Segment Reporting and Geographic Information

9 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

23. Segment Reporting and Geographic Information

The Company operates its business along two operating segments, which are segregated on the basis of revenue stream: Server Based Gaming and Virtual Sports. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss) from continuing operations, total assets and total capital expenditures for the three and nine months ended June 30, 2017 and 2016, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions.

Segment Information

Three Months Ended June 30, 2017

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	17,834		$	9,004		$	-		$	26,838
Hardware		5,473			-			-			5,473
Total revenue		23,307			9,004			-			32,311
Cost of sales, excluding depreciation and amortization:
Cost of service		(3,119	)		(1,047	)		-			(4,166	)
Cost of hardware		(4,908	)		-			-			(4,908	)
Selling, general and administrative expenses		(3,912	)		(1,222	)		(8,652	)		(13,786	)
Stock-based compensation expense		(65	)		(79	)		(1,233	)		(1,377	)
Acquisition related transaction expenses		-			-			(74	)		(74	)
Depreciation and amortization		(6,622	)		(1,570	)		(513	)		(8,705	)
Segment operating income (loss) from continuing operations		4,681			5,086			(10,472	)		(705	)
Net operating loss											(705	)
Revenue from major customers:
Customer 1	$	7,929		$	264		$	-		$	8,193
Customer 2		3,044			78			-			3,122
Total revenue from major customers	$	10,973		$	342			-		$	11,315
Total assets at June 30, 2017	$	106,912		$	75,205		$	31,270		$	213,387
Total goodwill at June 30, 2017	$	-		$	45,656		$	-		$	45,656
Total capital expenditures for the three months ended June 30, 2017	$	7,558		$	2,016		$	415		$	9,989

Three Months Ended June 30, 2016

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	19,864		$	8,864		$	-		$	28,728
Hardware		680			-			-			680
Total revenue		20,544			8,864			-		$	29,408
Cost of sales, excluding depreciation and amortization:
Cost of service		(3,280	)		(1,122	)		-			(4,402	)
Cost of hardware		(335	)		-			-			(335	)
Selling, general and administrative expenses		(4,617	)		(2,181	)		(7,401	)		(14,199	)
Acquisition related transaction expenses		-			-			(690	)		(690	)
Depreciation and amortization		(7,187	)		(1,746	)		(198	)		(9,131	)
Segment operating income (loss) from continuing operations		5,125			3,815			(8,289	)		651
Net operating loss											651
Revenue from major customers:
Customer 1	$	8,531		$	124		$	-		$	8,655
Customer 2		3,146			64			-			3,210
Total revenue from major customers	$	11,677		$	188		$	-		$	11,865
Total assets at September 24, 2016	$	104,117		$	77,282		$	8,471		$	189,870
Total goodwill at September 24, 2016	$	-		$	45,705		$	-		$	45,705
Total capital expenditures for the three months ended June 30, 2016	$	4,427		$	1,868		$	830		$	7,125

Nine Months Ended June 30, 2017

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	52,988		$	24,490		$	-		$	77,478
Hardware		9,930			-			-			9,930
Total revenue		62,918			24,490			-			87,408
Cost of sales, excluding depreciation and amortization:
Cost of service		(8,610	)		(2,536	)		-			(11,146	)
Cost of hardware		(8,520	)		-			-			(8,520	)
Selling, general and administrative expenses		(11,562	)		(4,472	)		(25,888	)		(41,922	)
Stock-based compensation expense		(129	)		(157	)		(2,417	)		(2,703	)
Acquisition related transaction expenses		-			-			(11,346	)		(11,346	)
Depreciation and amortization		(18,215	)		(4,193	)		(1,469	)		(23,877	)
Segment operating income (loss) from continuing operations		15,882			13,132			(41,120	)		(12,106	)
Net operating loss											(12,106	)
Revenue from major customers:
Customer 1	$	23,157		$	771		$	-		$	23,928
Customer 2		9,317			412			-			9,729
Total revenue from major customers	$	32,474		$	1,183			-		$	33,657
Total capital expenditures for the nine months ended June 30, 2017	$	19,479		$	5,258		$	2,159		$	26,896

Nine Months Ended June 30, 2016

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	61,903		$	26,049		$	-		$	87,952
Hardware		2,712			-			-			2,712
Total revenue		64,615			26,049			-		$	90,664
Cost of sales, excluding depreciation and amortization:
Cost of service		(9,397	)		(3,497	)		-			(12,894	)
Cost of hardware		(1,176	)		-			-			(1,176	)
Selling, general and administrative expenses		(15,809	)		(4,787	)		(24,375	)		(44,971	)
Acquisition related transaction expenses		-			-			(2,357	)		(2,357	)
Depreciation and amortization		(21,676	)		(4,434	)		(1,465	)		(27,575	)
Segment operating income (loss) from continuing operations		16,557			13,331			(28,197	)		1,691
Net operating loss											1,691
Revenue from major customers:
Customer 1	$	26,452		$	553		$	-		$	27,005
Customer 2		10,129			83			-			10,212
Total revenue from major customers	$	36,581		$	636		$	-		$	37,217
Total capital expenditures for the nine months ended June 30, 2016	$	11,029		$	5,368		$	2,171		$	18,568

Geographic Information

Geographic information for revenue is set forth below:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2017		2016		2017		2016
Total revenue
UK	$	21,190	$	21,572	$	60,259	$	66,606
Italy		3,996		5,126		12,446		15,500
Greece		4,475		-		5,765		-
Rest of world		2,650		2,710		8,938		8,558
Total	$	32,311	$	29,408	$	87,408	$	90,664

Geographic information of our non-current assets excluding goodwill is set forth below:

	June 30, 2017		September 24, 2016
Total non-current assets excluding goodwill
UK	$	69,956	$	73,033
Italy		5,587		7,737
Greece		15,941		9,653
Rest of world		10,741		9,002
Total	$	102,225	$	99,425

Software development costs are included as attributable to the market in which they are utilized.