Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

Note 18 — Segment Reporting

Geographic Information and Concentrations of Credit Risk

The Company’s geographic area of operation is predominantly the United States.  Export or foreign sales to locations outside the United States was approximately 8% of total sales for the years ended December 31, 2015 and 2014, with approximately 5% of total sales in Canada in each year.  No single customer accounted for more than 10% of consolidated net revenues for any years presented. No single customer accounted for more than 10% of the accounts receivable balance at December 31, 2015.  One single customer accounted for approximately 15% of the accounts receivable balance at December 31, 2014.  Although the loss of a single customer or a few customers would not have a material adverse effect on the Company’s business, schedules of school adoptions, available funding for school districts, and market acceptance of the Company’s products can materially affect year-to-year revenue performance.

Segment Results of Operation

The Company operates in three reportable segments with separate management teams and infrastructures that offer various products and services.

Reclassifications

Certain prior period reclassifications have been made to conform to the current period presentation.

Segment Aggregation

Prior to the first quarter of 2015, the Voyager Sopris Learning and Kurzweil Education operating segments were separately reported in the financial statements.  As permitted by GAAP, the Company elected to aggregate these two operating segments into a single reportable segment titled Voyager Sopris Learning.  The separate Voyager Sopris Learning and Kurzweil Education operating segments have similar economic characteristics as well as similar products and services, production processes, class of customers, and product and service distribution methods.  In addition, the Company believes the aggregated presentation is more useful to investors and other financial statement users because both units are in the midst of transitioning to higher concentrations of technology-enabled solutions and because of the relatively small financial contribution of Kurzweil Education to the consolidated results.

Reclassification of Certain Operating Expenses and General Capital Expenditures

Certain operating expenses, such as rent, personnel and consulting fees, previously pooled and reported in Other in the segment information have been reclassified to the applicable reportable segment to which the expense directly supported.  Additionally, General Capital Expenditures, also previously reported in Other in the segment information, have been reclassified to the applicable reportable segment to which the expenditure related.  These reclassifications were made in order to provide a more complete depiction of the reportable segments as stand-alone operations.  Segment disclosures for the year ended December 31, 2014 were conformed to the 2015 presentation.

The following table reports the effect of these reclassifications on prior period disclosures:

	Three Months Ended
(in thousands)	March 31,			June 30,			September 30,			December 31,			Fiscal 2014
Operating expense
Learning A-Z	$	33		$	36		$	37		$	36		$	142
Voyager Sopris Learning		173			170			170			214			727
ExploreLearning		—			—			—			—			—
Other		(206	)		(206	)		(207	)		(250	)		(869	)
Operating expense	$	—		$	—		$	—		$	—		$	—

	Three Months Ended
(in thousands)	March 31,			June 30,			September 30,			December 31,			Fiscal 2014
Capital expenditures - general expenditures
Learning A-Z	$	221		$	406		$	304		$	274		$	1,205
Voyager Sopris Learning		119			89			55			42			305
ExploreLearning		192			66			13			44			315
Other		(532	)		(561	)		(372	)		(360	)		(1,825	)
Capital expenditures - general expenditures	$	—		$	—		$	—		$	—		$	—

The Company and its chief operating decision maker use net revenues, operating expenses, income (loss) from operations and capital expenditures as measures of the reportable segment’s operating performance.  The Company does not track assets by segment and the chief operating decision maker does not use assets as a measure of the reportable segments’ operating performance, therefore this information is not reported.  The significant accounting policies of the reportable segments are the same as those for the Company.  There were no intersegment revenues or transfers.

In the quarter ended June 30, 2014, the Company completed the sale of the IntelliTools product line for $0.8 million.  Net revenues associated with the IntelliTools product line were $0.3 million during 2014 through the date of sale.   

The reportable segments’ results of operations for the years ended December 31, 2015 and 2014 are presented in the tables below.

	Year Ended December 31, 2015
(in thousands)	Learning A-Z		Voyager Sopris Learning		ExploreLearning		Other			Consolidated
Product revenues	$	55,167	$	62,846	$	20,162	$	—		$	138,175
Service revenues		—		6,745		—		—			6,745
Total net revenues		55,167		69,591		20,162		—			144,920
Cost of product revenues		1,950		22,161		3,068		—			27,179
Cost of service revenues		—		4,151		—		—			4,151
Amortization expense		—		—		—		17,370			17,370
Total cost of revenues		1,950		26,312		3,068		17,370			48,700
Other operating expenses		24,785		27,384		9,992		14,005			76,166
Depreciation and amortization expense		—		—		—		3,868			3,868
Total costs and expenses		26,735		53,696		13,060		35,243			128,734
Income (loss) before interest, other    income (expense) and income taxes		28,432		15,895		7,102		(35,243	)		16,186
Net interest expense		—		—		—		(13,981	)		(13,981	)
Loss on extinguishment of debt		—		—		—		(4,016	)		(4,016	)
Other income, net		—		—		—		679			679
Income tax expense		—		—		—		(193	)		(193	)
Segment net income (loss)	$	28,432	$	15,895	$	7,102	$	(52,754	)	$	(1,325	)
Expenditures for property, equipment,    software and pre-publication costs	$	8,070	$	8,812	$	2,592	$	463		$	19,937

	Year Ended December 31, 2014
(in thousands)	Learning A-Z		Voyager Sopris Learning		ExploreLearning		Other			Consolidated
Product revenues	$	44,385	$	70,819	$	18,138	$	—		$	133,342
Service revenues		—		8,405		—		—			8,405
Total net revenues		44,385		79,224		18,138		—			141,747
Cost of product revenues		1,586		27,631		2,867		—			32,084
Cost of service revenues		—		5,790		—		—			5,790
Amortization expense		—		—		—		18,270			18,270
Total cost of revenues		1,586		33,421		2,867		18,270			56,144
Other operating expenses		19,202		30,147		10,213		13,786			73,348
Depreciation and amortization expense		—		—		—		4,209			4,209
Total costs and expenses		20,788		63,568		13,080		36,265			133,701
Income (loss) before interest, other    income (expense) and income taxes		23,597		15,656		5,058		(36,265	)		8,046
Net interest expense		—		—		—		(17,659	)		(17,659	)
Loss on extinguishment of debt		—		—		—		(922	)		(922	)
Other income, net		—		—		—		1,180			1,180
Income tax expense		—		—		—		(600	)		(600	)
Segment net income (loss)	$	23,597	$	15,656	$	5,058	$	(54,266	)	$	(9,955	)
Expenditures for property, equipment,    software and pre-publication costs	$	6,831	$	8,249	$	1,917	$	878		$	17,875