Segment Analysis |
NOTE 12 - SEGMENT ANALYSIS
We operate in two reportable segments, which
are managed separately based upon fundamental differences in their operations. Coda Octopus Martech and Coda Octopus Colmek (together
“Marine Engineering Business” or “Service Segments”) operate as contractors and Coda Octopus Products operations
are comprised primarily of product sales, rental of equipment and/or software and associated services (“Marine Technology
Business” or “Products Segment”).
Segment operating income is total segment revenue
reduced by operating expenses identifiable with the business segment. Corporate includes general corporate administrative costs
(“Overhead”).
The Company evaluates performance and allocates
resources based upon segment operating income. The accounting policies of the reportable segments are the same as those described
in the summary of accounting policies.
There are inter-segment sales which have been
eliminated in our financial statements but are disclosed in the tables below for information purposes.
The following table summarizes segment asset
and operating balances by reportable segment as of and for the year ended October 31, 2019 and 2018, respectively.
The Company’s reportable business segments
operate in four geographic locations:
|
● |
Americas |
|
● |
Europe |
|
● |
Australia/Asia |
|
● |
Middle East/Africa |
Information concerning principal geographic
areas is presented below according to the area where the activity has taken place for the year ended October 31, 2019 and 2018
respectively:
|
|
Marine Technology Business (Products) |
|
|
Marine Engineering Business (Services) |
|
|
Overhead |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from External Customers |
|
$ |
12,908,110 |
|
|
$ |
12,148,824 |
|
|
$ |
- |
|
|
$ |
25,056,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues |
|
|
2,519,768 |
|
|
|
6,107,847 |
|
|
|
- |
|
|
|
8,627,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
10,388,342 |
|
|
|
6,040,977 |
|
|
|
- |
|
|
|
16,429,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & Development |
|
|
2,208,749 |
|
|
|
146,061 |
|
|
|
446,521 |
|
|
|
2,801,331 |
|
Selling, General & Administrative |
|
|
3,080,134 |
|
|
|
2,492,410 |
|
|
|
1,802,007 |
|
|
|
7,374,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
5,288,883 |
|
|
|
2,638,471 |
|
|
|
2,248,528 |
|
|
|
10,175,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from Operations |
|
|
5,099,459 |
|
|
|
3,402,506 |
|
|
|
(2,248,528 |
) |
|
|
6,253,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
|
70,186 |
|
|
|
26 |
|
|
|
- |
|
|
|
70,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (Expense) |
|
|
(10,564 |
) |
|
|
(14,820 |
) |
|
|
(65,712 |
) |
|
|
(91,096 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense) |
|
|
59,622 |
|
|
|
(14,794 |
) |
|
|
(65,712 |
) |
|
|
(20,884 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) before Income Taxes |
|
|
5,159,081 |
|
|
|
3,387,712 |
|
|
|
(2,314,240 |
) |
|
|
6,232,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Tax Benefit |
|
|
(9,391 |
) |
|
|
33,454 |
|
|
|
15,359 |
|
|
|
39,422 |
|
Deferred Tax (Expense) |
|
|
(336,101 |
) |
|
|
(496,318 |
) |
|
|
(214,357 |
) |
|
|
(1,046,773 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Income Tax (Expense) |
|
|
(345,492 |
) |
|
|
(462,864 |
) |
|
|
(198,998 |
) |
|
|
(1,007,354 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
4,813,589 |
|
|
$ |
2,924,848 |
|
|
$ |
(2,513,238 |
) |
|
$ |
5,225,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
19,206,401 |
|
|
$ |
14,165,120 |
|
|
$ |
959,472 |
|
|
$ |
34,330,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
$ |
1,573,572 |
|
|
$ |
962,641 |
|
|
$ |
1,167,007 |
|
|
$ |
3,703,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from Intercompany Sales - eliminated from sales above |
|
$ |
1,590,548 |
|
|
$ |
145,150 |
|
|
$ |
2,700,000 |
|
|
$ |
4,435,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
$ |
581,942 |
|
|
$ |
236,092 |
|
|
$ |
15,741 |
|
|
$ |
833,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of Long-lived Assets |
|
$ |
2,183,009 |
|
|
$ |
81,446 |
|
|
$ |
37,180 |
|
|
$ |
2,301,635 |
|
|
|
Marine Technology Business (Products) |
|
|
Marine Engineering Business (Services) |
|
|
Overhead |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended October 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from External Customers |
|
$ |
11,449,416 |
|
|
$ |
6,570,013 |
|
|
$ |
- |
|
|
$ |
18,019,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues |
|
|
1,894,808 |
|
|
|
3,462,259 |
|
|
|
- |
|
|
|
5,357,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
9,554,608 |
|
|
|
3,107,754 |
|
|
|
- |
|
|
|
12,662,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & Development |
|
|
2,048,285 |
|
|
|
523,429 |
|
|
|
- |
|
|
|
2,571,714 |
|
Selling, General & Administrative |
|
|
2,882,049 |
|
|
|
2,366,226 |
|
|
|
1,531,606 |
|
|
|
6,779,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
4,930,334 |
|
|
|
2,889,655 |
|
|
|
1,531,606 |
|
|
|
9,351,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from Operations |
|
|
4,624,274 |
|
|
|
218,099 |
|
|
|
(1,531,606 |
) |
|
|
3,310,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
|
39,122 |
|
|
|
2,100 |
|
|
|
- |
|
|
|
41,222 |
|
Interest Expense |
|
|
(12,154 |
) |
|
|
(59,599 |
) |
|
|
(177,337 |
) |
|
|
(249,090 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense) |
|
|
26,968 |
|
|
|
(57,499 |
) |
|
|
(177,337 |
) |
|
|
(207,868 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) before Income Taxes |
|
|
4,651,242 |
|
|
|
160,600 |
|
|
|
(1,708,943 |
) |
|
|
3,102,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Tax Benefit (Expense) |
|
|
133,419 |
|
|
|
- |
|
|
|
(1,956 |
) |
|
|
131,463 |
|
Deferred Tax Benefit |
|
|
- |
|
|
|
- |
|
|
|
1,754,169 |
|
|
|
1,754,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit |
|
|
133,419 |
|
|
|
- |
|
|
|
1,752,213 |
|
|
|
1,885,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
4,784,661 |
|
|
$ |
160,600 |
|
|
$ |
43,270 |
|
|
$ |
4,988,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
15,061,693 |
|
|
$ |
11,674,640 |
|
|
$ |
2,000,278 |
|
|
$ |
28,736,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
$ |
1,142,661 |
|
|
$ |
1,498,828 |
|
|
$ |
1,708,172 |
|
|
$ |
4,349,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from Intercompany Sales - eliminated from sales above |
|
$ |
1,176,438 |
|
|
$ |
437,387 |
|
|
$ |
3,100,000 |
|
|
$ |
4,713,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
$ |
448,620 |
|
|
$ |
311,980 |
|
|
$ |
14,143 |
|
|
$ |
774,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of Long-lived Assets |
|
$ |
487,159 |
|
|
$ |
76,041 |
|
|
$ |
76,561 |
|
|
$ |
639,761 |
|
|
|
For the Year Ended October 31, 2019 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Disaggregation of Total Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
$ |
744,604 |
|
|
$ |
57,497 |
|
|
$ |
802,101 |
|
Equipment Rentals |
|
|
639,055 |
|
|
|
- |
|
|
|
639,055 |
|
Software Sales |
|
|
53,540 |
|
|
|
- |
|
|
|
53,540 |
|
Engineering Parts |
|
|
- |
|
|
|
9,117,338 |
|
|
|
9,117,338 |
|
Services |
|
|
1,187,873 |
|
|
|
1,744,577 |
|
|
|
2,932,450 |
|
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
1,626,052 |
|
|
|
145,933 |
|
|
|
1,771,985 |
|
Equipment Rentals |
|
|
1,137,244 |
|
|
|
- |
|
|
|
1,137,244 |
|
Software Sales |
|
|
167,903 |
|
|
|
- |
|
|
|
167,903 |
|
Engineering Parts |
|
|
- |
|
|
|
1,023,822 |
|
|
|
1,023,822 |
|
Services |
|
|
726,050 |
|
|
|
59,657 |
|
|
|
785,707 |
|
Australia/Asia |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
4,259,093 |
|
|
|
- |
|
|
|
4,259,093 |
|
Equipment Rentals |
|
|
876,141 |
|
|
|
- |
|
|
|
876,141 |
|
Software Sales |
|
|
324,222 |
|
|
|
- |
|
|
|
324,222 |
|
Services |
|
|
627,615 |
|
|
|
- |
|
|
|
627,615 |
|
Middle East & Africa |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
301,165 |
|
|
|
- |
|
|
|
301,165 |
|
Equipment Rentals |
|
|
36,130 |
|
|
|
- |
|
|
|
36,130 |
|
Software Sales |
|
|
58,826 |
|
|
|
- |
|
|
|
58,826 |
|
Services |
|
|
142,597 |
|
|
|
- |
|
|
|
142,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
12,908,110 |
|
|
$ |
12,148,824 |
|
|
$ |
25,056,934 |
|
|
|
For the Year Ended October 31, 2019 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Total Net Sales by Geographic Area |
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
2,625,072 |
|
|
$ |
10,919,412 |
|
|
$ |
13,544,484 |
|
Europe |
|
|
3,657,249 |
|
|
|
1,229,412 |
|
|
|
4,886,661 |
|
Australia/Asia |
|
|
6,087,071 |
|
|
|
- |
|
|
|
6,087,071 |
|
Middle East & Africa |
|
|
538,718 |
|
|
|
- |
|
|
|
538,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
12,908,110 |
|
|
$ |
12,148,824 |
|
|
$ |
25,056,934 |
|
|
|
For the Year Ended October 31, 2019 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Total Net Sales by Product Line |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
$ |
6,930,914 |
|
|
$ |
203,430 |
|
|
$ |
7,134,344 |
|
Equipment Rentals |
|
|
2,688,570 |
|
|
|
- |
|
|
|
2,688,570 |
|
Software Sales |
|
|
604,491 |
|
|
|
- |
|
|
|
604,491 |
|
Engineering Parts |
|
|
- |
|
|
|
10,141,160 |
|
|
|
10,141,160 |
|
Services |
|
|
2,684,135 |
|
|
|
1,804,234 |
|
|
|
4,488,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
12,908,110 |
|
|
$ |
12,148,824 |
|
|
$ |
25,056,934 |
|
|
|
For the Year Ended October 31, 2018 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Disaggregation of Total Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
$ |
719,973 |
|
|
$ |
- |
|
|
$ |
719,973 |
|
Equipment Rentals |
|
|
681,757 |
|
|
|
- |
|
|
|
681,757 |
|
Software Sales |
|
|
52,145 |
|
|
|
- |
|
|
|
52,145 |
|
Engineering Parts |
|
|
- |
|
|
|
4,468,170 |
|
|
|
4,468,170 |
|
Services |
|
|
1,025,608 |
|
|
|
441,842 |
|
|
|
1,467,450 |
|
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
1,640,546 |
|
|
|
211,366 |
|
|
|
1,851,912 |
|
Equipment Rentals |
|
|
1,526,302 |
|
|
|
- |
|
|
|
1,526,302 |
|
Software Sales |
|
|
249,779 |
|
|
|
- |
|
|
|
249,779 |
|
Engineering Parts |
|
|
- |
|
|
|
1,448,635 |
|
|
|
1,448,635 |
|
Services |
|
|
836,578 |
|
|
|
- |
|
|
|
836,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Australia/Asia |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
2,580,263 |
|
|
|
- |
|
|
|
2,580,263 |
|
Equipment Rentals |
|
|
117,389 |
|
|
|
- |
|
|
|
117,389 |
|
Software Sales |
|
|
568,407 |
|
|
|
- |
|
|
|
568,407 |
|
Services |
|
|
238,234 |
|
|
|
- |
|
|
|
238,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middle East & Africa |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
|
1,017,527 |
|
|
|
- |
|
|
|
1,017,527 |
|
Equipment Rentals |
|
|
41,067 |
|
|
|
- |
|
|
|
41,067 |
|
Software Sales |
|
|
85,419 |
|
|
|
- |
|
|
|
85,419 |
|
Services |
|
|
68,422 |
|
|
|
- |
|
|
|
68,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
11,449,416 |
|
|
$ |
6,570,013 |
|
|
$ |
18,019,429 |
|
|
|
For the Year Ended October 31, 2018 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Total Net Sales by Geographic Area |
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
2,479,483 |
|
|
$ |
4,910,012 |
|
|
$ |
7,389,495 |
|
Europe |
|
|
4,253,205 |
|
|
|
1,660,001 |
|
|
|
5,913,206 |
|
Australia/Asia |
|
|
3,504,293 |
|
|
|
- |
|
|
|
3,504,293 |
|
Middle East & Africa |
|
|
1,212,435 |
|
|
|
- |
|
|
|
1,212,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
11,449,416 |
|
|
$ |
6,570,013 |
|
|
$ |
18,019,429 |
|
|
|
For the Year Ended October 31, 2018 |
|
|
|
Marine |
|
|
Marine |
|
|
|
|
|
|
Technology |
|
|
Engineering |
|
|
Grand |
|
|
|
Business |
|
|
Business |
|
|
Total |
|
Total Net Sales by Product Line |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Sales |
|
$ |
5,958,309 |
|
|
$ |
211,366 |
|
|
$ |
6,169,675 |
|
Equipment Rentals |
|
|
2,366,515 |
|
|
|
- |
|
|
|
2,366,515 |
|
Software Sales |
|
|
955,750 |
|
|
|
- |
|
|
|
955,750 |
|
Engineering Parts |
|
|
- |
|
|
|
5,916,805 |
|
|
|
5,916,805 |
|
Services |
|
|
2,168,842 |
|
|
|
441,842 |
|
|
|
2,610,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales |
|
$ |
11,449,416 |
|
|
$ |
6,570,013 |
|
|
$ |
18,019,429 |
|
|