Segment and Geographic Information

6 Months Ended

Dec. 31, 2011

Segment and Geographic Information [Abstract]

Segment and Geographic Information

12.  Segment and Geographic Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer.

We have three operating segments: license, SMS and training, and professional services.  The chief operating decision maker assesses financial performance and allocates resources based upon the three lines of business.

The license line of business is engaged in the development and licensing of software. The SMS and training line of business provides customers with a wide range of support services that include on-site support, telephone support, software updates and various forms of training on how to use our products.  The professional services line of business offers implementation, advanced process control, real-time optimization and other professional services in order to provide its customers with complete solutions.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies (refer to Note 2). We do not track assets or capital expenditures by operating segments. Consequently, it is not practical to show assets, capital expenditures, depreciation or amortization by operating segments.

The following table presents a summary of operating segments (dollars in thousands):

			SMS,
			Training,		Professional
	License		and Other		Services			Total
Three Months Ended December 31, 2011
Segment revenue	$	46,502	$	14,401	$	5,652		$	66,555
Segment expenses		16,863		2,513		5,845			25,221
Segment operating profit (1)	$	29,639	$	11,888	$	(193	)	$	41,334
Three Months Ended December 31, 2010
Segment revenue	$	25,333	$	16,536	$	7,939		$	49,808
Segment expenses		14,798		3,346		6,140			24,284
Segment operating profit (1)	$	10,535	$	13,190	$	1,799		$	25,524
Six Months Ended December 31, 2011
Segment revenue	$	78,412	$	28,568	$	10,800		$	117,780
Segment expenses		33,415		5,206		12,243			50,864
Segment operating profit (1)	$	44,997	$	23,362	$	(1,443	)	$	66,916
Six Months Ended December 31, 2010
Segment revenue	$	44,300	$	34,006	$	14,602		$	92,908
Segment expenses		29,191		6,483		12,080			47,754
Segment operating profit (1)	$	15,109	$	27,523	$	2,522		$	45,154

(1) The Segment operating profits reported reflect only the direct expenses of the operating segment and do not contain an allocation for selling and marketing, general and administrative, research and development, restructuring and other corporate expenses incurred in support of the segments.

Reconciliation to Income (Loss) Before Income Taxes

The following table presents a reconciliation of total segment operating profit to income (loss) before income taxes for the three and six months ended December 31, 2011 and 2010 (in thousands):

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2011			2010			2011			2010
Total segment operating profit for reportable segments	$	41,334		$	25,524		$	66,916		$	45,154
Cost of license		(2,622	)		(1,972	)		(5,346	)		(4,094	)
Selling and marketing		(2,448	)		(2,294	)		(6,315	)		(5,518	)
Research and development		(10,573	)		(9,835	)		(22,145	)		(20,198	)
General and administrative and overhead		(15,565	)		(18,300	)		(34,974	)		(39,156	)
Stock-based compensation		(3,071	)		(2,345	)		(6,779	)		(5,042	)
Restructuring charges		(14	)		(78	)		59			(155	)
Other (expense) income, net		(425	)		(735	)		(2,457	)		1,929
Interest income (net)		1,019			1,881			2,158			4,340
Income (loss) before income taxes	$	7,635		$	(8,154	)	$	(8,883	)	$	(22,740	)