Segment Reporting and Geographic Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

9. Segment Reporting and Geographic Information

ASC 280, Segment Reporting (“ASC 280”) establishes standards for the reporting by public business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses and about which separate financial information is available to its chief operating decision makers (“CODM”). The Company’s CODM is its CEO.

The Company is organized into four reportable operating segments: Physical Access Control Systems (“PACS”), previously referred to as Premises, Identity, Credentials and All Other.

The CODM reviews financial information and business performance for each operating segment. The Company evaluates the performance of its operating segments at the revenue and gross profit levels. The CODM does not review operating expenses or asset information by operating segment for purposes of assessing performance or allocating resources.

Net revenue and gross profit information by segment for the three months ended March 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended March 31,
	2017			2016
PACS:
Net revenue	$	5,364		$	5,113
Gross profit		3,099			2,875
Gross profit margin		58	%		56	%
Identity:
Net revenue		3,089			2,506
Gross profit		1,124			951
Gross profit margin		36	%		38	%
Credentials:
Net revenue		4,935			4,436
Gross profit		1,470			1,214
Gross profit margin		30	%		27	%
All Other:
Net revenue		4			430
Gross profit		4			254
Gross profit margin		107	%		59	%
Total:
Net revenue		13,392			12,485
Gross profit		5,697			5,294
Gross profit margin		43	%		42	%
Operating expenses:
Research and development		1,477			2,085
Selling and marketing		3,379			4,216
General and administrative		1,787			4,577
Restructuring and severance		—			2,739
Total operating expenses:		6,643			13,617
Loss from operations		(946	)		(8,323	)
Non-operating income (expense):
Interest expense, net		(674	)		(770	)
Gain on extinguishment of debt		977			—
Foreign currency (losses) gains, net		(152	)		229
Loss before income taxes and noncontrolling interest	$	(795	)	$	(8,864	)

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three months ended March 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended
	March 31,
	2017			2016
Americas	$	8,777		$	8,221
Europe and the Middle East		2,223			2,068
Asia-Pacific		2,392			2,196
Total	$	13,392		$	12,485
Revenues:
Americas		66	%		66	%
Europe and the Middle East		17	%		17	%
Asia-Pacific		17	%		18	%
Total		100	%		100	%

Long-lived assets by geographic location as of March 31, 2017 and December 31, 2016 are as follows (in thousands):

	March 31,		December 31,
	2017		2016
Property and equipment, net:
Americas	$	1,055	$	1,100
Europe and the Middle East		136		162
Asia-Pacific		1,009		1,154
Total property and equipment, net	$	2,200	$	2,416