Annual report pursuant to Section 13 and 15(d)

Segment Information

v2.4.0.6
Segment Information
 12 Months Ended
Jan. 31, 2012
Segment Information

12. Segment Information

 

Operating segments are defined as components of an enterprise evaluated regularly by our senior management in deciding how to allocate resources and assess performance. Through the third quarter of fiscal 2012, we managed and operated as three segments, Software, Servers and Storage, and Media Services, Following the classification of a portion of the broadcast servers and storage business unit as an asset held for sale, the Software and VOD product line was organized in the one business reporting segment. We have two segments in which senior management decides how to allocate resources and assess performance. Reportable segments were determined based upon the nature of the products offered to customers, the market characteristics of each operating segment and the Company’s management structure.

 

• Software segment – This segment includes product revenues from our advertising, back-office including video streamers, and home gateway software solutions, related services such as professional services, installation, training, project management, product maintenance, technical support and software development for those software products.

 

• Media Services segment – This agreement includes the operations of the On Demand Group which include content acquisition and preparation services for television and wireless service providers.

 

Under this revised reporting structure, we further determined that there are significant functions, and therefore costs considered corporate expenses and are not allocated to the reportable segments for the purposes of assessing performance and making operating decisions. These unallocated costs include general and administrative expenses, other than general and administrative expenses related to Media Services, interest and other income, net, taxes and equity income (losses) in affiliates, which are managed separately at the corporate level. The segment data for the fiscal years ended January 31, 2012, 2011, and 2010 has been recast to reflect the realignment of the new segments.

 

The basis of the assumptions for all such revenues, costs and expenses includes significant judgments and estimations. There are no inter-segment revenues for the periods shown below. We do not separately track all assets by operating segments nor are the segments evaluated under this criterion.

  

The following summarizes the income from operations by reportable operating segment:

 

SeaChange International, Inc.

Condensed Consolidated Operating Segments - Unaudited

(in thousands)

 

    Year ended January 31,  
    2012     2011     2010  
Software   (in thousands)  
Revenue:                        
Products   $ 73,157     $ 82,155     $ 97,005  
Services     91,635       91,501       73,141  
Total revenue     164,792       173,656       170,146  
Gross profit     93,157       98,064       95,786  
Operating expenses:                        
Research and development     40,692       44,569       45,104  
Selling and marketing     21,619       21,055       22,425  
General and administrative     2,032       1,465       502  
Amortization of intangibles     3,784       3,073       2,246  
Acquisition costs     3,312       764       -  
Restructuring     2,366       6,085       -  
Total operating expenses     73,805       77,011       70,277  
Income from operations   $ 19,352     $ 21,053     $ 25,509  
                         
Media Services                        
Service revenue   $ 32,913     $ 28,031     $ 19,794  
Gross profit     4,855       4,791       3,284  
Operating expenses:                        
Selling and marketing             -       -  
General and administrative     3,421       4,026       3,015  
Amortization of intangibles     139       286       580  
Total operating expenses     3,560       4,312       3,595  
Income (loss) from operations   $ 1,295     $ 479     $ (311 )
                         
Unallocated Corporate                        
Operating expenses:                        
General and administrative   $ 18,663     $ 18,156     $ 17,306  
Restructuring     950     $ 912     $ -  
Total unallocated corporate expenses   $ 19,613     $ 19,068     $ 17,306  
                         
Consolidated income from operations   $ 1,034     $ 2,464     $ 7,892  

 

The following summarizes revenues by customers’ geographic locations.

 

    Year ended January 31,  
    2012     2011     2010  
    Amount     %     Amount     %     Amount     %  
Revenues by customers' geographic locations:   (in thousands, except percentages)  
North America   $ 107,277       54 %   $ 118,895       59 %   $ 130,642       69 %
Europe and Middle East     80,789       41 %     63,127       31 %     41,794       22 %
Latin America     5,578       3 %     10,477       5 %     12,776       7 %
Asia Pacific and other international locations     4,061       2 %     9,188       5 %     4,728       2 %
Total revenues   $ 197,705             $ 201,687             $ 189,940          

 

Total revenues for the United States for the years ended January 31, 2012, 2011, and 2010, were $97.3 million, $108.6.0 million, and $126.8 million, respectively.

 

The following summarizes fixed assets, net by geographic locations:

 

    Year ended January 31,  
    2012     2011  
    $ Amount     %     $ Amount     %  
Fixed assets, net by geographic locations:   (in thousands, except percentages)  
North America   $ 15,734       52 %   $ 20,233       59 %
United Kingdom     10,478       35 %     10,250       29 %
Europe (excluding UK) and Middle East     997       3 %     835       2 %
Asia Pacific and other international locations     3,357       10 %     3,540       10 %
Total fixed assts by geographic location   $ 30,566             $ 34,858