SEGMENT REPORTING

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

As of December 31, 2023, 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, accordingly, the periods presented below include Benchmark's operations from November 13, 2023 through December 31, 2023. As of and for the year ended December 31, 2022, the consolidated results represented the results of the Company's two reporting segments: Intellectual Property Operations and Industrial Operations.

The Company's segment information, including Benchmark's operations from November 13, 2023 through December 31, 2023, is as follows:

	Year Ended December 31, 2023
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Revenues:
License fees	$	89,156	$	—	$	—	$	89,156
Printers and parts	—		12,513		—		12,513
Consumable products	—		19,091		—		19,091
Services	—		3,494		—		3,494
Oil sales	—		—		256		256
Natural gas sales	—		—		372		372
Natural gas liquids sales	—		—		220		220
Total revenues	89,156		35,098		848		125,102
Cost of revenues:
Inventor royalties	1,025		—		—		1,025
Contingent legal fees	10,998		—		—		10,998
Litigation and licensing expenses	10,771		—		—		10,771
Amortization of patents	11,370		—		—		11,370
Cost of sales	—		18,009		—		18,009
Cost of production	—		—		656		656
Total cost of revenues	34,164		18,009		656		52,829
Segment gross profit	54,992		17,089		192		72,273
Other operating expenses:
Engineering and development expenses	—		735		—		735
Sales and marketing expenses	—		6,908		—		6,908
Amortization of intangible assets	—		1,732		—		1,732
General and administrative expenses	7,402		6,990		264		14,656
Total other operating expenses	7,402		16,365		264		24,031
Segment operating income (loss)	$	47,590	$	724	$	(72)	48,242
Parent general and administrative expenses							27,306
Operating income							20,936
Total other income							46,490
Income before income taxes							$	67,426

The Company's two reportable segment information for the year ended December 31, 2022 is as follows:

	Year Ended December 31, 2022
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues:
License fees	$	19,508	$	—	$	19,508
Printers and parts	—		16,118		16,118
Consumable products	—		19,314		19,314
Services	—		4,283		4,283
Total revenues	19,508		39,715		59,223
Cost of revenues:
Inventor royalties	1,212		—		1,212
Contingent legal fees	2,444		—		2,444
Litigation and licensing expenses	3,970		—		3,970
Amortization of patents	10,403		—		10,403
Cost of sales	—		19,359		19,359
Total cost of revenues	18,029		19,359		37,388
Segment gross profit	1,479		20,356		21,835
Other operating expenses:
Engineering and development expenses	—		626		626
Sales and marketing expenses	—		8,621		8,621
Amortization of intangible assets	—		1,732		1,732
General and administrative expenses	5,428		8,254		13,682
Total other operating expenses	5,428		19,233		24,661
Segment operating (loss) income	$	(3,949)	$	1,123	(2,826)
Parent general and administrative expenses					37,266
Operating income loss					(40,092)
Total other expense					(87,058)
Loss before income taxes					$	(127,150)

The Company's reportable segment information as of December 31, 2023 and 2022 is as follows:

	December 31, 2023		December 31, 2022
	(In thousands)
Equity securities investments:
Equity securities	$	63,068	$	61,608
Equity securities without readily determinable fair value	5,816		5,816
Equity method investments	30,934		30,934
Total parent equity securities investments	99,818		98,358
Other parent assets	218,909		156,394
Segment total assets:
Intellectual property operations	234,254		176,119
Industrial operations	47,854		52,057
Energy operations	$	32,710	$	—
Total assets	$	633,545	$	482,928

The Company's revenues, including Benchmark's sales from November 13, 2023 through December 31, 2023, 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.

	Year Ended December 31, 2023
	Intellectual Property Operations		Industrial Operations		Energy Operations		Total
	(In thousands)
Revenues by geographic area:
United States	$	80,407	$	14,128	$	848	$	95,383
Canada and Latin America	514		1,100		—		1,614
Total Americas	80,921		15,228		848		96,997
Europe, Middle East and Africa	—		8,935		—		8,935
China	8,200		3,512		—		11,712
India	—		2,849		—		2,849
Asia-Pacific, excluding China and India	35		4,574		—		4,609
Total Asia-Pacific	8,235		10,935		—		19,170
Total revenues	$	89,156	$	35,098	$	848	$	125,102

	Year Ended December 31, 2022
	Intellectual Property Operations		Industrial Operations		Total
	(In thousands)
Revenues by geographic area:
United States	$	18,882	$	15,541	$	34,423
Canada and Latin America	11		2,145		2,156
Total Americas	18,893		17,686		36,579
Europe, Middle East and Africa	589		9,298		9,887
China	—		5,207		5,207
India	—		2,957		2,957
Asia-Pacific, excluding China and India	26		4,567		4,593
Total Asia-Pacific	26		12,731		12,757
Total revenues	$	19,508	$	39,715	$	59,223

	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

	December 31, 2022
	Intellectual Property Operations		Industrial Operations		Total
	(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