D services		4,083		3,980		3,104
Unallocated manufacturing overhead 1		-		-		1,302
Total products segment cost of sales		14,450		12,540		12,394
Products segment gross profit:
Pool and commercial products		4,581		3,351		4,277
Government products/R&D services		237		298		(3	)
Unallocated manufacturing overhead 1		-		-		(1,302	)
Total products segment gross profit	$	4,818	$	3,649	$	2,972

1. Unallocated manufacturing overhead is defined as costs associated with the operation and shut down of the Solon manufacturing facility which was relocated to the Mexico facility; and specific expenses which are not attributable to a specific business unit but rather are calculated on the total products business segment.

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

	Years ended December 31,
	2012		2011		2010
United States Domestic	$	26,798	$	21,730	$	31,314
International		3,039		4,022		3,815
Net sales	$	29,837	$	25,752	$	35,129

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

	December 31,
	2012		2011
United States	$	2,350	$	3,747
International		58		57
Long-lived assets, net	$	2,408	$	3,804