Business Segment Information

9 Months Ended

Dec. 31, 2012

Business Segment Information

Business Segment Information

10. Business Segment Information

We operate in three reportable segments: Roadway Sensors, Transportation Systems and iPerform.

The Roadway Sensors segment includes, among other products, our Vantage, Versicam, Pico, Vantage Vector, SmartCycle, SmartScan and Abacus vehicle detection systems for traffic intersection control, incident detection and certain highway traffic data collection applications.

The Transportation Systems segment includes transportation engineering and consulting services and the development of transportation management and traveler information systems for the ITS industry. This segment includes the operations of MET, which specializes in 511 advanced traveler information systems and offers Maintenance Decision Support System management tools that allow users to create solutions to meet roadway maintenance decision needs.

The newly formed iPerform segment includes our performance measurement and information management solutions, including all the operations of BTS, which specializes in transportation performance measurement.  The BTS performance measurement system leverages its real-time data collection, diagnostic, fusion and warehousing platform to aggregate and compute performance measurements. During Fiscal 2012, we began the development of IterisPeMS.  IterisPeMS is a state-of-the-art, real-time data collection, diagnostic, fusion and warehousing software platform used to aggregate and compute performance measures across multiple transportation modes, including travel time, travel time variability, delay and lost throughput. This information can then be analyzed by traffic professionals to measure how a transportation network is performing and to identify potential areas of improvement. IterisPeMS is also capable of providing users with traffic analytics and easy-to-use visualization and animation features for both historical and predictive traffic conditions.  Costs incurred related to the development of IterisPeMS, which include research and development expense as well as sales and marketing expenditures, are included in the iPerform segment.

The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies (Note 1). Certain corporate expenses, including interest and amortization of intangible assets, are not allocated to the segments. The reportable segments are each managed separately because they manufacture and distribute distinct products or provide services with different processes. All reported segment revenues are derived from external customers.

The following table sets forth selected unaudited consolidated financial information for our reportable segments for the three and nine months ended December 31, 2012 and 2011 (in thousands):

	Roadway		Transportation
	Sensors		Systems		iPerform			Total
Three Months Ended December 31, 2012
Total revenues	$	5,081	$	7,972	$	941		$	13,994
Segment operating income	243		981		66			1,290
Three Months Ended December 31, 2011
Total revenues	$	6,598	$	7,994	$	289		$	14,881
Segment operating income (loss)	840		654		(52		)	1,442
Nine Months Ended December 31, 2012
Total revenues	$	19,485	$	23,786	$	2,531		$	45,802
Segment operating income (loss)	3,228		2,559		(69		)	5,718
Nine Months Ended December 31, 2011
Total revenues	$	21,234	$	21,643	$	289		$	43,166
Segment operating income (loss)	4,087		1,742		(52		)	5,777

The following table reconciles total segment income to unaudited consolidated income from continuing operations before income taxes:

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
	(In thousands)
Segment operating income:
Total income from reportable segments	$	1,290		$	1,442		$	5,718		$	5,777
Unallocated amounts:
Corporate and other expenses	(1,423		)	(1,217		)	(4,110		)	(4,416		)
Amortization of intangible assets	(161		)	(141		)	(483		)	(343		)
Change in fair value of contingent consideration	(133		)	281			188			639
Other income, net	1			3			9			4
Interest income (expense), net	12			(13		)	(2		)	(64		)
Income (loss) from continuing operations before income taxes	$	(414	)	$	355		$	1,320		$	1,597