SEGMENT INFORMATION:

9 Months Ended

Dec. 31, 2015

SEGMENT INFORMATION:

SEGMENT INFORMATION:

11.SEGMENT INFORMATION:

The Company reports segment information consistent with the way management internally disaggregates its operations to assess performance and to allocate resources.

During the first quarter of fiscal 2016, the Company realigned its organizational structure to better reflect its business strategy. On May 20, 2015, the Company entered into a definitive agreement to sell its ITO business to Charlesbank Capital Partners and M/C Partners to more sharply focus on growing our Marketing & Data Services businesses. The sale was completed on July 31, 2015.  As a result of this transaction and the organizational realignment, information that our chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance changed. Thus, beginning in fiscal year 2016, the Company began reporting its financial performance based on the following new segments: Marketing Services and Audience Solutions, and Connectivity, with plans to report Marketing Services and Audience Solutions as separate segments in the future. During the third quarter of fiscal 2016, the operational and financial activities to separate Marketing Services and Audience Solutions were completed and as a result are now reported as separate operating segments. Prior period amounts have been adjusted to conform to the way the Company internally managed and monitored segment performance during the current fiscal quarter.

Revenue and cost of revenue are generally directly attributed to the segments. Certain revenue contracts are allocated among the segments based on the relative value of the underlying products and services. Cost of revenue, excluding non-cash stock compensation expense and purchased intangible asset amortization, is directly charged in most cases and allocated in certain cases based upon proportional usage.

Operating expenses, excluding non-cash stock compensation expense and purchased intangible asset amortization, are attributed to the segment groups as follows:

· Research and development expenses are primarily directly recorded to each segment group based on identified products supported.

· Sales and marketing expenses are primarily directly recorded to each segment group based on products supported and sold.

· General and administrative expenses are generally not allocated to the segments unless directly attributable.

· Gains, losses and other items, net are not allocated to the segment groups.

We do not track our assets by operating segments. Consequently, it is not practical to show assets by operating segment.

The following table presents information by business segment (dollars in thousands).  The prior-year segment information has been restated to conform to the new segment presentation:

	For the quarter ended December 31						For the nine months ended December 31
	2015			2014			2015			2014
Revenues:
Marketing Services	$	115,725		$	114,403		$	336,430		$	336,441
Audience Solutions	77,046			75,933			217,718			227,020
Connectivity	28,422			17,910			71,285			35,716
Total operating segment revenues	$	221,193		$	208,246		$	625,433		$	599,177
Gross profit(1):
Marketing Services	$	38,561		$	41,572		$	112,139		$	120,275
Audience Solutions	45,265			39,215			121,258			116,245
Connectivity	16,130			5,858			41,582			5,088
Total operating segment gross profit	$	99,956		$	86,645		$	274,979		$	241,608
Income (loss) from operations(1):
Marketing Services	$	20,309		$	21,859		$	55,070		$	63,263
Audience Solutions	30,723			28,919			80,000			84,484
Connectivity	(1,015		)	(7,802		)	(2,874		)	(34,043		)
Total operating segment income from operations	$	50,017		$	42,976		$	132,196		$	113,704

(1) Gross profit and Income (loss) from operations reflect only the direct and allocable controllable costs of each segment and do not include allocations of corporate expenses (primarily general and administrative expenses) and gains, losses, and other items, net. Additionally, Gross profit and Income (loss) from operations do not reflect non-cash stock compensation expense and purchased intangible asset amortization (both of which were previously allocated to segments, principally Connectivity).

The following table reconciles total operating segment gross profit to gross profit and total operating segment income from operations to loss from operations:

	For the quarter ended December 31						For the nine months ended December 31
	2015			2014			2015			2014
Total operating segment gross profit	$	99,956		$	86,645		$	274,979		$	241,608
Less:
Purchased intangible asset amortization	3,754			3,783			11,262			7,673
Non-cash stock compensation	666			423			1,442			1,087
Corporate expenses	78			—			1,598			—
Gross profit	$	95,458		$	82,439		$	260,677		$	232,848
Total operating segment income from operations	$	50,017		$	42,976		$	132,196		$	113,704
Less:
Corporate expenses	34,533			29,652			94,606			96,408
Gains, losses and other items, net	4,058			3,381			8,098			11,342
Purchased intangible asset amortization	3,754			3,783			11,262			7,673
Non-cash stock compensation	8,046			8,450			23,529			20,100
Loss from operations	$	(374	)	$	(2,290	)	$	(5,299	)	$	(21,819	)