Segment Reporting and Related Disclosures

9 Months Ended

Feb. 28, 2013

Segment Reporting and Related Disclosures

Note 10: Segment Reporting and Related Disclosures

Accounting guidance establishes reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. In order to determine our operating segments, we considered the following: an operating segment is a component of an enterprise (i) that engages in business activities from which it may earn revenues and incur expenses, (ii) whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and (iii) for which discrete financial information is available. In accordance with this guidance, we have identified two operating segments: the rental, lease and sale of T&M equipment and the rental, lease and sale of DP equipment.

Although we have separate operating segments for T&M and DP equipment, these two segments are aggregated into a single reportable segment because they have similar economic characteristics and qualitative factors. The T&M and DP segments have similar long-term average gross margins, and both rent, lease and sell electronic equipment to large corporations, purchase directly from major manufacturers, configure and calibrate the equipment, and ship directly to customers. Additionally, DP segment revenues are less than 10% of total company revenues, and are not considered material.

Our equipment pool, based on acquisition cost, consisted of $420,274 of T&M equipment and $34,775 of DP equipment at February 28, 2013 and $409,686 of T&M equipment and $37,595 of DP equipment at May 31, 2012.

Revenues for these product groups were as follows for the three months ended February 28, 2013 and February 29, 2012:

	T&M		DP		Total
2013
Rentals and leases	$	29,460	$	3,377	$	32,837
Sales of equipment and other revenues		31,327		508		31,835
	$	60,787	$	3,885	$	64,672
2012
Rentals and leases	$	28,281	$	3,423	$	31,704
Sales of equipment and other revenues		27,882		493		28,375
	$	56,163	$	3,916	$	60,079

Revenues for these product groups were as follows for the nine months ended February 28, 2013 and February 29, 2012:

	T&M		DP		Total
2013
Rentals and leases	$	89,500	$	11,577	$	101,077
Sales of equipment and other revenues		85,418		1,870		87,288
	$	174,918	$	13,447	$	188,365
2012
Rentals and leases	$	83,534	$	12,391	$	95,925
Sales of equipment and other revenues		82,711		1,736		84,447
	$	166,245	$	14,127	$	180,372

No single customer accounted for more than 10% of total revenues during the three and nine months ended February 28, 2013 and February 29, 2012, respectively.

Selected country information is presented below:

	Three Months Ended				Nine Months Ended
	February 28,		February 29,		February 28,		February 29,
	2013		2012		2013		2012
Revenues: (1)
U.S.	$	56,069	$	51,986	$	161,611	$	155,563
Other (2)		8,603		8,093		26,754		24,809
Total	$	64,672	$	60,079	$	188,365	$	180,372

	As of
	February 28, 2013		May 31, 2012
Net Long-Lived Assets: (3)
U.S.	$	198,290	$	207,449
Other (2)		51,113		49,595
Total	$	249,403	$	257,044

(1) Revenues by country are based on the location of shipping destination, and not whether the order originates in the United States parent or a foreign subsidiary.

(2) Other consists of foreign countries. Each foreign country individually accounts for less than 10% of the total revenues and long-lived assets.

(3) Net long-lived assets include rental and lease equipment and other property, net of accumulated depreciation and amortization. Subsequent to the issuance of the May 31, 2012 consolidated financial statements, we determined that, for geographic disclosure purposes, the previously reported amount of net long-lived assets as of May 31, 2012 should not have included goodwill and intangibles (which totaled $4,310 at that date) and, accordingly, such amount has been excluded from the May 31, 2012 balance displayed in the table above.