v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
Segment Reporting  
Segment Reporting

Note 12 - Segment Reporting

 

Segment information reported in the tables below represents the operating segments of the Company organized in a manner consistent with which separate information is available and for which segment results are evaluated regularly by our President and CEO, who is our chief operating decision-maker (CODM), in assessing performance, allocating resources and awarding incentive compensation. Our CODM evaluates our operations and allocates resources on the basis of three segments, which are our reportable segments as noted below. Our revenues are substantially all derived from the U.S. market, and all revenues presented are from external customers; we have no intercompany revenues.

 

The Company’s reportable segments are as follows:

 

 

·

Procurement: Assists our customers in procuring third-party hardware, software, and professional services on their behalf that are used in our integration services as we integrate these components to deliver a completed system to our customers. Although this activity drives some of the work done in the systems integration business, its activities and financial results are reviewed separately from the systems integration segment results.

 

·

Systems Integration: Integrates IT equipment for OEM vendors and customers to be used inside data center environments, including MDCs. This includes AI-enabled computer technology as well as more traditional data center equipment. This segment also provides other computer equipment configuration services for our customers, as well as warehousing and logistics services to our largest customer.

 

·

Facilities Management: Involved in the design, project management and maintenance of data centers and mission-critical business operations.

 

The CODM evaluates the performance of the segments based on segment revenue and operating lease income, gross profit and pre-tax income, by comparing actual results to historic results and previously forecast financial information. Segment results are exclusive of certain corporate activities and expenses that are not allocated to specific segments, and which are reconciled below to our consolidated pre-tax income.

Other consolidated assets not specifically attributable to or allocated to business segments are principally cash and cash equivalents, prepaids and deposits, certain fixed assets, and operating lease right-of use assets. Other operating expenses (income) in the following tables generally represent property taxes, rent and related costs, travel and entertainment, professional fees, office supplies and other similar items utilized by the specific reportable segments but not separately identified in the tables below as none of the costs are individually significant.

 

Information regarding our reportable segments is presented below (unaudited, in thousands):

 

 

 

Procurement

 

 

Systems

Integration

 

 

Facilities

Management

 

 

Total Segments

 

Three Months Ended June 30, 2026:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$18,249

 

 

$14,169

 

 

$2,723

 

 

$35,141

 

Cost of revenues

 

 

16,233

 

 

 

8,506

 

 

 

1,169

 

 

 

25,908

 

Cost of revenues – depreciation

 

 

-

 

 

 

989

 

 

 

-

 

 

 

989

 

Cost of lease operations

 

 

-

 

 

 

235

 

 

 

-

 

 

 

235

 

Total cost of revenues

 

 

16,233

 

 

 

9,730

 

 

 

1,169

 

 

 

27,132

 

Segment gross profit

 

$2,016

 

 

$4,439

 

 

$1,554

 

 

$8,009

 

Payroll and benefits excluded from cost of revenues

 

 

-

 

 

 

1,114

 

 

 

163

 

 

 

1,277

 

Depreciation and amortization expense

 

 

-

 

 

 

224

 

 

 

1

 

 

 

225

 

Bank factoring fees

 

 

397

 

 

 

77

 

 

 

36

 

 

 

510

 

Other operating expenses

 

 

-

 

 

 

309

 

 

 

17

 

 

 

326

 

Loss on sale or disposal of assets

 

 

-

 

 

 

17

 

 

 

-

 

 

 

17

 

Interest expense

 

 

-

 

 

 

322

 

 

 

-

 

 

 

322

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other expense (income)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Segment pre-tax income

 

$1,619

 

 

$2,376

 

 

$1,337

 

 

$5,332

 

Capital expenditures

 

$-

 

 

$7,717

 

 

$-

 

 

$7,717

 

 

 

 

Procurement

 

 

Systems

Integration

 

 

Facilities

Management

 

 

Total Segments

 

Three Months Ended June 30, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$33,002

 

 

$9,486

 

 

$1,482

 

 

$43,970

 

Cost of revenues

 

 

30,463

 

 

 

5,311

 

 

 

381

 

 

 

36,155

 

Cost of revenues – depreciation

 

 

-

 

 

 

618

 

 

 

-

 

 

 

618

 

Cost of lease operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total cost of revenues

 

 

30,463

 

 

 

5,929

 

 

 

381

 

 

 

36,773

 

Segment gross profit

 

$2,539

 

 

$3,557

 

 

$1,101

 

 

$7,197

 

Payroll and benefits excluded from cost of revenues

 

 

-

 

 

 

793

 

 

 

170

 

 

 

963

 

Depreciation and amortization expense

 

 

-

 

 

 

143

 

 

 

3

 

 

 

146

 

Bank factoring fees

 

 

756

 

 

 

100

 

 

 

3

 

 

 

859

 

Other operating expenses

 

 

-

 

 

 

343

 

 

 

15

 

 

 

358

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other expense (income)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Segment pre-tax income

 

$1,783

 

 

$2,178

 

 

$910

 

 

$4,871

 

Capital expenditures

 

$-

 

 

$12,705

 

 

$-

 

 

$12,705

 

 

 

Procurement

 

 

Systems

Integration

 

 

Facilities

Management

 

 

Total Segments

 

Six Months Ended June 30, 2026:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$58,229

 

 

$28,245

 

 

$4,013

 

 

$90,487

 

Cost of revenues

 

 

53,516

 

 

 

16,372

 

 

 

1,624

 

 

 

71,512

 

Cost of revenues – depreciation

 

 

-

 

 

 

1,925

 

 

 

-

 

 

 

1,925

 

Cost of lease operations

 

 

-

 

 

 

235

 

 

 

-

 

 

 

235

 

Total cost of revenues

 

 

53,516

 

 

 

18,532

 

 

 

1,624

 

 

 

73,672

 

Segment gross profit

 

$4,713

 

 

$9,713

 

 

$2,389

 

 

$16,815

 

Payroll and benefits excluded from cost of revenues

 

 

-

 

 

 

2,131

 

 

 

290

 

 

 

2,421

 

Depreciation and amortization expense

 

 

-

 

 

 

441

 

 

 

3

 

 

 

444

 

Bank factoring fees

 

 

904

 

 

 

259

 

 

 

51

 

 

 

1,214

 

Loss on sale or disposal of assets

 

 

-

 

 

 

17

 

 

 

-

 

 

 

17

 

Other operating expenses

 

 

-

 

 

 

656

 

 

 

22

 

 

 

678

 

Interest expense

 

 

-

 

 

 

655

 

 

 

-

 

 

 

655

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other expense (income)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Segment pre-tax income

 

$3,809

 

 

$5,554

 

 

$2,023

 

 

$11,386

 

Capital expenditures

 

$-

 

 

$8,062

 

 

$-

 

 

$8,062

 

 

 

 

Procurement

 

 

Systems

Integration

 

 

Facilities

Management

 

 

Total Segments

 

Six Months Ended June 30, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$123,179

 

 

$16,970

 

 

$2,780

 

 

$142,929

 

Cost of revenues

 

 

113,612

 

 

 

11,144

 

 

 

1,148

 

 

 

125,904

 

Cost of revenues – depreciation

 

 

-

 

 

 

618

 

 

 

-

 

 

 

618

 

Cost of lease operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total cost of revenues

 

 

113,612

 

 

 

11,762

 

 

 

1,148

 

 

 

126,522

 

Segment gross profit

 

$9,567

 

 

$5,208

 

 

$1,632

 

 

$16,407

 

Payroll and benefits excluded from cost of revenues

 

 

-

 

 

 

1,624

 

 

 

309

 

 

 

1,933

 

Depreciation and amortization expense

 

 

-

 

 

 

322

 

 

 

6

 

 

 

328

 

Bank factoring fees

 

 

2,108

 

 

 

202

 

 

 

17

 

 

 

2,327

 

Other operating expenses

 

 

14

 

 

 

623

 

 

 

24

 

 

 

661

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other expense (income)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Segment pre-tax income

 

$7,445

 

 

$2,437

 

 

$1,276

 

 

$11,158

 

Capital expenditures

 

$-

 

 

$27,574

 

 

$-

 

 

$27,574

 

 

The table below reconciles total segment pre-tax income for each period presented above to consolidated pre-tax income (unaudited, in thousands):

 

 

 

 Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Total segment pre-tax income

 

$5,332

 

 

$4,871

 

 

$11,386

 

 

$11,158

 

Less: Unallocated SG&A and depreciation

 

 

4,052

 

 

 

3,494

 

 

 

8,165

 

 

 

7,136

 

Plus: Unallocated interest income

 

 

565

 

 

 

175

 

 

 

1,290

 

 

 

558

 

Less other expense (plus other income)

 

 

-

 

 

 

-

 

 

 

(1)

 

 

-

 

Consolidated pre-tax income

 

$1,845

 

 

$1,552

 

 

$4,512

 

 

$4,580

 

The table below presents segment total assets for June 30, 2026 and December 31, 2025 (unaudited, in thousands):

 

 

 

Procurement

 

 

Systems

Integration

 

 

Facilities

Management

 

 

Total Segments

 

Total Segment Assets at June 30, 2026

 

$20,446

 

 

$55,014

 

 

$1,848

 

 

$77,308

 

Total Segment Assets at December 31, 2025

 

 

26,159

 

 

 

44,661

 

 

 

903

 

 

 

71,723

 

 

The table below reconciles combined segment total assets for each period presented above to consolidated total assets (in thousands):

 

 

 

June 30,

2026

 

 

December 31,

2025

 

 

 

(Unaudited)

 

 

 

 

Combined total assets included in segments

 

$77,308

 

 

$71,723

 

Plus items not allocated to segments:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

67,679

 

 

 

85,510

 

Other receivables

 

 

25

 

 

 

56

 

Restricted cash

 

 

1,811

 

 

 

-

 

Prepaid expenses and other current assets

 

 

1,944

 

 

 

1,642

 

Property and equipment, net

 

 

2,374

 

 

 

286

 

Lease right-of-use asset

 

 

14,569

 

 

 

15,294

 

Deferred tax asset, net

 

 

7,242

 

 

 

7,917

 

Other assets

 

 

2,369

 

 

 

2,507

 

Consolidated total assets

 

$175,321

 

 

$184,935