Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting

Note 11. Segment Reporting

We have three reportable segments: Intermec-branded products, Intermec-branded services, and Voice solutions. Intermec-branded services and Voice solutions each comprise two reporting units. Intermec-branded services are divided into: Core Service and Intermec Global Solutions (“IGS”). Voice solutions contains the Supply Chain (“VSC”) and Healthcare (“VHS”) reporting units.

We have two measures of segment performance: revenue and gross profit. Performance and resource allocation are primarily measured by sales and standard gross profit. All other earnings, costs, and expenses are aggregated and reported on a consolidated basis. Our CEO, who is our chief operating decision maker, evaluates revenue performance of product lines, both domestically and internationally. However, operating, strategic, and resource allocation decisions are based primarily on the overall performance of our operating segments. It is not practicable to segregate total assets by segment. Our operating segments have distinct products and services, and therefore intersegment revenues are minimal.

In the third quarter of 2012, we recorded an additional goodwill impairment charge of $0.5 million, as a result of finalizing our first quarter 2012 Step 2 impairment test for our VSC reporting unit, which is included in our Voice Solutions operating segment. Also during the third quarter of 2012, we adjusted our previously estimated impairment charge of $0.8 million taken in the second quarter of 2012 for our VHS reporting unit, which is included in our Voice solutions operating segment, by $0.7 million as a result of finalizing our Step 2 impairment test.

For the nine months ended September 30, 2012, total goodwill impairment charges were $41.2 million and $0.1 million for our VSC and VHS reporting units, respectively, which are included in our Voice solutions operating segment. There were no such impairments recorded in the nine months ended October 2, 2011. See Note 16, Goodwill and Other Long-lived Assets for further discussion of our goodwill impairments.

Segment Products and Services

Our three operating segments provide our customers with the following products and services:

Intermec-branded products	Design, development, manufacture, sale and resale of mobile computing products, bar code scanners, wired and wireless bar code printers and label media products, and RFID products and license fees.
Intermec-branded services	Managed services, customer support, product maintenance and professional services related to products, and systems integration.
Voice solutions	Voice data, collection terminals, and professional services related to these products.

Revenues and gross profit by operating segments were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
Revenues:
Intermec-branded products	$	130,033	$	145,818	$	382,983	$	433,001
Intermec-branded services	33,638		35,203		103,335		107,365
Voice solutions	29,150		30,784		87,132		71,040
Total	$	192,821	$	211,805	573,450		$	611,406
Gross profit:
Intermec-branded products	$	50,192	$	59,896	$	134,354	$	172,364
Intermec-branded services	12,504		10,544		40,521		36,357
Voice solutions	17,288		17,415		50,231		38,745
Total	$	79,984	$	87,855	$	225,106	$	247,466

Revenues by product lines were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
Intermec branded:
Systems and solutions	$	92,641	$	102,139	$	271,371	$	301,183
Printer and media	37,392		43,679		111,612		131,818
Service	33,638		35,203		103,335		107,365
Voice solutions	29,150		30,784		87,132		71,040
Total	$	192,821	$	211,805	$	573,450	$	611,406

Revenues by region were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
North America	$	104,008	$	107,073	$	296,843	$	292,608
Europe, Middle East and Africa (EMEA)	50,184		64,710		160,689		200,635
Latin America and Mexico (LATAM)	27,365		23,648		73,864		69,994
Asia Pacific (ASIAPAC)	11,264		16,374		42,054		48,169
	$	192,821	$	211,805	$	573,450	$	611,406

One customer represented 23% and 20% of total Company revenues for the three and nine months ended September 30, 2012, and one customer represented 21% and 22% of total Company revenues for the three and nine months ended October 2, 2011. Revenues from this customer are reported within each of our segments.