Business Segment Information

6 Months Ended

Sep. 30, 2017

Business Segment Information

Business Segment Information

9.             Business Segment Information

We currently operate in three reportable segments: Roadway Sensors, Transportation Systems, and Agriculture and Weather Analytics.

The Roadway Sensors segment provides hardware and software products to multiple segments of the ITS market that use advanced image processing technology and other techniques to capture and analyze sensor data through sophisticated algorithms, enabling vehicle, bicycle, and pedestrian detection and transmission of both video images and data using various communication technologies. These products primarily consist of various vehicle detection and information systems and products for traffic intersection control, communication, incident detection, and roadway traffic data collection applications. These include, among other products, our Vantage, VantageNext, VersiCam, Vantage Vector, SmartCycle, PedTrax, SmartSpan, Pegasus, Velocity, and P-series products. In May 2017, we announced the release of VantageLive!, a cloud-based intersection data analytics service that allows users to view intersection activity by collecting and analyzing vehicle, bicycle and pedestrian data through our Vantage platform in order to maximize traffic signal efficiency and improve intersection safety conditions. Our Roadway Sensors segment also includes the sale of certain complementary original equipment manufacturer (“OEM”) products for the traffic intersection market, which include, among other things, intersection controllers and component cabinets.

The Transportation Systems segment provides transportation engineering and consulting services related to the planning, design, implementation, operation and management of surface transportation infrastructure systems, and the development of transportation management and traveler information systems for the ITS industry. This segment also includes our performance measurement and information management solution, known as “iPeMS”, and related traffic analytic consulting services, as well as our commercial vehicle goods movement compliance and inspection platform, known as “CVIEW-Plus”. Both iPeMS and CVIEW-Plus are considered software-as-a-service solutions.

The Agriculture and Weather Analytics segment includes ClearPath Weather, our road-maintenance applications, and ClearAg, our digital analytics solutions. ClearPath Weather provides winter road maintenance recommendations for state agencies, municipalities and for commercial companies. Our ClearAg solutions leverage our EMPower platform, which is an adaptive learning engine that provides a comprehensive database of weather, soil and agronomic information combined with proprietary land-surface modeling, essential to making informed agricultural decisions and solving complex agricultural problems. Our ClearAg solutions include our ClearAg applications, ClearAg application program interfaces (“APIs”) and components, WeatherPlot mobile application, and ClearAg Insights applications.  In July 2017, we launched our ClearAg irrigation APIs, including the EvapoSmart and IMFocus APIs, to enable users to optimize irrigation scheduling, water conservation and plant uptake while reducing watering costs.

The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies (Note 1). Certain corporate general and administrative expenses, including general overhead functions such as information systems, accounting, human resources, marketing, compliance costs and certain administrative expenses, as well as 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. Our Chief Executive Officer, who is our chief operating decision maker (“CODM”), reviews financial information at the operating segment level. Our CODM does not review assets by segment in his resource allocation, and therefore assets by segment are not disclosed below.

The following table sets forth selected unaudited consolidated financial information for our reportable segments for the three and six months ended September 30, 2017 and 2016:

	Roadway Sensors		Transportation Systems		Agriculture and Weather Analytics			Total
	(In thousands)
Three Months Ended September 30, 2017
Product revenues	$	11,150	$	552	$	—		$	11,702
Service revenues	111		12,542		893			13,546
Total revenues	$	11,261	$	13,094	$	893		$	25,248
Segment income (loss)	2,790		1,933		(2,236		)	2,487
Three Months Ended September 30, 2016
Product revenues	$	10,833	$	253	$	—		$	11,086
Service revenues	62		12,074		838			12,974
Total revenues	$	10,895	$	12,327	$	838		$	24,060
Segment income (loss)	2,647		2,549		(2,077		)	3,119
Six Months Ended September 30, 2017
Product revenues	$	22,430	$	1,195	$	—		$	23,625
Service revenues	111		26,626		2,069			28,806
Total revenues	$	22,541	$	27,821	$	2,069		$	52,431
Segment income (loss)	5,337		4,265		(4,068		)	5,534
Six Months Ended September 30, 2016
Product revenues	$	21,437	$	656	$	—		$	22,093
Service revenues	62		24,070		1,761			25,893
Total revenues	$	21,499	$	24,726	$	1,761		$	47,986
Segment income (loss)	4,956		4,894		(3,690		)	6,160

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

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
	(In thousands)
Segment income (loss):
Total income from reportable segments	$	2,487		$	3,119		$	5,534		$	6,160
Unallocated amounts:
Corporate and other expenses	(3,553		)	(3,220		)	(7,119		)	(6,267		)
Amortization of intangible assets	(33		)	(84		)	(66		)	(169		)
Other expense, net	2			(2		)	(5		)	(6		)
Interest income, net	3			4			5			5
Loss from continuing operations before income taxes	$	(1,094	)	$	(183	)	$	(1,651	)	$	(277	)