| BUSINESS SEGMENTS |
NOTE L — BUSINESS SEGMENTS
Our Chairman and Chief Executive Officer is our Chief Operating Decision Maker (“CODM”). We report operational data to our CODM at the segment level, which the CODM used to evaluate performance and allocate resources
based on gross profit and income (loss) from operations by segment. While the Company believes there are synergies between the two business segments, they are managed separately because they have different risks and opportunities. The two reportable segments are:
|
● |
Asset Management Solutions — comprised of activities to extract value from strategic asset acquisitions through leasing, trading, or disassembling for product sales. |
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● |
TechOps — comprised of MRO activities and product sales of internally developed engineered solutions and other serviceable products. |
The Asset Management Solutions segment provides leasing solutions of Flight Equipment to passenger and cargo operators worldwide. Assets considered to be at or near the end their useful lives, supplied by our leasing portfolio or acquisitions, are analyzed for return maximization to assess whether they will be sold as whole assets or disassembled and sold as individual spare parts and components.
The TechOps segment consists of aviation maintenance and services business that provide maintenance support for aircraft and aircraft components, and sale of engineered solutions. Our MRO business also engages in longer term projects such as aircraft modifications, aircraft cargo conversions, and aircraft storage. The segment also includes MRO of landing gear, thrust reversers, and other components. Cost of sales consist principally of the cost of product, direct labor, and overhead. Our engineered solutions revenue consists of sales of products internally developed as permitted by Supplemental Type Certificates issued by the FAA. These products are proprietary in nature and function as non-original equipment manufacturer solutions to airworthiness directives and other technical challenges. In order to develop these products, we engage in research and development activities. Our TechOps division will engage in the repair and sale of used serviceable materials through its ability to overhaul existing inventory.
The accounting policies for the segments are the same as those described in Note B. Our reportable segments are aligned principally around the differences in products and services. Gross Profit is calculated by subtracting cost of sales from revenue; income (loss) from operations is calculated by subtracting unapplied operating expenses and selling, general, and administrative expenses. The assets and certain expenses related to corporate activities are not allocated to the segments. The segment reporting excludes the allocation of interest expense, interest income, other income (expense), net, change in fair value of warrant liability and income tax expense (benefit).
Selected financial information for each segment is as follows (in thousands):
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|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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|
2025 |
|
2024 |
|
2025 |
|
2024 |
Revenue |
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|
|
|
|
|
|
|
|
|
|
|
Asset Management Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft |
|
$ |
10,419 |
|
$ |
9,110 |
|
$ |
17,769 |
|
$ |
25,448 |
Engine |
|
|
65,846 |
|
|
32,689 |
|
|
97,709 |
|
|
75,613 |
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|
|
76,265 |
|
|
41,799 |
|
|
115,478 |
|
|
101,061 |
TechOps |
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|
|
|
|
|
|
|
|
|
|
|
MRO services |
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|
24,562 |
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|
29,517 |
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|
45,715 |
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|
55,365 |
Product sales |
|
|
6,555 |
|
|
5,785 |
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|
11,965 |
|
|
11,215 |
|
|
|
31,117 |
|
|
35,302 |
|
|
57,680 |
|
|
66,580 |
Total |
|
$ |
107,382 |
|
$ |
77,101 |
|
$ |
173,158 |
|
$ |
167,641 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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|
2025 |
|
2024 |
|
2025 |
|
2024 |
Cost of sales and operating expenses |
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|
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Asset Management Solutions |
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|
|
|
|
|
|
|
|
|
|
Aircraft |
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$ |
6,042 |
|
$ |
5,688 |
|
$ |
11,816 |
|
$ |
17,189 |
Engine |
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|
43,266 |
|
|
20,750 |
|
|
64,656 |
|
|
45,859 |
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|
|
49,308 |
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|
26,438 |
|
|
76,472 |
|
|
63,048 |
TechOps |
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|
|
|
|
|
|
|
|
|
|
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MRO services |
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18,764 |
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|
24,956 |
|
|
35,928 |
|
|
45,888 |
Product sales |
|
|
3,973 |
|
|
3,987 |
|
|
7,456 |
|
|
8,189 |
|
|
|
22,737 |
|
|
28,943 |
|
|
43,384 |
|
|
54,077 |
Total |
|
$ |
72,045 |
|
$ |
55,381 |
|
$ |
119,856 |
|
$ |
117,125 |
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|
|
|
|
|
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|
|
|
|
|
|
|
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Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Gross profit |
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|
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|
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|
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Asset Management Solutions |
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|
|
|
|
|
|
|
|
|
|
|
Aircraft |
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$ |
4,377 |
|
$ |
3,422 |
|
$ |
5,953 |
|
$ |
8,259 |
Engine |
|
|
22,580 |
|
|
11,939 |
|
|
33,053 |
|
|
29,754 |
|
|
|
26,957 |
|
|
15,361 |
|
|
39,006 |
|
|
38,013 |
TechOps |
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|
|
|
|
|
|
|
|
|
|
|
MRO services |
|
|
5,798 |
|
|
4,561 |
|
|
9,787 |
|
|
9,477 |
Product sales |
|
|
2,582 |
|
|
1,798 |
|
|
4,509 |
|
|
3,026 |
|
|
|
8,380 |
|
|
6,359 |
|
|
14,296 |
|
|
12,503 |
Total |
|
$ |
35,337 |
|
$ |
21,720 |
|
$ |
53,302 |
|
$ |
50,516 |
The following table reconciles segment gross profit to income (loss) before income tax provision for the three and six months ended June 30, 2025 and 2024 (in thousands):
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|
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Three Months Ended June 30, 2025 |
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Three Months Ended June 30, 2024 |
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|
Asset Management Solutions |
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|
TechOps |
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Total |
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Asset Management Solutions |
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|
TechOps |
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Total |
|
|
Gross Profit |
|
$ |
26,957 |
|
$ |
8,380 |
|
$ |
35,337 |
|
$ |
15,361 |
|
$ |
6,359 |
|
$ |
21,720 |
|
|
Operating expenses |
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|
(3,430) |
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|
(2,525) |
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|
(5,955) |
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|
(3,212) |
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|
(2,824) |
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(6,036) |
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|
Selling, general and administrative expenses |
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(4,066) |
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|
(3,173) |
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|
(7,239) |
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(3,820) |
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|
(5,033) |
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|
(8,853) |
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|
Segment income (loss) from operations |
|
$ |
19,461 |
|
$ |
2,682 |
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$ |
22,143 |
|
$ |
8,329 |
|
$ |
(1,498) |
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$ |
6,831 |
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|
Other corporate expenses |
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|
|
|
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|
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(9,629) |
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|
|
|
|
|
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(8,683) |
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|
Income (loss) from operations |
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|
|
|
|
|
|
12,514 |
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|
|
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|
|
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(1,852) |
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Other (expense) income: |
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|
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|
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|
|
|
|
|
|
|
|
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|
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Interest expense, net |
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|
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|
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(2,452) |
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|
|
|
|
|
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(1,528) |
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Other income, net |
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|
|
134 |
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|
102 |
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Change in fair value of warrant liability |
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|
|
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|
131 |
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|
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|
138 |
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Income (loss) before income tax provision |
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$ |
10,327 |
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|
$ |
(3,140) |
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|
|
|
|
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|
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Six Months Ended June 30, 2025 |
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Six Months Ended June 30, 2024 |
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|
Asset Management Solutions |
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|
TechOps |
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Total |
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Asset Management Solutions |
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|
TechOps |
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|
Total |
Gross Profit |
|
$ |
39,006 |
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$ |
14,296 |
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$ |
53,302 |
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$ |
38,013 |
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$ |
12,503 |
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$ |
50,516 |
Operating expenses |
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|
(7,080) |
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|
(4,617) |
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(11,697) |
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(6,487) |
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(5,711) |
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|
(12,198) |
Selling, general and administrative expenses |
|
|
(7,802) |
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|
(8,219) |
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|
(16,021) |
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|
(7,484) |
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|
(10,200) |
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|
(17,684) |
Segment income (loss) from operations |
|
$ |
24,124 |
|
$ |
1,460 |
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$ |
25,584 |
|
$ |
24,042 |
|
$ |
(3,408) |
|
$ |
20,634 |
Other corporate expenses |
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|
|
|
|
|
|
|
(19,717) |
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|
|
|
|
|
|
|
(17,823) |
Income from operations |
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|
|
|
|
|
|
|
5,867 |
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|
|
|
|
|
|
|
2,811 |
Other (expense) income: |
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|
|
|
|
|
|
|
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|
|
|
|
|
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|
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Interest expense, net |
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|
|
|
|
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|
(3,633) |
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|
|
|
|
|
|
|
(2,463) |
Other income, net |
|
|
|
|
|
|
|
|
2,022 |
|
|
|
|
|
|
|
|
271 |
Change in fair value of warrant liability |
|
|
|
|
|
|
|
|
74 |
|
|
|
|
|
|
|
|
2,117 |
Income before income tax provision |
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|
|
|
|
|
|
$ |
4,330 |
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|
|
|
|
|
|
$ |
2,736 |
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|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2025 |
|
2024 |
Total Assets |
|
|
|
|
|
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Asset Management Solutions |
|
$ |
422,622 |
|
$ |
383,336 |
TechOps |
|
|
208,889 |
|
|
205,655 |
Corporate |
|
|
15,160 |
|
|
15,732 |
|
|
$ |
646,671 |
|
$ |
604,723 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Total Depreciation and Amortization Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Management Solutions |
|
$ |
3,025 |
|
$ |
2,266 |
|
$ |
6,373 |
|
$ |
3,828 |
|
TechOps |
|
|
1,241 |
|
|
1,129 |
|
|
2,545 |
|
|
2,088 |
|
Corporate |
|
|
262 |
|
|
260 |
|
|
553 |
|
|
518 |
|
|
|
$ |
4,528 |
|
$ |
3,655 |
|
$ |
9,471 |
|
$ |
6,434 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Total Capital Expenditures |
|
2025 |
|
2024 |
Asset Management Solutions |
|
$ |
3,394 |
|
$ |
6,790 |
TechOps |
|
|
1,776 |
|
|
5,420 |
Corporate |
|
|
339 |
|
|
590 |
|
|
$ |
5,509 |
|
$ |
12,800 |
Intersegment sales include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed or products sold and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated upon consolidation. Intersegment revenue for the three and six months ended June 30, 2025 and 2024, is as follows (in thousands):
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Asset Management Solutions |
|
$ |
1,158 |
|
$ |
170 |
|
$ |
1,581 |
|
$ |
606 |
|
TechOps |
|
|
938 |
|
|
2,019 |
|
|
4,033 |
|
|
7,597 |
|
Total intersegment revenue |
|
$ |
2,096 |
|
$ |
2,189 |
|
$ |
5,614 |
|
$ |
8,203 |
|
|