Business Segments

6 Months Ended

Sep. 30, 2011

Business Segments [Abstract]

Business Segments

12. Business Segments

Description of Business Segments

The Company has two reportable business segments: HSG and RSG. The reportable segments are each managed separately and are supported by various practices as well as Company-wide functional departments. These functional support departments include general accounting, tax, and information technology. Certain costs associated with the functional support departments are contained within Corporate/Other and are not allocated back to the reportable business segments. Corporate/Other is not a reportable business segment as defined by GAAP. As a result of the sale of the Company's TSG business, which is disclosed in Note 3, Corporate/Other costs have been restated for all prior periods presented to reflect the portion of the functional support department costs that were transferred to OnX.

HSG is a leading technology provider of software, hardware and services to the hospitality industry, offering industry leading enterprise solutions for property management, point of sale, inventory and procurement, document management, and mobility-enabled guest engagement. HSG solutions allow customers in the gaming, hotel and resort, cruise line, foodservice management, higher education, and sports and entertainment markets to enhance guest services, increase revenue opportunities, and reduce operational expenses.

RSG is a leader in designing solutions that help make retailers more productive and provide their customers with an enhanced shopping experience. RSG solutions help improve operational efficiency, technology utilization, customer satisfaction, and in-store profitability, including mobility and wireless, customized pricing, inventory, and customer relationship management systems. The group also provides implementation plans and supplies the complete package of hardware needed to operate the systems, including servers, receipt printers, point-of-sale terminals, and wireless devices for in-store use by the retailer's store associates.

Measurement of Segment Operating Results and Segment Assets

The Company's President and Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), evaluates performance and allocates resources to its reportable segments based on operating income. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies elsewhere in these Notes to Condensed Consolidated Financial Statements. Intersegment sales are recorded at pre-determined amounts to allow for inter-company profit to be included in the operating results of the individual reportable segments. Such inter-company profit is eliminated for consolidated financial reporting purposes.

The CODM does not evaluate a measurement of segment assets when evaluating the performance of the Company's reportable segments. As such, financial information relating to segment assets is not provided in the table below.

The following table presents segment profit and related information for each of the Company's reportable segments and Corporate/Other. Please refer to Note 5 to Condensed Consolidated Financial Statements for further information on the fiscal 2012 and fiscal 2011 restructuring charges.

	Reportable segments						Corporate/
	HSG			RSG			Other			Consolidated
Three months ended September 30, 2011
Total revenue	$	22,631		$	31,173		$	—		$	53,804
Elimination of intersegment revenue		—			(216	)		—			(216	)
Revenue from external customers	$	22,631		$	30,957		$	—		$	53,588
Gross margin	$	14,523		$	7,093		$	—		$	21,616
Gross margin percentage		64.2	%		22.9	%					40.3	%
Operating income (loss)	$	1,401		$	2,168		$	(8,783	)	$	(5,214	)
Other expenses, net		—			—			(308	)		(308	)
Interest expense, net		—			—			(522	)		(522	)
Income (loss) from continuing operations before income taxes	$	1,401		$	2,168		$	(9,613	)	$	(6,044	)
Other information:
Capital expenditures	$	708		$	—		$	—		$	708
Non-cash charges:
Depreciation and amortization (1)	$	1,118		$	155		$	2,556		$	3,829
Restructuring charges		619			231			1,520			2,370
Total	$	1,737		$	386		$	4,076		$	6,199
Three months ended September 30, 2010
Total revenue	$	20,633		$	28,861		$	—		$	49,494
Elimination of intersegment revenue		(63	)		(105	)		—			(168	)
Revenue from external customers	$	20,570		$	28,756		$	—		$	49,326
Gross margin	$	12,215		$	5,547		$	—		$	17,762
Gross margin percentage		59.4	%		19.3	%					36.0	%
Operating income (loss)	$	214		$	1,079		$	(7,947	)	$	(6,654	)
Other income, net		—			—			856			856
Interest expense, net		—			—			(261	)		(261	)
Income (loss) from continuing operations before income taxes	$	214		$	1,079		$	(7,352	)	$	(6,059	)
Other information:
Capital expenditures	$	391		$	104		$	1,357		$	1,852
Non-cash charges:
Depreciation and amortization (1)	$	1,071		$	81		$	1,397		$	2,549
Asset impairment charges		59			—			—			59
Restructuring charges		—			—			10			10
Total	$	1,130		$	81		$	1,407		$	2,618

(1) Does not include the amortization of deferred financing fees totaling $437,000 and $131,000 for the three months ended September 30, 2011 and 2010, respectively, which related to Corporate/Other.

	Reportable segments						Corporate/
	HSG			RSG			Other			Consolidated
Six months ended September 30, 2011
Total revenue	$	43,591		$	64,278		$	—		$	107,869
Elimination of intersegment revenue		—			(395	)		—			(395	)
Revenue from external customers	$	43,591		$	63,883		$	—		$	107,474
Gross margin	$	27,790		$	13,353		$	—		$	41,143
Gross margin percentage		63.8	%		20.9	%					38.3	%
Operating income (loss)	$	1,916		$	4,263		$	(18,315	)	$	(12,136	)
Other expenses, net		—			—			(271	)		(271	)
Interest expense, net		—			—			(828	)		(828	)
Income (loss) from continuing operations before income taxes	$	1,916		$	4,263		$	(19,414	)	$	(13,235	)
Other information:
Capital expenditures	$	1,457		$	7		$	—		$	1,464
Non-cash charges:
Depreciation and amortization (2)	$	2,176		$	306		$	3,758		$	6,240
Restructuring charges		806			365			3,545			4,716
Total	$	2,982		$	671		$	7,303		$	10,956
Six months ended September 30, 2010
Total revenue	$	43,682		$	52,674		$	—		$	96,356
Elimination of intersegment revenue		(63	)		(180	)		—			(243	)
Revenue from external customers	$	43,619		$	52,494		$	—		$	96,113
Gross margin	$	25,503		$	11,217		$	—		$	36,720
Gross margin percentage		58.5	%		21.4	%					38.2	%
Operating income (loss)	$	2,454		$	2,847		$	(16,493	)	$	(11,192	)
Other income, net		—			—			1,959			1,959
Interest expense, net		—			—			(523	)		(523	)
Income (loss) from continuing operations before income taxes	$	2,454		$	2,847		$	(15,057	)	$	(9,756	)
Other information:
Capital expenditures	$	1,356		$	104		$	2,083		$	3,543
Non-cash charges:
Depreciation and amortization (2)	$	2,162		$	161		$	2,882		$	5,205
Asset impairment charges		59			—			—			59
Restructuring charges		—			—			403			403
Total	$	2,221		$	161		$	3,285		$	5,667

(2) Does not include the amortization of deferred financing fees totaling $568,000 and $262,000 for the six months ended September 30, 2011 and 2010, respectively, which related to Corporate/Other.

Enterprise-Wide Disclosures

The Company's assets are primarily located in the United States. Further, revenues attributable to customers outside the United States accounted for approximately 7% and 5% of total revenues for the three- and six-month periods ended September 30, 2011, respectively. Revenues attributable to customers outside the United States accounted for approximately 7% and 8% of total revenues for the three- and six-month periods ended September 30, 2010, respectively. Total revenues for the Company's three specific product areas are as follows:

	Three months ended September 30				Six months ended September 30
	2011		2010		2011		2010
Hardware	$	22,846	$	21,218	$	47,702	$	40,505
Software		4,248		3,446		8,177		7,651
Services		26,494		24,662		51,595		47,957
Total	$	53,588	$	49,326	$	107,474	$	96,113