SEGMENT INFORMATION

12 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

11. SEGMENT INFORMATION

In its operation of the business, management reviews certain financial information, including segmented internal profit and loss statements prepared on a basis consistent with U.S. generally accepted accounting principles. Our two segments are Point.360 and Movie>Q. The two segments discussed in this analysis are presented in the way we internally managed and monitored performance for 2012, 2013 and 2014. Allocations for internal resources were made for the fiscal years ended June 30, 2012, 2013, and 2014. The Movie>Q segment tracks certain assets separately, and all others are recorded in the Point.360 segment for internal reporting presentations. Cash was not segregated between the two segments but retained in the Point.360 segment.

The types of services provided by each segment are summarized below:

Point.360 – The Point.360 segment provides high definition and standard definition digital mastering, data conversion, video and film asset management, distribution and other services to owners, producers and distributors of entertainment and advertising content. Point.360 provides the services necessary to edit, master, reformat, convert, archive and ultimately distribute its clients’ film and video content, including television programming feature films and movie trailers. The segment’s interconnected facilities provide service coverage to all major U.S. media centers. Clients include major motion picture studios and independent producers.

Movie>Q – The Movie>Q segment rents and sells DVDs directly to consumers though its retail stores. The stores employ an automated inventory management (“AIM”) system in a 1,200-1,600 square foot facility. By saving space and personnel costs which caused the big box stores to be uncompetitive with lower priced online and vending machine rental alternatives, Movie>Q can offer up to 10,000 unit selections to a customer at competitive rental rates. Movie>Q provides online reservations, an in-store destination experience, first run movie and game titles and a large unit selection.

Segment revenues, operating loss and total assets were as follows (in thousands):

Revenue	Year  Ended  June 30,
	2012		2013		2014
Point.360	$	34,408	$	30,456	$	25,281
Movie>Q		552		481		452
Consolidated revenue	$	34,960	$	30,937	$	25,733

Operating income (loss)(1)	Year  Ended  June 30,
	2012		2013		2014
Point.360	$	1,574	$	(635)	$	(2,296)
Movie>Q		(752)		(829)		(654)
Operating income (loss)	$	822	$	(1,464)	$	(2,950)

Total Assets	As of  June 30,
	2012		2013		2014
Point.360	$	24,536	$	22,588	$	16,204
Movie>Q		1,435		1,064		845
Consolidated assets	$	25,971	$	23,652	$	17,049

⁽¹⁾ Includes R&D expenses related to the Movie>Q project