Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.20.1
Segment Reporting
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Reporting SEGMENT REPORTING
We are engaged in selling products and services through various channels stemming from our retail, wholesale, and e-Commerce operations located throughout the U.S., Canada and Europe. We define our segments as those operations whose results our CODMs regularly review to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes.
The reportable segments identified are our business activities for which discrete financial information is available and for which operating results are regularly reviewed by our CODMs. Beginning with the quarter ended March 31, 2019, we had a change in reportable segments due to the Canadian operations becoming a significant part of the business. We had an additional change in reportable segments beginning with the quarter ended September 30, 2019 due to the acquisition of our Netherlands subsidiary, at which time we established our European segment. As of December 31, 2019, we determined that we had three reportable segments based on the geographical areas where we conduct our business: (1) U.S., (2) Canada, and (3) Europe. The U.S. operating segment is comprised of our U.S. operations, the Canadian operating segment is comprised of our Canadian operations, and the European operating segment is comprised of our European operations, currently based in the Netherlands. Corporate and other activities which are not allocated to our reportable segments consist primarily of equity-based compensation expenses, unrealized gains on equity securities, and other corporate overhead items. Assets related to our corporate headquarters as well as our cash proceeds from the IPO are not allocated to any of our reportable segments. We sell similar individual products and services in each of our segments.
Concurrent with the change in reportable operating segments, we recast our prior period financial information to reflect comparable financial information for the new segment structure. Historical financial information presented herein reflects this change.
The table below provides information on revenues from external customers, intersegment revenues, segment operating income (loss), and depreciation and amortization by reportable segment for the years ended December 31, 2019 and 2018. We eliminate intersegment revenues in consolidation.
For the Year Ended December 31,
2019 2018
(in thousands)
Revenue from external customers:
United States $ 160,243    $ 164,018   
Canada 22,120    14,917   
Europe 2,643    —   
Corporate and other —    —   
$ 185,006    $ 178,935   
Intercompany revenues:
United States $ 5,624    $ 3,900   
Canada 143    293   
Europe 284    —   
Corporate and other —    —   
$ 6,051    $ 4,193   
Income (loss) before income taxes:
United States $ (10,417)   $ 3,141   
Canada 74    945
Europe (278)   —   
Corporate and other (18,268)   (9,655)  
$ (28,889)   $ (5,569)  
Depreciation and amortization:
United States $ 2,117    $ 1,398   
Canada 43    17   
Europe 65    —   
Corporate and other 480    77   
$ 2,705    $ 1,492   
The table below provides information on total goodwill and intangibles and total assets by reportable segment as of December 31, 2019 and 2018.
As of December 31,
2019 2018
(in thousands)
Total goodwill and intangibles:
United States $ 13,625    $ 8,820   
Canada —    —   
Europe 4,328    —   
Corporate and other 330    288   
$ 18,283    $ 9,108   
Total assets:
United States $ 77,034    $ 57,240   
Canada 10,768    8,688   
Europe 8,809    —   
Corporate and other 56,591    12,093   
$ 153,202    $ 78,021   
The tables below provides information on our revenue by product type:
For the Year Ended December 31,
2019 2018
(in thousands)
Revenues:
Vaporizers and components $ 144,192    $ 148,637   
Customized products and packaging $ 12,107    $ 8,319   
Functional glass $ 6,040    $ 5,502   
Tools and appliances $ 3,640    $ 3,018   
Hemp-derived CBD products $ 3,364    $ —   
Closed system $ 4,094    $ 4,500   
Grinders $ 3,351    $ 2,500   
Papers and wraps $ 4,086    $ 621   
Other $ 4,132    $ 5,838   
$ 185,006    $ 178,935   

The tables below provide information on our revenue and long-lived assets by geographical area. Our long-lived assets are primarily comprised of property and equipment, net and operating lease ROU assets.
For the Year Ended December 31,
2019 2018
(in thousands)
Revenues:
United States $ 155,002    $ 158,635   
Canada 22,840    15,836   
Europe 3,628    821   
Other 3,536    3,643   
$ 185,006    $ 178,935   

As of December 31,
2019 2018
(in thousands)
Long-lived assets:
United States $ 17,162    $ 11,474   
Canada 519    167   
Europe 179    —   
$ 17,860    $ 11,641