Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.7.0.1
Segment Reporting
6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
Segment Reporting

Note 8 – Segment Reporting

 

As a result of the beginning of new geographical revenue activity in the United States in the second quarter of 2017, we are reporting the results of each of our two reportable segments beginning with the second quarter of 2017 in accordance with ASC 280, Segment Reporting. Each of the operating segments is separately managed by a senior executive who reports to our Chief Executive Officer, who is the chief operating decision maker. Discrete financial information is available for each of the segments, and the operating results of each of the operating segments are used for performance evaluation and resource allocation.

 

We manage two operating segments aligned with our geographic operating locations of Latin America and the United States. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects corporate personnel and activities, research and development activities, incentive compensation programs and other costs.

 

We account for intersegment sales at prices that we generally establish by reference to similar transactions with unaffiliated customers. Reporting segments are measured based on gross margin, which is defined as revenues reduced by total cost of services. Cost of services exclude research and development expenses and depreciation and amortization expense.

 

Summarized financial information is shown in the following tables:

 

    Three Months Ended June 30,     Six Months Ended June 30,  
    2017     2016     2017     2016  
                         
Revenues(1):                                
Latin America   $ 5,434,937     $ 2,337,579     $ 7,997,594     $ 4,171,484  
United States     3,092,722             3,092,722        
Total revenues   $ 8,527,659     $ 2,337,579     $ 11,090,316     $ 4,171,484  
                                 
Gross margin(1,2):                                
Latin America   $ (1,363,853 )   $ (132,459 )   $ (2,173,188 )   $ (534,681 )
United States     (1,630,733 )           (2,113,627 )      
Total gross margin   $ (2,994,586 )   $ (132,459 )   $ (4,286,815 )   $ (534,681 )
                                 
Capital expenditures:                                
Latin America   $ 116,977     $ 1,544,229     $ 150,270     $ 2,706,050  
United States     4,073,083             7,692,269        
Corporate and Other                        
Total capital expenditures   $ 4,190,060     $ 1,544,229     $ 7,842,535     $ 2,706,050  
                                 
Depreciation and amortization:                                
Latin America   $ 1,308,725     $ 1,155,241     $ 2,608,869     $ 2,003,866  
United States     75,669             75,669        
Corporate and Other     38,325       56,719       79,973       112,324  
Total depreciation and amortization   $ 1,422,719     $ 1,211,960     $ 2,764,511     $ 2,116,190  

 

(1) U.S. activity began in February 2017 with start-up expenses being incurred. The Company began recognizing revenue in late May 2017. Intersegment transactions included in revenues were not significant for any of the periods presented.
   
(2) Gross margin is defined as revenues less costs of services. Cost of services excludes selling, general and administrative expenses, research and development expenses and depreciation and amortization expense.