Reportable Segment and Related Information

3 Months Ended

Mar. 31, 2014

Reportable Segment and Related Information

6.  REPORTABLE SEGMENT AND RELATED INFORMATION

The Outsourced Portals segment is the Company’s only reportable segment and generally includes the Company’s subsidiaries operating enterprise-wide outsourced state and local government portals and the corporate divisions that directly support portal operations. The Other Software & Services category primarily includes the Company’s subsidiaries that provide software development and services, other than enterprise-wide outsourced portal services, to state and local governments as well as federal agencies. Each of the Company’s businesses within the Other Software & Services category is an operating segment and has been grouped together to form the Other Software & Services category, as none of the operating segments meets the quantitative threshold of a separately reportable segment. Unallocated corporate-level expenses are reported in the reconciliation of the segment totals to the related consolidated totals as “Other Reconciling Items.” There have been no significant intersegment transactions for the periods reported. The summary of significant accounting policies applies to all reportable and operating segments.

The measure of profitability by which management, including the Company’s chief operating decision maker, evaluates the performance of its segments and allocates resources to them is operating income (loss). Segment assets or other segment balance sheet information is not presented to the Company’s chief operating decision maker. Accordingly, the Company has not presented information relating to segment assets.

The table below reflects summarized financial information for the Company’s reportable and operating segments for the three months ended March 31 (in thousands):

	Outsourced Portals		Other Software & Services		Other Reconciling Items			Consolidated Total
2014
Revenues	$	61,482	$	3,915	$	-		$	65,397
Costs & expenses		39,406		955		7,296			47,657
Depreciation & amortization		2,169		11		70			2,250
Operating income (loss)	$	19,907	$	2,949	$	(7,366	)	$	15,490
2013
Revenues	$	58,042	$	3,182	$	-		$	61,224
Costs & expenses		34,875		1,205		7,393			43,473
Depreciation & amortization		1,947		15		65			2,027
Operating income (loss)	$	21,220	$	1,962	$	(7,458	)	$	15,724

The following is a reconciliation of total segment operating income to total consolidated income before income taxes for the three months ended March 31 (in thousands):

	2014			2013
Total segment operating income	$	22,856		$	23,182
Other reconciling items		(7,366	)		(7,458	)
Other expense, net		(104	)		(19	)
Consolidated income before income taxes	$	15,386		$	15,705

For the three-month periods ended March 31, 2014 and 2013, the Company’s Texas portal contract accounted for approximately 22% and 24% of the Company’s total consolidated revenues, respectively. No other contract accounted for 10% or more of the Company’s total consolidated revenues for the three-month periods ended March 31, 2014 or 2013, respectively.