REPORTABLE SEGMENT AND RELATED INFORMATION

9 Months Ended

Sep. 30, 2015

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 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 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) before income taxes. 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-month period ended September 30 (in thousands):

	Outsourced Portals		Other Software & Services		Other Reconciling Items			Consolidated Total
2015
Revenues	$	70,123	$	4,924	$	-		$	75,047
Costs & expenses		44,703		1,365		6,932			53,000
Depreciation & amortization		1,973		15		128			2,116
Operating income (loss) before income taxes	$	23,447	$	3,544	$	(7,060	)	$	19,931
2014
Revenues	$	65,304	$	4,223	$	-		$	69,527
Costs & expenses (1)		42,529		1,316		6,930			50,775
Depreciation & amortization		2,201		8		83			2,292
Operating income (loss) before income taxes	$	20,574	$	2,899	$	(7,013	)	$	16,460

(1) The Company reclassified certain income statement employee benefit-related expenses for the three-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $1.0 million and a corresponding increase in costs & expenses in Outsourced Portals. See Note 1.

The table below reflects summarized financial information for the Company’s reportable and operating segments for the nine-month period ended September 30 (in thousands):

	Outsourced Portals		Other Software & Services		Other Reconciling Items			Consolidated Total
2015
Revenues	$	207,067	$	14,151	$	-		$	221,218
Costs & expenses		136,201		3,975		21,100			161,276
Depreciation & amortization		6,322		33		357			6,712
Operating income (loss) before income taxes	$	64,544	$	10,143	$	(21,457	)	$	53,230
2014
Revenues	$	193,595	$	12,484	$	-		$	206,079
Costs & expenses (1)		125,916		3,595		19,661			149,172
Depreciation & amortization		6,568		29		222			6,819
Operating income (loss) before income taxes	$	61,111	$	8,860	$	(19,883	)	$	50,088

(1) The Company reclassified certain income statement employee benefit-related expenses for the nine-month period ended September 30, 2014 to conform to the 2015 presentation. The reclassification resulted in a reduction of costs & expenses in Other Reconciling Items of $3.2 million and corresponding increases in costs & expenses of $3.1 million and $0.1 million, respectively, in Outsourced Portals and Other Software & Services. See Note 1.

The Company’s Texas portal contract accounted for approximately 21% of the Company’s total consolidated revenues for the three- and nine-month periods ended September 30, 2015 compared to 22% in the corresponding prior year periods. No other state portal contract accounted for more than 10% of the Company’s total consolidated revenues.