Segment Reporting and Geographic Information

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting and Geographic Information

MRV operates its business in two segments: the Network Equipment group and the Network Integration group. The Network Equipment group designs, manufactures and distributes optical networking solutions and Internet infrastructure products, and the Network Integration group provides value-added integration and support services for customers' networks.

The accounting policies of the segments are the same as those described in the summary of significant accounting polices disclosed in MRV's2011Form 10-K. MRV evaluates segment performance based on revenues, gross profit and operating income of each segment. As such, there are no separately identifiable Statements of Operations data below operating income.

The following table summarizes revenues by segment, including intersegment revenues (in thousands):

	Three months ended March 31,
	2012			2011
Network Equipment group	$	20,419		$	22,516
Network Integration group	30,470			35,354
Before intersegment adjustments	50,889			57,870
Intersegment adjustments	(2,518		)	(4,699		)
Total	$	48,371		$	53,171

Network Equipment revenue primarily consists of Metro Ethernet equipment, optical transport equipment, out-of-band network equipment, the related service revenue and fiber optic components sold as part of system solutions. Network Integration revenue primarily consists of value-added integration and support service revenue, related third-party product sales (including third-party product sales through distribution) and fiber optic components sold as part of system solutions.

One customer accounted for $9.9 million and $11.3 million of revenue in the Network Integration group, or

20% and 21% of total revenue, for the three months ended March 31, 2012, and 2011, respectively.

The same customer in the Network Integration group accounted for 13% and 8% of accounts receivable as of March 31, 2012, and December 31, 2011, respectively. Another customer accounted for 15% and 16% of accounts receivable as of March 31, 2012, and December 31, 2011, respectively.

The following table summarizes external revenue by geographic region (in thousands):

	Three months ended
	March 31,
	2012		2011
Americas	$	12,849	$	11,513
Europe	34,405		39,492
Asia Pacific	938		2,161
Other regions	179		5
Total	$	48,371	$	53,171

The following table summarizes long-lived assets, consisting of property and equipment, by geographic region (in thousands):

	March 31, 2012		December 31, 2011
Americas	$	2,064	$	2,150
Europe	4,837		4,587
Asia Pacific	52		52
Total	$	6,953	$	6,789

The following table provides selected Statement of Operations information by business segment (in thousands):

	Three months ended
	March 31,
	2012			2011
Gross profit
Network Equipment group	$	10,044		$	11,590
Network Integration group	6,969			8,531
Before intersegment adjustments	17,013			20,121
Corporate unallocated and intersegment adjustments(1)	146			(441		)
Total	$	17,159		$	19,680
Depreciation expense
Network Equipment group	$	229		$	214
Network Integration group	157			124
Corporate	47			27
Total	$	433		$	365
Operating income (loss)
Network Equipment group	$	(1,430	)	$	550
Network Integration group	1,090			2,838
Before intersegment adjustments	(340		)	3,388
Corporate unallocated operating loss and adjustments (1)	(3,286		)	(3,648		)
Total	$	(3,626	)	$	(260	)

(1) Adjustments reflect the elimination of intersegment revenue and profit in inventory.

The following tables provide selected Balance Sheet and Statement of Cash Flow information by business segment (in thousands):

	Three months ended
	March 31,
	2012		2011
Additions to Fixed Assets
Network Equipment group	$	164	$	207
Network Integration group	388		100
Corporate	32		195
Discontinued operations	851		237
Total	$	1,435	$	739

	March 31, 2012		December 31, 2011
Total Assets
Network Equipment group	$	42,074	$	45,512
Network Integration group	89,789		93,557
Corporate and intersegment eliminations	79,525		50,927
Discontinued operations	—		40,693
Total	$	211,388	$	230,689

	March 31, 2012		December 31, 2011
Goodwill
Network Integration group	5,340		5,156
Total	$	5,340	$	5,156